The share of Lithuanian residents who invest has grown steadily in recent years. This year the largest segments of people who invest allocate 51-100 euros a month to investments and are focused on a long-term investment period of 10 years or more. More than a fifth of those who invest plan during the coming year to increase the amount they invest.
These trends in the country’s investor portrait were revealed by a representative survey of Lithuanian residents conducted on behalf of INVL Asset Management, one of Lithuania’s leading asset management companies, by Spinter Tyrimai in February this year.
The number of people who invest is growing
The annual survey showed that over the last three years the number of people in the country who invest has steadily increased, from 13% of respondents in 2016 to 16% in 2017 and 17% in 2018. According to the data, nearly half, or 48%, of respondents who invest do so for a period longer than 10 years, while a quarter of them invest for 5-10 years and 15% invest for 1-5 years.
This year’s survey showed that a somewhat larger share of men invests, 19.3%, than women, 15.9%. The age group with the largest share of people who invest is 36-45, with 22.1%, and about a fifth of respondents in the 26-35 and 46-55 age groups also said that they invest.
People age 56 and older invest the least (12.5%), while among young people age 18-25 about 14% invest. Groups that more often invest include residents of the country’s bigger cities (23%) and those with the highest income level of 500 euros a month or more (43.8%).
Education is also important: more of those with a higher education invest(28%). In terms of occupations, the largest share of people invest among top and mid-level managers (57.7%), while nearly a quarter of professionals and administrative workers invest, and about a third of both small business owners and farmers do. A significant share of homemakers, nearly 24%, also invest.
“The results of the survey show that this year nearly half of people who invest are choosing long-term investment – that’s good to see. Moreover, there are young people among those who invest, andpeople in that age group have the advantage of time, since periodic investment over a long period makes it possible to get a bigger return even if the amounts invested aren’t big,” said Vaidotas Rūkas, INVL Asset Management’s Chief Investment Officer.
Among those who invest, the largest group, 38%, allocate 51-100 euros every month to investment, while 25% allocate 21-50 euros, 13% allocate between 101 and 200 euros, and 5% allocate less than 20 euros. Larger amounts are more often named by men and by those in the groups with the highest education and income. The majority of people in Lithuania who invest, 61%, do not intend to change the amount they invest this year, but one in five plans to increase how much they invest, and only 3% plan to reduce their investments.
Pension funds are the most popular choice
The most popular investment instrument among people in Lithuania is pension funds, a choice of 54% of those who invest. Groups that somewhat more often put their money in pension funds include respondents age 36-45 (70%), people who live in smaller cities (60.5%) and rural areas (57%), and residents of bigger cities (50.5%). “Pension funds are among the most appropriate solutions for people who want to save for a dignified old age and diversify investments in keeping with the desired level of risk,” Vaidotas Rūkas noted.
According to the survey, after pension funds the investment instruments that people most use are permanent life insurance (45%), deposits (32%), real estate as an investment (23%), and other instruments.
In terms of investment objectives, this year those who invest mainly hope to thus get extra income besides their salary (64%) and to save for retirement (60%), their children’s education (35%) or to buy a home (17%).
More income and knowledge would embolden people to start investing
Asked what factors would encourage them to start investing, the majority of the respondents who do not invest said that would require higher income (71%). Interestingly, this answer was more often given by people in the highest income group (77%), by farmers (91.7%), and by top and mid-level managers (90.9%).
Almost a third of respondents (28%) said that before daring to invest they would need a better understanding of financial markets, another 26% would like a guaranteed return on investments, and 20% mentioned having a clear objective. Nearly one in five would like a bigger return on investments. A better grasp of financial markets and a guaranteed return on investments would more often encourage women and residents of rural areas to dare to invest. “This year we want to draw people’s attention to financial planning, which is essential if you want to effectively manage the money you have,” Vaidotas Rūkas stressed.
INVL Asset Management runs four 2nd pillar and five 3rd pillar pension funds. A total of 137 000 participants were accumulating in them at the end of May this year. The company also manages mutual funds and other financial instruments. INVL Asset Management is part of the Invalda INVL group whose companies have been entrusted with more than 600 million euros of assets by over 190 000 clients in Lithuania and Latvia and international investors.
INVL and Šiaulių bankas merged their retail services as of 1 December 2023.
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INVL and Šiaulių bankas merged their retail services as of 1 December 2023.