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Are millennials leading the investment charge?

26/08/2020

Millennials appear to have an increased interest in investing and are even investing more as a result of COVID-19. Here’s why they’re investing – and where.

In early August, Reuters published an article stating that a recent rise in equities investment had been driven by millennials. They cited statistics from Interactive Investor that showed a 250% Q2 year-on-year rise in SIPP and ISA account openings, as well as a Calastone survey revealing that 69% of millennials with existing investment portfolios plan to add to them or have added to them in the last month. 

Further analysis of the Calastone data shows that millennials have been far more likely than their older counterparts to make new investments during the pandemic – a trend that they reveal is even more marked in the US than in the UK.

 

Why are millennials so keen to invest?

A study by Finder.com shows that it is actually the initial coronavirus market crash that has inspired millennials to invest within the next year

With many millennials concerned about losing their job during the pandemic, or concerned that they do not have enough saved should something similar happen in the future, could now be a good time to invest?

25-year-old account manager, Tom Butterworth, says, “I can see that during this crash is a good time to buy due to prices being so low … I have only just come into a position where I feel comfortable investing a small amount each month,” 

 

Where are millennials investing?

Ethical investments appear to be a rising trend in general, but experts predict that it is a sector of particular interest to millennials. A UBS investor survey shows that three-quarters of millennial investors have an interest in sustainable investing, compared with a quarter of older investors. 

That said, a study also shows that just a quarter of millennials are choosing stocks or equity investments as their savings method of choice, with many instead choosing more traditional savings accounts to put money aside for a house or a holiday, as opposed to saving for retirement. Even amongst those receiving large inheritance amounts, say YouGov, only one in ten millennials will actually invest this money.

Results from the Finder.com study suggest that millennials are keen to invest in businesses that have seen their share price plummet as a result of COVID-19. The same study cites the rise of investment apps as an impetus for increased investment interest. Finder.com’s Charlie Barton says, “By welcoming young investors with slick UX and low charges, I’d expect the trend of young people investing to continue upwards. Those that also educate new investors will be building loyalty for the long term.”

 

Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.

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