Although the stock exchange started to pick up again in the spring of 2009, on balance households have not purchased any securities since. In addition, the price losses incurred were not offset despite the recovery of the stock exchange.
Households have not yet returned to the stock exchange
|Date||26 May 2011|
Dutch private investors have not yet returned to the stock exchange. During the financial crisis, Dutch households on balance sold EUR 4 billion in securities, EUR 2.5 billion of which was contributed by the conversion of ABN Amro Bank shares for cash when the institution was taken over.
During the financial crisis, investments worth approximately EUR 40 billion evaporated from portfolios as a result of price drops. Since then, about EUR 25 billion has been recuperated. At the end of February 2011, households’ investments stood at about EUR 100 billion.
Although households did not extend their portfolios with new investments, there were shifts between the various products within the portfolios. For instance, during the financial crisis, households sold investments funds and purchased bonds, probably in a move to more security. Since the recovery of the stock exchange, more or less the reverse process took place. The development in shares held by households is first and foremost influenced by the conversion of ABN Amro Bank shares into cash. Next, during the peak of the financial crisis and the strong price declines, households actually bought more shares. Since the recovery of the market, households have shown little trade in equities.
Investments in AEX funds
Investments by Dutch households in shares included in the AEX-index in February 2011 totalled approximately EUR 16 billion, about EUR 6 billion less than before the outbreak of the financial crisis in August 2007. In recent years, households have made no significant changes to their AEX portfolios. However, as the situation in the financial markets deteriorated in the autumn of 2008, households purchased EUR 1.3 billion in AEX funds. Households showed particular interest in shares that had strongly gone down in value. For instance, they bought more than EUR 1 billion in shares of financials. At the peak of the financial crisis, households clearly followed an anti-cyclical strategy with respect to shares.
In absolute terms, shares in Royal Dutch Shell are the most popular among households (almost EUR 4.5 billion, representing 26% of the AEX portfolio held). BAM Groep (in percentages of market capitalisation of the share) is relatively strongly represented among households.
For more information on investments of households, click on the adjoining link for the complete article.