Austrians are saving more, but are foregoing returns

What do Austrians think about stocks, investment funds, etc.? 6 out of 10 see them as an opportunity to make profits. Around 40% state that the importance of securities is rising and also consider them suitable vehicles for retirement provision. 80% are also aware of the risk that losses can be incurred through such investment approaches, while every second respondent thinks securities are difficult to understand.

More knowledge, more investment in securities?

More than 40% of Austrians would consider investing in securities if they had appropriate knowledge. When it comes to explaining financial terms, Austrians are often out of their depth. This is confirmed by the study’s results: 80% of the respondents are unable to define terms like “volatility”, 58% are unfamiliar with the term “issue price” and every second respondent has never heard about “face value.” 4 out of 10 are also unable to explain what “ATX” (the leading stock index of the Vienna Stock Exchange) stands for, and just as many don't even know what an “investment fund” is. “As advisors, one of our tasks is to explain such things in a comprehensible manner and to meet customers at their  level of knowledge. This is the only way in which a sensible investment strategy can be worked out jointly with the client,” says Schaufler.

While the public’s knowledge about the subject of investments is not exactly well developed, it is worth noting that almost 8 out of 10 Austrians regard the advisor in their bank branch office as the preferred contact person regarding finance-related topics such as investment. Austrians are far less likely to rely on gaining such advice from friends and acquaintances, who range far behind with 28%, as does the internet with 18%. Schaufler: “We want to live up to the confidence placed in us by providing our clients with the best investment advisors in the marketplace.”

Three-quarters of Austrians have already had a consultation with an advisor from their house bank, with 59% of these also addressing the subject of investing.
 

Investment diversification as the solution

When considering the long term, one thing quickly becomes clear in the context of investment: there is no one-size-fits-all recipe that works equally well for everybody, and every asset class has its ups and downs. “This is why diversification across different asset classes is so important,” Schaufler emphasizes. The investment concept You Invest, which Erste Bank and Sparkassen launched three years ago, reflects precisely this approach. The managed umbrella fund with four risk categories has in the meantime garnered EUR 1.3 billion in assets under management. You Invest “Balanced”, with a current allocation of 70% bonds and 15% stocks, has attracted the largest share of investment interest. Its performance since inception amounts to approx. 3% p.a. This fund also reflects the safety-consciousness of Austrians quite well, due to its relatively conservative strategy. A new feature of You Invest is that investors can now join already with a lump sum deposit of EUR 3,000 (previously, the minimum had been EUR 10,000). It is now also possible to take advantage of You Invest without depositing a lump sum, namely by investing in instalments of EUR 50 per month through an s investment fund plan.  www.youinvest.at

[1] The category securities was not included in the 2006 survey questions, only ownership of investment funds. Neither was Investment in real estate, thus there is no comparative figure.