The number of young Australian investors interested in the sharemarket has grown rapidly, with the number of investors from Gen Z and Gen Y who held domestic shares jumping more than 68 per cent and 16 per cent, respectively, in the 12 months to 31 July, according to the nabtrade’s data.
Nabtrade’s director of self-managed superannuation fund (SMSF) and investor behaviour, Gemma Dale, noted that this was the highest number of domestic holdings held by Gen Y and Gen Z investors’ nabtrade had ever seen.
The interest in the sharemarket among Australian investors, as young as 18, was driven by a combination of factors such as a low price point, better accessibility and high quality of research in the market.
Also, the study found that Gen Y and Gen Z investors had a good understanding of fundamental investment principles such as diversification, by investing in both exchange-traded funds (ETFs) and listed investment companies, as well as high yield, blue-chip domestic and international stocks.
“We also believe parents are encouraging their kids to make good financial decisions from a younger age,” Dale said.
“And, for the first time, younger investors are getting targeted services from financial institutions which understand that a growing number of millennials want to build wealth outside of property and super.”
Domestically, the top ten holdings for Gen Z and Gen Y were the Big Four, Telstra, A2 Milk Company, Vanguard Australian Share Index ETF and Intecq. By contrast, baby boomers and Gen X tended to hold stocks of Woolworths, Telstra, CSL, the Big Four and Macquarie.
As far as international stocks were concerned, baby boomers were attracted to Amazon, Apple, Facebook, Alibaba, Direxion Daily Jr Gold Miners Bull ETF and Bank of America.
At the same time, younger investors decided to hold stocks of Tesla, Advanced Micro Devices, Facebook, Snap and Makemytrip.