ETFs win over newcomers as they invest into the stock market

In its quarterly publications, the Autorité des Marchés Financiers (AMF) has noted a fourfold increase in just five years between the second quarter of 2019 and the second quarter of 2024 of the number of French retail investors who have carried out at least one ETF transaction. To gain a better understanding of this trend, the AMF analysed transactions in all the securities under its supervision, whether by French or European investors. This enabled AMF to observe differences in behaviour on either side of the border in relation to the equities and ETFs under its jurisdiction.

A total of 266,300 French investors bought or sold ETFs at least once in the second quarter of 2024. This figure, twice as high as in the second quarter of 2023, is largely explained by the significant influx of new investors in ETFs in recent quarters.

New French investors under the age of 35 have largely contributed to this trend, helping to bring down the average age of ETF investors from 61.1 to 41.3 years between the second quarter of 2019 and the second quarter of 2024. This drop in age has been more pronounced than for other European investors (for ETFs whose main listing is in France or whose underlier is mainly listed in France), whose average age is now 45.6 years. At the same time, the average age of French equity investors also fell, but to a lesser extent, from 60.7 to 52.3 years.

Change in the average age of investors in equities and related rights, and in ETFs

As a sign of the tendency of younger investors to invest in ETFs, 45% of active French investors aged between 25 and 35 bought or sold ETFs in the first six months of 2024. In 2019, this figure was just 11.7%. They therefore appear to be more in line with the behaviour of other European investors, who were already active in ETFs in 2019. The share of other European investors who traded in ETFs, across all age groups, was 34.6% in 2019 and had risen to 45.8% by the first half of 2024.

The study highlights a fundamental change in French investors’ behaviour when they take their first steps in the stock market. In 2019, unlike other European investors, their first transaction consisted almost exclusively of buying shares. In the first half of 2024, more than a third of investors aged under 45 chose ETFs for their first transaction. This proportion then decreases with age.

First stock market transaction by age group

The AMF also examined the use of fractional investment. To democratise stock market investment, some trading platforms offer the possibility of buying fractions of shares or ETF units, in particular through monthly investment programmes. While fractional investment has grown strongly among other European investors over the last five years (49% use it), it is still very little used by French investors. Only 11% trade fractions of ETFs in very small amounts.

About the AMF
The AMF is an independent public authority responsible for ensuring that savings invested in financial products are protected and that investors are provided with adequate information. The AMF also supervises the orderly operations of markets. Visit our website: https://www.amf-france.org/en