The rise in interest rates and the savings accumulated by many households during the pandemic are encouraging many individuals to invest their money. Where to put it now that after several years of negative rates it begins to offer profitability? The US bank JPMorgan has carried out a survey in Spain among 1,300 individual consumers of savings products in which, regardless of their assets, it asks them where they have invested in recent months and if they plan to continue doing so. The responses give a clue as to which trends are already beginning to take shape.
The first thing that can be seen in the survey is that the number of consumers of savings products who do not plan to invest anything in the next six months has gone from 30% to 20%. 31% of those who are going to invest cite interest rates as the factor that encourages them to do so now, while 29% allude to the situation in the markets, which may improve after accusing the uncertainty resulting from the invasion of Ukraine, and 21% talk about the attractiveness of banking products. Only 12% will do it for taxation.
And where do those who invest put their money? In general, all categories are gaining weight, but investment funds, pension plans and shares on the stock market are now the fastest growing destinations among individual investors. Deposits and real estate investment are also increasing, but at a slower rate. As a novelty, the star product, that of Treasury bills and public debt, exceeds 10% for the first time, which also draws the attention of JPMorgan.
The report shows that 86% of Spanish private investors had deposits, passbooks or savings accounts in the fourth quarter of last year, compared to 85% a year earlier. 43% had pension plans, 30% investment funds, 25% shares on the stock market, 20% real estate investments and 10% Treasury bills or another type of public debt.
Treasury bills have generated great interest among individuals in recent auctions, offering returns close to 3%, compared to bank deposits, which are on average below 1%. Banks are refusing to reward savings as they still have sufficient liquidity and investors are looking for alternatives in public debt, which is more profitable and safer.
JPMorgan indicates that individual savers and investors are gradually beginning to recover confidence in the markets, although its index to measure this sentiment is still at a level of -0.99, below the 0 from which it classifies the optimistic situation. This indicator is part of what it calls the "investor confidence index", which has been prepared by its manager, JPMorgan Asset Management, on a quarterly basis since 2007.
The result is not entirely negative, as it contrasts with the -2.71 in the third quarter of last year. Between the end of 2020 until the invasion of Ukraine, the index had been positive. Now, the report indicates, confidence in the evolution of the stock market is "evidently" improving and there is a perception that the war in Ukraine is stabilizing, although we will have to wait for the next few months to see if optimism returns.
The product in which private investment has also increased has been pension plans, in which the percentage of investors has gone from 38% to 43%, despite worsening taxation, in which raised the tax base from which it is necessary to declare this type of savings.
The data from the Inverco collective investment association this week show, on the other hand, that the profitability of pension plans has been negative in 2022, with a decline of close to 10%. In the last 25 years, the return on this type of savings has been an average of 2.5% per year.
