Scandinavian Working Papers in Business Administration
Working Papers,
Örebro University, School of Business
No 2026:8: Narrow Portfolios in a Thin Market: Retail Holdings and Investor Composition in Romania
Daniela Andrén (), Dan Gabriel Anghel () and Olha Kyrkelan ()
Additional contact information
Daniela Andrén: Örebro University School of Business, Postal: Örebro University, School of Business, SE - 701 82 ÖREBRO, Sweden
Dan Gabriel Anghel: Faculty of Finance and Banking, The Bucharest University of Economic Studies, Bucharest, Romania, Postal: 7 Mihail Moxa Street Bucharest, 010961, Romania
Olha Kyrkelan: Faculty of Finance and Banking, The Bucharest University of Economic Studies, Bucharest, Romania, Postal: 7 Mihail Moxa Street Bucharest, 010961, Romania
Abstract: Retail investors in emerging capital markets often hold narrow portfolios, but whether this reflects limited investment opportunities or investor-specific frictions remains an open empirical question. Using 96,220 investor-date observations for 43,360 clients of a large Romanian broker between December 2020 and August 2023, we examine portfolio breadth, concentration, and investment allocation. Individual portfolios are narrow: the median contains five distinct financial instruments, and the mean effective number of holdings is 4.25. Brokerage portfolio value is positively associated with portfolio breadth, both across and within investors, although the evidence does not establish a causal relationship. Conditioning on portfolio value reduces several demographic and socioeconomic differences, but substantial heterogeneity remains. Fund and ETF participation increases with portfolio value, while the unconditional portfolio share allocated to these instruments declines. Domestic concentration is substantial: approximately three-quarters of investors hold only Romanian-classified financial instruments in August 2023, and the within-investor domestic-share gradient is small. In contrast to narrow individual portfolios, the aggregate client portfolio has an effective number of approximately 44 holdings, while 3,534 distinct foreign financial instruments appear in client holdings over the observation period. These comparisons reveal a broad observed range of financial instruments but do not establish the opportunities effectively available to each investor. Finally, changes in investor composition substantially affect portfolio statistics: between December 2022 and August 2023, average portfolio breadth declines by 0.58 instruments, despite increasing by 1.19 among continuing investors. The findings provide new evidence on the relationships between portfolio value, investment allocation, and investor composition in an emerging capital market, without attributing these patterns to a uniquely identified mechanism.
Keywords: household finance; portfolio diversification; retail investors; emerging capital markets; Romania
JEL-codes: D14; G11; G51; G53; P34
Language: English
93 pages, October 29, 2026
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