ING Think europes pitch book if they invested europeans would prefer to do that in europe

THINK Economic and financial analysis

Europe’s Pitch Book: Europeans still prefer to invest at home Despite widespread pessimism on Europe’s economy and outlook, Europeans are still keen to invest here

One of the key reasons for writing this series is to challenge some of the overly negative assumptions about Europe and reflect on the continent’s strengths, which are often overlooked. This matters because perceptions influence investment decisions. My thinking is simple: if we focus too heavily on the negatives, who would want to put their money to work here? Wouldn’t Europeans decide to invest their money abroad instead? And that has broader implications: weaker investment means less capital available to support European companies, innovation and growth.

First, let’s look at what Europeans actually do. The European Central Bank found that by the end of 2024, about half of the equity holdings of eurozone households had been invested in EU-issued equity. Yet EU-issued equity makes up only about 10% of global market capitalisation. This implies a significant home bias, with Europeans investing about five times more in Europe than we would expect to see if they picked a globally diversified portfolio.

THINK Economic and financial analysis

Eurozone household equity holdings, by issuer region (4Q24 percentage points of total)

Source: ECB (SHS), LSEG, and ECB calculations

Listed shares held by euro area households (institutional sectors S.14, S.15, and S.1MU) by issuer region for the 20 euro area countries at the end of Q4 2024. The dataset includes only listed shares issued by non-financial corporations (institutional sector S.11) and banks (institutional sector S.122) held by households directly, by purchasing shares in them or via investment fund shares. Investment fund holdings are analysed on a look-through basis.

Still, things may have changed since then. So secondly, let’s see what Europeans have to say today. Over the summer, we conducted a consumer survey in Germany, France, Italy, Spain, the Netherlands and Belgium. This is part of a deep dive into their saving and investment behaviour, which we are publishing this week (stay tuned!).

Here’s a sneak peek: we asked people where they (would) prefer to invest. The results showed that 40% preferred to invest in their own country, while 38% preferred Europe. A globally diversified portfolio was preferred by a third of respondents, while 14% and 11% preferred the US and Asia, respectively.