Millennials are more interested in thematic investing than other age groups. Especially funds that focus on sustainability, education, infrastructure innovation, food and urbanisation are popular with Generation Y.
This transpires from the results of a study by Schroders among 25,000 investors who plan to invest at least 10,000 euros in the coming year.
According to the asset manager, more so than other groups, millennials are looking for “an experience” and “a good story”. Schroders concludes that millennials are unconventional when it comes to investing. In addition to their greater belief in thematic investments, this is partly because they are more willing to take risks and are more likely to panic in the event of stock market turmoil.
Impulsive investments
The latter is expressed among others in the impulse investments of millennials. This age group adjusts its investment portfolio on average every 1.9 years, whereas Generation X does this once every 2.7 years and baby boomers once every 3.7 years.
23 percent of millennials invest in crypto currencies and crowdfunding, compared to 12 percent of older generations. In this, 53 percent of millennials seem to be affected by the trend concept “Fear Of Missing Out” (FOMO). They believe their greatest risk is that they would not take enough risk to achieve their investment goals.
According to the research, Generation Y investors are only slightly more interested in sustainable investment solutions than their parents and grandparents. 27 percent of millennials value sustainable investment solutions, compared to 21 percent for older generations.
Sustainability not so hot
This finding is surprising, since family offices recently announced an increasing generational conflict, driven by the sustainability theme. Young family members supposedly quarrel with their parents and grandparents about the lack of “greenness” of their investment portfolios. Younger generations supposedly would prefer to do more with their investments in terms of sustainability, while older generations fear this will be at the expense of yields.
97 percent of young investors acknowledge they need to do more to save for their pension; only 16 percent are already putting money aside for retirement. The young generation finds it especially difficult to determine how much money is needed for their desired lifestyle.