Dutch youth turns to ETFs and crypto to pay for housing

To gain a better understanding of the Dutch investment market, Trade Republic conducted a study this month with renowned research institute Ipsos. More than 1,000 respondents were asked for their opinion, (potential) investors and non-investors alike. 420 years after its invention in Amsterdam, the Netherlands has an active new generation of investors that care deeply about sustainability. At the same time, there are still many barriers to participation, especially the perceived risks and the required knowledge. Moreover, there are striking differences in motivation, financial concerns and investment forms between the younger and older generations.

Current investors are young, highly educated and have a high income 

Half of young people (aged 18-34) are already investing (24%) or are planning to do so. The over-35s are less active: 1 in 5 are already investing and 10% are considering it, but 70% are not. 58% of investors have an above average income, are often highly educated and live in the west of the country. Of the potential investors, 60% are women.

Younger generations care deeply about sustainability

More than half of young people invest sustainably; 30% invest at least half in sustainable equities. The over-35s compare poorly here: 22% invest a small part sustainably and more than a third say they do not intend to invest sustainably. In general, mutual funds, cryptocurrencies and individual stocks are the most popular. Dutch investors find options and structured products the least attractive. 

Apple for the thirst

The main reasons to start investing are on the one hand the low interest rates, on the other hand because friends/family advises to build up wealth or to have a so called apple for the thirst. Barriers to entering the stock market are not having enough money, the perceived risks and the lack of time to study it.

Biggest worries

When asked what concerns respondents most, big differences were apparent. For example, 82% of young investors are mainly concerned about being able to buy a house, twice as much as the over-35s do. The latter is particularly concerned about high inflation and low interest rates. High energy costs are a concern for both groups. Study debt was mentioned by 46% of the elderly, compared to 22% of the young.

'No go's' in investing

While no less than 28% of young investors think it is ok to invest in the sex industry, the group older than 35 is a bit more cautious with 6%. However, both younger and older (potential) investors agree that investing in companies that conduct animal testing, the weapon industry and palm oil industry is a clear 'no'go'.

Opportunities in Google, Netflix, Apple, Microsoft and… Heineken

Both investors and potential investors mainly see opportunities in internet-related companies; Google, Netflix, Apple and Microsoft score the best here. The top 5 is completed by Dutch brewer Heineken, which is appreciated by young and old alike.

Looking, looking not buying

Investments are monitored on a daily to weekly basis, but there is generally only trading a few times a year. There is a clear distinction here in the investment form: cryptocurrencies are viewed several times a week, investment funds a few times a month. People act sparingly, especially the over-35s. Of this group, 70% only trade crypto a few times a year and 28% never even get to the investment in mutual funds. Young people are more active, they trade once a month on average.

Specialized website beats influencer

To the open question where people look for information about investing, the majority said they did not have a specific source. The Dutch have the most confidence in a specialized website about investing, financial advisors and friends and family. All groups have the least trust in influencers and podcasts; 70% of young investors indicate that they do not trust influencers, they mainly rely on information from specialized websites.

Box 3 return for charity

Recently it has come out that the tax authorities have withheld too much money from several people in Box 3. The majority of respondents are aware of this situation, this was the case for 54% of the 35+ and 30% of the 18-34 year olds. However, a large part will not ask for this money back and would rather it be donated to charities.