French financial market authority AMF has launched its first annual survey on savings and investment from a retail investor perspective.
The outcomes of the survey, conducted towards 1,200 French people before this week’s market correction, highlight still strong risk aversion across the French population.
Hence, 52% of the people questioned are not willing to take any risks on investments despite the current low yield environment and 64% declare that they have little or no confidence in stock markets.
Other figures show that 38% of French retail investors surveyed have no interest at all in equity investments and 26% do not really demonstrate an interest. Another 21% have a little interest in equities while 7% answered they are much interested in stock investments.
This would sound quite bad news to the French government at a time it considers options to stimulate the transfer of local retail investors’ assets from traditional low-risk or risk-free savings products such as Livret A into equity products funding French companies, in particular micro, small and mid-cap firms.
But, if low-risk and risk-free investments are favoured by French investors, almost half of those interviewed (44%) consider equities remain the most advantageous investment over the long-term and 56% believe investment diversification is a good idea.
Moreover, a third of the retail investors surveyed would agree to take a certain level of risk if this means higher returns.
In parallel to its study, the AMF released figures around performances of Livret A, French sovereign bonds and CAC40 French equities between December 1987 and July 2017.
Annual net average returns on a more than 10-year investment in CAC40 equities were 2.7% against 1.3% for the Livret A and 3.3% for French govies.
The regulator also pointed out that a 10-year investment in a balanced portfolio (50% equities/50% bonds) returned an average return of 23% more than the Livret A.
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