BA-CA Money Investment Barometer:
"Contingency Fund" Greatest Motivation to Save
- Product demands reflect savings motivation, capital guarantee popular
- Every Austrian saves EUR 191 per month or 11.7 per cent of his or her net monthly income
- Pioneer Funds Austria Öko Garantie 9/2014 starts on 13 August
Building up a "contingency fund" is the single most frequent motivation for Austrians to save. This was revealed by the latest BA-CA Money Investment Barometer, a representative survey completed by the market research institute FESSEL-GfK for Bank Austria Creditanstalt (BA-CA). According to the data collected, just under 50 per cent of the population sets money aside regularly so that they have extra funds at their disposal should an emergency arise. The second and third most common reasons to save are for major purchases and building up a nest egg for the future.
„The ‚contingency fund’ is and has been the most common reason to invest by far. This clearly shows that savers are thinking about the future,“ says Werner Kretschmer, BA-CA director for Private Banking and Asset Management. And nearly two thirds expect that they will be able to save more or at least as much as today in three years. Especially people age 29 and younger are optimistic about the future. Persons 50 and older are less pessimistic than they were in 2006.
The desire to secure one’s financial future is also reflected in the characteristics that the customers demand for the bank products. „The capital guarantee remains the most important selection critereon when choosing between products. This is true for the users of traditional savings products and also for customers who invest in securities,“ says Kretschmer. Sixteen per cent of those polled want to have their money available at any time and that their investments entail no or only low risk. Customer demand is accordingly high for investment products with a capital guarantee. BA-CA has placed EUR 866.4 million in guarantee products since the beginning of the year.
When asked „How would you manage EUR 10,000“, over half of the respondents indicated that they would entrust the funds to the care of their personal advisor at their main bank. Twenty per cent would collect offers from multiple banks, and eighteen per cent would use different information sources.
New monetary wealth formation expected to reach record high in 2007
After the price corrections in the summer of 2006, many investors in Austria took advantage of the subsequent rebound on the stock market to reap profits. Especially foreign stocks were sold in the second half of the year. At the same time, there were no major IPOs, and fewer domestic stocks were bought as a result. This development was also seen in investment funds. The higher level of investment inflow was only able to compensate for this in part, and the formation of new monetary wealth in 2006 amounted to EUR 168 per person and month, significantly lower than the level achieved in 2005 and at about the same level as in 2004.
„Demand for investment funds and stocks remained weak in the first quarter of 2007, but activity was brisk with savings deposits and bonds. This should be enough to propel new monetary wealth formation for the year to EUR 191 per month and person in Austria, a new record,“ says BA-CA economist Stefan Bruckbauer. This 5 per cent growth will be similar to the levels seen from 2003 to 2005. Of these EUR 190 per month, BA-CA expects that nearly half will be deposited at banks. The second-largest share, around EUR 40 per month, will again be put into life insurance, followed by EUR 21 in bonds and EUR 16 in stocks. As the year progresses, BA-CA anticipates that investment funds will recover slightly and see a slight net increase, though only of EUR 7 per person and month.
Overall, the robust formation of monetary wealth in Austria is still being driven by good income growth and moderte consumption propensity. The EUR 191 per month that the average Austrian invests in monetary wealth this year is 11.7 per cent of his or her income.
BA-CA money tips:
For an investment of EUR 10,000, BA-CA currently recommends Weltaktienindex-GarantieAnleihe 2007-2009/3 and Pioneer Funds Austria Öko Garantie 9/2014.
The earnings of Weltaktienindex-GarantieAnleihe are determined by the development of a stock basket containing the Dow Jones EuroStoxx 50, the S&P 500 and the Nikkei 225, each weighted at one third. It has a term of two years and offers a one-hundred per cent capital guarantee. Pioneer Funds Austria Öko Garantie 9/2014 will be floated on 13 August 2007 and has a 7-years term. Exiting the investment fund is feasible at any time.
For an investment of EUR 1,000, BA-CA recommends ErfolgsKapital fix with a current interest rate of 4.125 per cent and a term of eight months, or the KapitalSparbuch with a 4.25 per cent interest rate and a term of twelve months. Anyone who can save EUR 100 regularly can take advantage of a private pension plan in the form of VorsorgePlus-Pension or PensionsManagement GoldenGate.
Enquiries: Bank Austria Creditanstalt Press Office Austria
Tiemon Kiesenhofer, Tel. +43 (0)5 05 05 ext. 52819;