France’s financial regulator, Autorité des Marchés Financiers, has published a study by the Organisation for Economic Co-operation and Development (OECD) on investment choices and growth levels in the country.
In the survey released on Nov 13, digital assets ranked second in terms of popularity across the country with 9.4% of adults owning cryptocurrencies while 2.8% of participants owned non-fungible tokens (NFTs).
According to the survey, 24% of adults living in France are financial investors who hold multiple instruments with over 12% representing new investors who came into the field in post 2020.
Real estate topped the most desired investment product in the country as 10.7% of the population holds such assets. While crypto products come in second, listed individual shares, unlisted shares, bonds, and investment funds come next with 7.3%, 5.6%, 5.4%, and 4.5% respectively.
New investors showed higher demand for digital assets although they were more prone to investment mistakes than traditional investors. Men accounted for 64% of new investors while women made up 36%.
Young entrants notch positive numbers
65% of new investors own traditional trading products compared to 85% of older investors. New entrants made up their number from the digital asset market 54% compared to older investors with a mere 25%.
Although crypto was mainly seen as risky in previous years, several traditional firms and wholesale clients have now been exposed to the asset class with Europe setting the tone for a new investor appetite.
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The survey was conducted to determine the levels of financial literacy among the French population as new retail investors have been recorded in recent years. It involved 1,056 relatively new investors in shares, and virtual assets, analysing their motivations for meddling in certain products.
In furtherance of its objectives, a second document will be released in 2024 in partnership with the Banque de France and will highlight “financial education strategies” for new retail investors.
Diversification and profits drive investment
Participants listed several reasons for investing in financial products ranging from diversification to higher income and sustainability. 35% of participants were moved to invest in the market based on having multiple asset classes while 28% invested based on profits and another 28% were advised to do so by a trusted party.
Most investors derive their information from product documents, acquaintances, media, and financial institutions. Due to financial uncertainties, most young investors expressed caution in all markets.
“The majority of new retail investors (61%) say that they will opt for moderate-risk investments with “moderate risks and returns”. Others prefer low-risk investments (21%, 28% of women). Only 16% said they would prefer to invest in “high-return, high-risk investments” (20% of 25-34 year-olds, but 12% of 18-24 year-olds).”
French financial authorities have stated the need to have a properly regulated digital asset sector to protect all stakeholders and promote transparency while enhancing cross-border payments.
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