Fund investor profile: younger, more active and focused on equities

Increasingly younger, more active investors who are shifting more towards global equity funds. These are some of the conclusions reached by Openbank’s Investment Fund Observatory, which identifies the main trends in these vehicles and changes in the behaviour of fund customers of Grupo Santander’s 100% digital bank. This ambitious analysis was carried out after examining more than 500,000 orders executed by customers in the last three years through the Openbank investment platform with over 2,500 funds from 120 different managers.

In the last three years, the highest growth of new fund investors at Openbank has been registered among the youngest investor group, with a spike of more than 180% in investors aged between 18 and 39 years. However, the growth is even more pronounced when focusing on investors aged under 30 years, where the customer base has tripled in this same period, largely thanks to the decrease in fees.

At the same time, investors are taking an increasingly more active approach to managing their savings, as evidenced by the twofold increase in monthly trading volume for investment funds in the last three years. This is due, firstly, to the elimination of entry barriers, since customers have the opportunity to invest in most funds marketed by the bank from less than 1 euro (90% of inflows were made into these funds). Moreover, it is clear that there is greater access to information and interest in market trends and events, for example, the various phases of the pandemic, interest rates, inflation, and commodities price volatility, amongst others.

Focus on equities

In this setting, the inclination towards equities is noticeable and from 2018 until today, nine out of every ten euros that Openbank customers invested ended up in funds that invest in shares. Total assets under management in this product type have increased during this period from approximately 40% to 60%.

Within these funds, 60% of net inflows have gone to thematic funds, where products linked to the technology, health, energy or consumer sectors stand out. Meanwhile, 35% of net subscriptions were made to index funds, which already account for a third of the total portfolio of funds marketed by Openbank.

Equities have grown to the detriment of mixed and fixed-income funds, with the exception of funds linked to high-yield debt, one of the few fixed-income subcategories that has not recorded cash outflows in the last three years.

Global and sustainable vision

Another significant change in the last three years is that fund investors are opting for an increasingly global approach, with a view beyond Europe. The inflows into European asset-linked funds (debts or shares) have reduced from 55% to 33%. At the same time, subscriptions to products that invest according to global geographical criteria have increased from 36% to 51%. Inflows into funds that invest in North America, Asia or emerging markets have also increased.

In this context, sustainability is also gaining traction and from 2018 to date, assets under management in funds that invest with ESG criteria have multiplied by more than 20.

Today, Openbank has more than 200 funds managed under sustainable criteria within its open architecture catalogue of more than 2,500 funds.

About OpenBank

Openbank is Grupo Santander’s 100% digital bank with more than 1.6 million customers in Spain, Germany, the Netherlands, and Portugal and €11 billion in deposits. The bank offers a wide range of products, from loans and mortgages to a fully automated digital investment platform that customers can use 24 hours a day, seven days a week via the website or app. It has managed to hold on to its position as the most highly recommended Spanish bank among its customers thanks to its simplicity, agility and security. At present, the bank is immersed in its internationalisation plan and is finalising its entry into the Argentinian market.

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