- Proportion of retail investors holding stocks in their portfolio saw a significant jump in Q3 vs Q2
- Those invested in locally listed firms grew 10% whilst ownership of foreign stocks is up 16%
- Millennials lead the equities charge, with this group seeing biggest QoQ surge in stock ownership
Wednesday 25th September 2024 – The proportion of global retail investors holding equities increased significantly in the last three months, while those holding cash assets fell, according to data from the latest quarterly Retail Investor Beat, from trading and investing platform eToro.
In the study of 10,000 retail investors across 12 countries, those holding stocks listed in their local market grew by more than 10%, from 49% to 54%, while the increase in retail investors holding internationally-listed firms was even more significant, jumping 16%, from 31% to 36%. Meanwhile, those holding cash assets fell from 69% to 67%.
In the research, retail investors are defined as self-directed investors who hold any traditional investment (such as shares, bonds, funds or commodities) or financial derivatives. The jump in equity allocation amongst this group follows the Federal Reserve cutting interest rates for the first time in four years last week, signalling an end to the most generous savings rates.
Table shows changes in asset class allocation amongst global retail investors in Q3
| Asset class | % of global retail investors who held in Q2 | % of global retail investors who hold now |
| Internationally listed stocks | 31% | 36% |
| Locally listed stocks | 49% | 54% |
| Commodities | 26% | 29% |
| Domestic bonds | 34% | 36% |
| Foreign bonds | 20% | 22% |
| Crypto | 32% | 34% |
| Cash assets | 69% | 67% |
| FX | 26% | 25% |
Commenting on the data, eToro Analyst Sam North, says: “With the Fed finally pulling the trigger on interest rate cuts last week, we are seeing the beginning of the end for bumper savings rates. This will inevitably lead to more people looking to the stock market to achieve a better return on their cash and we’re already beginning to see this. A lower interest rate environment is also good for listed businesses, meaning we can expect earnings to remain resilient or even grow, which further supports equity markets. As a result, investors are likely to continue reallocating funds from cash to equities in search of higher returns.”
‘Cash-rich, risk-seeking’ millennial investors lead equities charge
Whilst investors from virtually every generational group are more likely to be holding equities than they were three months ago, the trend is most pronounced amongst millennial investors (those aged 29 to 43). Millennials holding stocks listed in their local market jumped 16% quarter-on-quarter (from 45% to 52%), while those invested in foreign-listed companies jumped 24% (from 34% to 42%).
The trend was far less pronounced amongst the youngest cohort of investors, Generation Z, where in the last three months, the proportion holding local and international stocks increased 5% and 7% respectively. Perhaps unsurprisingly, following a nearly two-year bull market, the oldest cohort, the so-called silent generation born between 1928 and 1945, reduced exposure to stocks.
Table shows changes in equity and cash allocation amongst the different generations of retail investors in Q3 vs Q2
| Age group | % QoQ change in those holding local stocks | % QoQ change in those holding international stocks | % QoQ change in those holding cash |
| Generation Z | 5% | 7% | -3% |
| Millennials | 16% | 24% | -3% |
| Generation X | 10% | 13% | -3% |
| Baby Boomer | 13% | 17% | -1% |
| Silent Generation | -11% | -16% | -1% |
*Rounded to nearest whole percentage difference
North adds: “With their long investment time horizons, millennials are leading the charge into equities. This generation has the luxury of time on their side, allowing them to ride out market ups and downs in pursuit of long-term growth, whilst they’re also more likely than their younger Gen Z counterparts to have the cash available to invest. Gen Z is already fairly well invested, whilst the oldest cohort of investors is sensibly scaling back to safeguard their wealth.”
The latest RIB data also showed that investors are looking for more sector diversification as interest rates begin to fall, with almost every single sector seeing an increase in terms of investor allocation. Whilst tech continued to be in focus, with a four percentage point increase in investors allocated to it (now 44%), healthcare (33%) and energy (38%) also saw significant three percentage point jumps.
ENDS
Notes to editors
About this report
The latest Retail Investor Beat was based on a survey of 10,000 retail investors across 12 countries and 3 continents. The following countries had 1,000 respondents: UK, US, Germany, France, Australia, Italy and Spain. The following countries had 600 respondents: Netherlands, Denmark, Poland, Romania, and the Czech Republic.
The survey was conducted from 16 August – 2 September 2024 and carried out by research company Opinium. Retail investors were defined as self-directed or advised and had to hold at least one investment product including shares, bonds, funds, investment ISAs or equivalent. They did not need to be eToro users.
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