Investors are becoming significantly more proactive, trading with more frequency and reducing average holding periods across key asset classes, global funds network Calastone has stated.

This shift in investor behaviour has signalled a new era of engagement and dynamism in the investment landscape, according to Calastone.

Its analysis showed that the average holding period for equity funds had fallen from seven years in 2016 to just four years in 2024, a decline of more than 40 per cent.

This increased frequency of trading had resulted in a nearly 80 per cent rise in volumes on Calastone’s network between 2018 and 2024.

The funds network stated that the combination of shorter holding periods and increased trading activity highlighted a growing trend of investors monitoring their portfolios and making more frequent changes to their investment strategies.

The average holding period for bond funds fell from eight years to four between 2016 and 2024, with investors responding to interest rate changes and other macroeconomic factors.

Even holdings that are traditionally more long term, such as global equity funds, have seen holding periods cut in half, from eight to four years, over the same period.

Calastone noted that the shift in investor behaviour posed challenges and opportunities for the asset management industry, with industry-wide innovation needed to meet demand for greater control, transparency, and flexibility in managing their portfolios.

It argued that fund managers must now cater to a more engaged investor base by providing tailored investment products, actionable insights, and seamless experiences that enable investors to make the best decisions.

This will require leveraging digital solutions that improve accessibility, transparency, and efficiency, the funds network said.

"The increasing engagement, levels of sophistication and shorter holding periods we’re seeing indicate a profound shift in investor behaviour,” commented Calastone managing director and head of global markets, Edward Glyn.

“Today’s investors want a more proactive role in their portfolios, and they expect seamless, efficient interactions with an increasing range of investment options. 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."

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