Europeans are accepting greater risk in search of higher returns

The risk appetite among investors in European households is increasing as they seek higher returns, according to research by Robocash.

The Croatia-based investment platform surveyed data from 27 European countries and found that the assets held by households totalled €34.5trn (£29.5trn) at the end of the first half of 2024, up 5.7 per cent from a year earlier.

Households in Europe were also showing a tendency toward more risky assets. The average value of investments per typical household in the study is approaching the €200,000.

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“The share of pension savings and insurance products is declining, while the share of equities and investment fund units is growing,” the Robocash analysts said. “The average European investor is already willing to take more risk for an additional premium due to record inflation of more than 8-10 per cent in H2 2022 – H1 2023.”

The average value of investments from European households amounted to €187,000, up 5.1 per cent year-over-year.

The largest portion of the investor’s portfolio was occupied by investments in shares and investment funds, at 35.6 per cent.

They were followed by currency and bank deposits (30.8 per cent), as well as insurance products and pension savings (27.3 per cent). With other types of investments accounting for 3.7 per cent and bonds for only 2.6 per cent.

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When it comes to regional characteristics, the most conservative investors were from Ireland, the Netherlands and Croatia, where most funds were within the banking system for the second quarter 2024.

Investors from Hungary, Greece, Estonia, Slovakia and Germany were found to be willing to take more risks. They moved money from familiar instruments into stocks and shares of investment funds.

“Investors are gradually withdrawing money from the conservative products of Europe’s banking system and taking on increased risks due to the post-pandemic 2021-2023 inflation shock. This trend has a positive impact on the demand for investment instruments such as equities, cryptocurrency, P2P lending, venture capital investing,” Robocash added.

Robo.cash operates a peer-to-portfolio investment model. As of November 1, 2024, it has attracted €90m of investments and funded more than €1bn worth of loans.

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