Europeans Still Prefer Home Investing Despite Global Calls

European households show a strong preference for investing in their own region rather than globally. According to a recent survey, about half of eurozone households have invested in EU-issued equity by the end of 2024.

This 'home bias' is significant, as it implies that Europeans invest five times more in Europe than they would if they followed a globally diversified portfolio. The European Central Bank found this trend to be consistent with previous data.

A survey conducted over the summer asked people where they preferred to invest. The results showed that 40% of respondents preferred to invest in their own country, while 38% preferred Europe. A third of respondents opted for a globally diversified portfolio, followed by 14% and 11% who preferred the US and Asia, respectively.

This home bias has implications for investment and economic growth. Increasing the availability of risk-bearing capital within Europe could support the valuations of European companies relative to those in other regions.