The average holding period for equity funds has dropped by 40% since 2016, marking a “dramatic shift” in investor behaviour, according to Calastone.
Investors held equity funds for seven years on average in 2016, but that has dropped to four years in 2024.
This fall was sharpest in global equity and bonds funds, with holding periods halving from eight years to four years since 2016.
Edward Glyn, head of global markets at Calastone, noted that investors are monitoring their portfolios more closely and making more frequent adjustments. Trading volumes increased by almost 80% on Calsatone’s network between 2018 and 2024, reflecting this more active approach from investors.
This changing behaviour is “signalling a new era” for the investment industry, Glyn added – one which asset managers need to adapt to.
“This shift in investor behaviour poses both challenges and opportunities for the asset management industry,” he said. “Investors now demand greater control, transparency, and flexibility in managing their portfolios, driving an industry-wide need for innovation.
“Traditional models, reliant on static, long-term holdings, are giving way to a more dynamic, personalised and responsive approach to investment. Fund managers must now cater to a more engaged investor base.”
A key way the investment industry can keep up with changing demand is by adopting tokenisation, Glyn said. By streamlining lengthy processes such as fund creation, administration and distribution, it can eliminate “many of the inefficiencies that frustrate today’s investors”.
“The increasing engagement, levels of sophistication and shorter holding periods we’re seeing indicate a profound shift in investor behaviour,” Glyn added. “The challenge for the industry is to meet these expectations without adding complexity or cost.
“Innovative solutions, such as tokenisation, offer a powerful means of achieving this balance by making the investment journey more engaging, faster, more transparent, and more accessible.”
This story first appeared on our sister publication, Portfolio Adviser.
