Today’s tech-savvy millennial generation is increasingly choosing to invest in ETFs accessed by apps.
A recent survey by leading broker and asset manager Charles Schwab shows that more than half of millennials (56%) say ETFs are their investment vehicle of choice, more than any other generation.
The Schwab ETF Investor Study also showed 60% of millennials surveyed expect to increase investments in ETFs in the next year, and 63% expect ETFs to be the primary investment vehicle in their portfolio in the future.
While the Schwab survey was conducted in the US, there are signs that the ETF love among younger investors could be spreading here – which is why Simon Glover of ITI Group recently launched The ETF Centre and the ETF Select 100 with Equiniti Selftrade.
'ETFs are a great fit for a fee conscious generation and are easily accessed digitally, not across an old oak table from a friend of your Dad,’ he said.
Glover believed that the broad diversity that can be found in just one low cost ETF is a big plus.
'Millennials have better things to do with their time than researching individual stocks or worrying whether an active fund manager is might underperform,' he said.
A social conscience also drives millennials to ETFs, according to Glover.
‘We’ve just seen the launch of the first pure climate change ETF on the LSE and it’s the millennials who will experience the effect of global warming. Themes such as this resonates strongly in our workshops and is an area we will expand at the ETF Centre.’
Meanwhile an increasing number of apps - such as Moneybox - are appearing that enable tech-savvy millennials to invest as little as £1 into a limited number of funds.
The Moneyboxapp website comes complete with simple 90-second videos on how to get started.
Whatever age you are, it’s worth taking a look to see what’s happening and how your own digital offering measures up.
Citiwire New Model Advisor
14th September 2017