More investments in emerging markets by Dutch households

Dutch households invested more in emerging markets such as China, South Africa and Brazil last year, according to De Nederlandsche Bank (DNB). The total value of those investments wind up decreasing because of falling share prices, the Dutch central bank said on Monday.

A net amount of 162 million euros flowed into investments in emerging markets last year, mainly through investment funds. That figure was 76 million euros in 2021 and 31 million euros in 2020. The DNB said that the low savings account interest rate made it more attractive for investors to take more risk. Emerging markets are seen as an alternative asset class, where higher returns are expected.

The central bank said that South Africa received the highest amount of equity investment made in emerging markets. This was mainly due to positions held by Naspers, the parent company of Amsterdam-listed tech investor Prosus. China took second place, which also accounts for investments made in Hong Kong, the DNB said. Brazil was in third place.

The total value of Dutch households’ investments in emerging countries fell due to losses on the financial markets. At the end of last year, the total value was more than 2.2 billion euros, compared to the record level of more than 2.6 billion euros at the end of 2021.

Investments in emerging markets thus account for approximately 2 percent of the total securities holdings of Dutch households. The total value of all investments by households stood at 156.5 billion euros at the end of last year, according to the DNB.