Independent online comparison service moneyland.ch conducted a representative survey of the investment habits of around 1500 Swiss consumers. The survey was carried out by market research institute GfK Switzerland on behalf of moneyland.ch.
Participants were asked how much money they invest through key investment vehicles, including cash, private accounts (checking accounts), savings accounts, pillar 3a retirement accounts, pillar 3a retirement funds, pension funds, stocks, exchange traded funds (passively-managed funds), actively-managed investment funds, gold, white precious metals (such as silver and platinum), real estate, structured products, bitcoin, and other cryptocurrencies (including Ethereum).
The results show a surprising amount of variety in the way in which Swiss invest their money. Investment patterns vary based on the gender, wealth and age of investors, as well as the region (French-speaking or German-speaking Switzerland) and location (urban or rural) of their place of residence.
Women invest differently than men
Women are generally more reserved and cautious than men are when it comes to investing. This pattern is particularly noticeable with regards to higher-risk investment vehicles like stocks, investment funds, speculative investments like structured products, and cryptocurrencies. For example, around half of Swiss men own stocks, compared to around a quarter of Swiss women.
French-speaking vs. German-speaking Switzerland
Depending on the investment vehicle, clear differences in investment behavior between Switzerland’s linguistic regions are also evident. Holding assets in cash, in private accounts and in savings accounts is more common among German-speaking Swiss than among their French-speaking compatriots. Differences in stock market investments are also notable: 41% of participants in German-speaking Switzerland own shares, compared to only 28% of French-speaking Swiss.
Urban vs. rural investors
Most investment categories do not show significant differences across the urban and rural population. This holds true for investments in cash, gold, private accounts, savings accounts and pension funds. Investment funds and exchange traded funds are somewhat more popular among urban consumers. Investment in pillar 3a retirement funds and pillar 3a retirement accounts, on the other hand, is somewhat more widespread in rural areas: 60% of rural participants hold pillar 3a investments compared to 53% of urban participants. This reinforces the cliché that the rural population invests more conservatively than the urban population. The most notable difference in the investment habits of rural and urban dwellers is found in the real estate category: Almost half of non-urban Swiss (48%) invest in real estate, compared to just 38% of urban consumers.
Age-based differences in investment
Investment patterns vary broadly between age groups. The use of private accounts, savings accounts and cash as investment vehicles is most widespread among young adults between the ages of 19 and 25. “Wealth typically increases along with age, which opens up new investment opportunities,” according to moneyland.ch analyst Michael Burkhard. But at the same time, affinity with new technologies and investment vehicles typically decreases with age. For example, investment in cryptocurrencies like bitcoin is far more widespread among young adults than it is among older investors. On the flip side, ownership of stocks, real estate and investment fund shares increases significantly with age.
Wealth-based differences in investment habits
Investment behavior is heavily influenced by the personal financial situations of individual investors. In many categories, a direct correlation between increases in person wealth and increases in investment is clearly visible. These categories include investment funds, exchange traded funds, stocks, real estate, structured products and even 3a retirement accounts. This correlation is not only apparent in the actual amounts of money invested in these categories, but also in the portions of individual investment portfolios made up of these investment vehicles in proportion to other investment vehicles. The correlation peaks at the highest-income group of participants – individuals who hold assets of 1 million Swiss francs or more. Nearly all millionaires invest in stocks and in real estate, two-thirds hold a 3a retirement savings account, 65% hold shares in investment funds, more than half invest in structured products and close to 40% invest in gold.
Cash as an investment
Most consumers hold some cash in the form of coins and banknotes, but only 67% of participants use cash as an investment vehicle. 31% hold small cash investments, 28% hold mid-sized cash investments and 8% hold significant cash investments.
Cash investments are more common among men than among women: 38% of women do not hold cash as an investment at all, while only 28% of men do not hold assets in cash. 31% of German-speaking Swiss do not have cash investments, compared to a significantly higher 42% of French-speaking Swiss.
Young adults between the ages of 19 to 25 are somewhat more likely to invest in cash than older adults – often because they lack the means to invest through other investment vehicles. 77% of young adults use cash as an investment, compared to an average of 66% among other age groups.
Private accounts and savings accounts
A surprising number of Swiss consumers use private accounts as investment vehicles. 44% hold a fair amount of assets in private accounts, while 15% have large amounts of assets sitting in private accounts. Private accounts are a poor choice of investment vehicle because banks currently pay little to no interest on assets held in private accounts for adults.
Figures for savings accounts are similar: 17% of participants do not hold assets in savings accounts, 19% have small savings account balances, 43% have mid-sized investments in savings accounts and 21% hold large amounts of assets in savings accounts. That makes savings accounts – along with private accounts – the most popular investment vehicle in Switzerland. 24% of participants in French-speaking Switzerland do not invest in savings accounts, compared to just 16% in German-speaking Switzerland.
The use of private and savings accounts as investment vehicles is more widespread among young adults than it is among older investors. A high 91% of young adults invest money in private accounts. Of these, 19% invest a large portion of their money in private accounts, while private accounts make up the entire investment portfolio of 5% of young adults. A possible explanation for this is the fact that many young adults hold relatively low amounts of wealth, and few alternatives for low-value investments are available. “The more favorable rates at which banks pay interest on assets held in youth and student accounts also plays a role,” says Michael Burkhard.
45% of participants do not invest in 3a retirement savings accounts, while 11% have small investments, 31% hold mid-sized 3a account investments and 13% have large 3a retirement account balances. 3a fund-based products are less popular than 3a retirement savings accounts: 57% of participants have not invested in a 3a retirement fund, 9% have small 3a retirement fund investments, 25% have mid-sized investments and 9% have invested large amounts of money in 3a retirement funds.
Women invest less money through the pillar 3a than men do – with the difference being more pronounced with regards to retirement funds. While the use of 3a retirement funds is similar among French-speaking and German-speaking Swiss, there are notable regional differences in the use of 3a retirement accounts. 56% of participants in French-speaking Switzerland do not have a 3a retirement account, compared to 43% of German-speaking Swiss.
While only 38% of investors with personal wealth of 20,000 francs or less invest in 3a retirement savings accounts, this figure increases steadily along with wealth. At 54%, more than half of individuals with personal wealth of 20,000 to 50,000 francs hold 3a account balances, while more than two-thirds of millionaires hold 3a retirement savings accounts.
Age-based differences in 3a investments are also interesting. Of investors between the ages of 50 and 74, 47% have invested in 3a retirement savings accounts. The figure is much higher for adults aged 26 to 49, with 66% (almost two-thirds) of adults in this age group investing in 3a savings accounts. At 43%, the portion of young adults aged 19 to 25 who hold 3a retirement savings accounts is relatively low. “Unlike many young adults, a large portion of middle-aged adults can afford to tuck away money in 3a retirement savings. Pillar 3a investments are then withdrawn around the time that adults reach retirement age,” clarifies moneyland.ch CEO Benjamin Manz.
Stocks as an investment
61% of participants do not own any shares at all. 13% invest a small amount of money in stocks, 18% invest a mid-sized amount, and 8% hold significant stock investments. Gender-based differences in stock investments are major: 72% of women do not own shares, compared to just 51% of men. 12% of men hold significant stock investments, compared to 4% of women.
Only 30% of young adults aged 19 to 25 own shares, compared to 36% of adults between the ages of 26 and 49 and 43% of adults between the ages of 50 and 74. The Röstigraben – the linguistic and cultural gap between French-speaking and German-speaking Switzerland – is apparent in stock market investments, with 72% of participants in French-speaking Switzerland not investing in shares, compared to 59% in German-speaking Switzerland.
An interesting insight provided by the survey is the positive correlation between personal wealth and share ownership. “The pattern here is: the wealthier investors are, the more likely they are to invest in stocks,” explains Benjamin Manz. Of investors with personal wealth of 20,000 or less, 15% hold some amount of stock investments. That figure is 29% for investors with personal wealth of between 20,000 and 50,000 francs hold stock investments, 41% for those with personal wealth of 50,000 to 100,000 francs, 47% for those with fortunes of 100,000 to 300,000 francs, 63% of investors with 300,000 to 500,000 francs, and 73% of investors with personal wealth of between 500,000 and 1 million francs. The highest proportionate use of stocks as an investment vehicle is seen among those with a fortune of 1 million francs or more, with 92% of investors in this wealth bracket holding shares. One-third of millionaires hold large to very large stock investments.
75% of participants do not hold shares in any actively-managed investment funds. 8% have small investments in funds, 13% have mid-sized investments in funds and 4% invest large amounts of money in investment funds. As with stock investments, the number of men who invest in funds is proportionately higher than the number of women who make use of investment funds. 82% of women do not hold shares in mutual funds, compared to 68% of men. Investment funds are less popular in French-speaking Switzerland than they are in German-speaking Switzerland: 28% of German-speaking Swiss invest in mutual funds compared to 16% of French-speaking Swiss.
Readiness to invest in funds increases in direct relation to personal wealth: 65% of millionaires own shares in investment funds – with 23% of millionaires investing very large amounts of assets in funds. Age also plays a role: Only 20% of young adults between the ages of 19 and 25 invest in mutual funds, compared to 28% of adults aged 50 to 74.
ETFs (Exchange Traded Funds)
Investment in passively-managed exchange traded funds (ETFs) is even less established in Switzerland than investment in actively-managed investment funds and direct investment in stocks. 86% of survey participants did not own any ETF shares. 4% only invest a small amount of money in ETFs, 7% have mid-sized ETF investments and 3% have invested a large amount of money in ETFs. 79% of men do not own ETF shares, compared to 92% of women. ETFs are somewhat less popular in French-speaking Switzerland than in German-speaking Switzerland.
In relation to other wealth groups, the number of wealthy individuals who invest in ETFs is disproportionately high, possibly due to better education about the cost-saving benefits of ETFs. Almost 47% of Swiss millionaires have invested in ETFs, with 10% investing large amounts of money in ETFs. “Interestingly, age of investors has a less significant impact on readiness to invest in ETFs than it does on readiness to invest in actively-managed funds: ETF use is similar across all three age groups,” explains Benjamin Manz.
Gold and other precious metals
19% of participants have invested in gold. 11% have small gold investments, 5% have mid-sized gold investments and 2% have large gold investments. White precious metals like silver and platinum are less popular: Only 10% of participants have invested in white precious metals, with 5% holding small investments, 3 percent holding mid-sized investments and 2% having large white precious metal investments.
Gender-based differences are less pronounced in this category: 79% of men do not invest in gold and 87% do not invest in white precious metals. By comparison, 84% of women do not invest in gold and 93% do not invest in white precious metals.
While gold as an investment is more popular in German-speaking Switzerland than in French-speaking Switzerland, investment in white precious metals is similar across both regions. Here too, the number of millionaires who invest in gold is disproportionately high compared to other wealth groups: 38% of investors in this wealth bracket invest in gold and 32% invest in white precious metals. Gold is also a popular investment among young adults, with 22% of adults aged 19 to 25 years old investing in gold.
Real estate has retained its popularity as an investment vehicle, with 41% of participants investing in real estate. 4% have made small real estate investments, 18% have mid-sized real estate investments and 19% have made large investments in real estate. In most cases, real estate investments take the form of investment in the personal residences of investors. 53% of men do not have any real estate investments, compared to 65% of women.
The direct correlation between personal wealth and real estate investments comes as no surprise. The higher the wealth bracket of an individual investor, the more likely they are to invest in real estate. 67% of investors with a personal fortune of 500,000 to 1 million francs hold real estate investments, while 93% of millionaires invest in real estate. Age-based differences in real estate investment are also hardly surprising: More than half of adults between the ages of 50 and 74 have real estate investments.
88% of participants do not hold structured products, while 4% have small investments, 6% have mid-sized investments and 2% have made major investments in structured products. Men are more likely to own structured products than women. Investment in structured products also increases in relation to personal wealth: A disproportionately large 32% of investors with personal wealth of 500,000 to 1 million francs invest in structured products, while 53% of millionaires have structured product investments.
Bitcoin and other cryptocurrencies as investments
So far, Bitcoin and other cryptocurrencies have not established themselves as actual mediums of exchange. However, they are used as investment vehicles. In relation to the other investment vehicles included in the survey, cryptocurrencies like Bitcoin are the least widely used investment vehicle in Switzerland. 92% of participants do not invest in bitcoin, 3% have made small bitcoin investments, 3% have mid-sized investments and 2% have invested large amounts of money in bitcoin. Investment in cryptocurrencies other than bitcoin is less widespread.
Cryptocurrency investments are less popular among women than among men: Only 4% of women who participated in the survey have invested in bitcoin. Interestingly, cryptocurrencies are somewhat more popular in French-speaking Switzerland than they are in German-speaking Switzerland: 10% of participants in French-speaking Switzerland have invested in bitcoin (although investments are typically small) compared to 7% in German-speaking Switzerland. “A disproportionately high 12% of millionaires invest in bitcoin,” according to Michael Burkhard.
Lastly, there is also a correlation between cryptocurrency investments and age: Only 4% of adults between the ages of 50 and 74 years old have invested in bitcoin, compared to 10% of those aged 26 to 49 and 14% of those aged 19 to 25.
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