ETF Investments Surging: French Retail Investors Double Transactions in Five Years

The number of retail investors who make regular transactions in ETF – exchange traded funds or a registered index fund – has doubled in five years, according to the Financial Markets Authority (AMF), which lists almost 300,000 active stock marketers in 2023. Appearing in Europe around twenty year ago, these instruments aim to reproduce a quickly established market index. in the stock market landscape. “Their acceptance is based on the fact that it is almost impossible to beat the market in the long term and that there will be punitive costs associated with active management,” says Olivier Malteste, investment director of Yomoni. On the other hand, ETFs show lower costs each year.

Well established in the United States, where their market share is now higher than traditional currency, these vehicles have grown strongly in Europe in recent years. Between 2018 and 2023, PwC estimates that it averages 18.6% per year. At first, it was mainly promoted by institutional investors: insurers, pension funds, etc. eWe estimate that the share of individuals is around 10% of what is unpaid in Europe. This may be less in France, where the development of these supports has been less marked than in other countries such as Germany, points out Lorraine Sereyjol-Garros, global head of ETF and index fund development at BNP Paribas Asset Management.

The French are nevertheless increasingly active and represent a lever of growth for management companies specializing in the field such as Black Rock, Amundi, Xtrackers, Vanguard or UBS. “ETFs can meet a wide range of needs, whether for saving with a long investment horizon or as a quick trading tool on the markets,” said Emmanuel Monet, head of ETF sales in France at Amundi.

Extensive offer

All the ingredients seem to come together to attract savings, starting with a generous offer. “The range is very complete with more than 3,500 ETFs available in Europe, across all asset classes, geographical areas, sectors of activity and themes,” affirms Olivier Malteste. Furthermore, these supports increasingly accessible, especially through life insurance, which represents a savings windfall of more than 1,900 billion euros.Quantalys believes that one contract in two offers at least one ETF large traditional, such as Afer, doing so to meet the expectations of the customers.

The rise of online players also contributes to this. “For us, 30% of the European ETF collection comes from digital distribution,” says Ivana Davau, head of digital distribution in France, Belgium and Luxembourg at BlackRock. The latter notes a polarization in the market, with, on the one hand, an increase in mandate management in ETFs, where portfolio monitoring is professionally delegated, and, on the other hand , free management through new stock brokers such as Trade Republic, Scalable Capital, Shares, Bux, etc. These players thus contribute to making their support known. “Some distributors advertise and communicate a lot on social networks and, as a result, the word ETF is starting to be more visible,” said Emmanuel Monet. Especially among young people. According to the AMF, at the end of 2023, those under 35 represented 36% of ETF investors, compared to 7% at the beginning of 2018. “The new generation of investors is adopting a more independent, training on the Internet and contact. a few classic financial products”, analyzes Lorraine Sereyjol-Garros.

Latest innovation to date: investment plans, which are very successful in Germany. Behind the marketing concept, a very basic reality involves investing regularly and automatically in ETF portfolios to build long-term savings, painlessly and at a lower cost. The specialized platform ExtraETF estimates that the number of these plans could quadruple in five years. So many drivers that, along with increasingly strict rules regarding tax transparency, pave the way for ETFs for years to come.