- The pandemic was one of the main drivers for Generation Z and millennials to begin investing.
- Generation Z prefers to invest in electric vehicles and sustainable companies.
- YouTube is cited as a main source of information for Generation Z and millennials.
- BUX Zero saw 112% increase in Gen Z clients and 118% increase in millennial clients.
Amsterdam, 15 September 2021 - European neobroker, BUX, unveiled the results of its first generational behavior report intended to better understand the motivations that drive the NextGen Investor, specifically Gen Z and millennials. The new generation of investors is approaching the stock market in increasingly different ways. The growing interest can be explained by various factors including the pandemic, existing economic challenges as well as the emergence of mobile investment platforms. This trend is confirmed by the 112% increase in the number of Generation Z clients in BUX Zero in the first half of 2021 compared to 2020. The same is true for the millennial generation, which has increased by 118%.
Despite the generational differences, millennials and Generation Z share a common outlook -- the future belongs to innovative companies who are changing the way we live. An analysis of the most purchased shares by BUX Zero clients shows that Apple and Tesla are among the most popular stocks in the portfolios of the next generation.
Generation Z investors, specifically, focused on a more diversified investment strategy. This approach includes investing in shares of innovative companies such as electric vehicles (NIO or Tesla) or sustainable companies (Beyond Meat). However, they also invest in classic blue chip companies such as Apple and ASML.
The investing patterns of millennial investors is not dramatically different, with interest in electric vehicles (NIO, Tesla), home delivery companies (Just Eat Takeaway) or financial services (Ayden). Blue chip stocks also have a strong presence in their portfolios (Apple, ING and Shell).
"Our ambition is to better understand the motivations and needs of the next generation of investors in order to provide a solution that perfectly fits these needs. We live in a time where the world of finance is rapidly becoming more democratic and investing has become increasingly more accessible. The intergenerational differences between Generation Z and millennials, while more prominent in other ways, are not that dramatic when it comes to building a portfolio that matches their beliefs." Said Yorick Naeff, CEO of BUX.
The choice to invest in ETFs by Generation Z shows a particular interest in companies that are innovation focused. Among the most popular, Generation Z invests in the Nasdaq ETF (3rd), which focuses on the technology sector, the robotics and automation sector (4th), the healthcare sector (7th) and the cyber security sector (10th). Generation Z also looks to stable ETFs such as the S&P 500 (1st) for balanced investments.
The millennial generation displays similar investment behaviour. ETFs of the most innovative companies also top the list. The robotics and automation sector comes in third, the technology sector (Nasdaq) in fifth and healthcare in seventh place. The stable S&P 500 ETF also comes in first place for millennials.
Millennials and Generation Z investors have shown that they lean towards thoughtful, long-term investing based on their portfolios. Interestingly, both generations that we interviewed agreed that their main source of information is YouTube and influencers.
Additionally, several sources of information including podcasts or company analysis reports are cited by both generations. Even more surprisingly, Elon Musk and Joe Biden are said to be influencers of Generation Z's investment behaviour.
You can find the full report on the investment behaviour of the next generation of BUX Zero retailed investors here.