Almost 40 per cent of first-time ETF investors are Millennials, according to new research by BetaShares and Investment Trends.
BetaShares and Investment Trends have launched a joint report that examines the attitudes of people who are currently invested in (or considering) ETFs.
According to the report, the average age of ETF investors had dropped: the average age of those who began investing in ETFs five years ago was 56, whereas the average age of those who began investing in ETFs 12 months ago was 42.
Furthermore, Millennials were found to have the greatest appetite for ETFs, with the report revealing this demographic made up 38 per cent of online investors currently or intending to use ETFs.
Speaking in Sydney on Wednesday, BetaShares chief executive Alex Vynokur indicated ETFs were a point of entry into the investment world for younger generations.
“Something we look at is: what holds people back from investing? And the number one thing people tend to say is: ‘I don't know what to invest in,” Mr Vynokur said.
“So ETFs, in a sense, come around and solve that problem for millennials.”
He added that economic factors such as the “very low interest rate environment” as well as a lack of housing affordability had led younger investors to “rethink about their wealth creation strategies” and attract them to the ETF industry.
“The default path for saving up for a deposit and buying a place is actually becoming quite a challenging one, and what we've seen in response to that is interest in building wealth through exchange-traded funds,” Mr Vynokur said.
He added that developments in investment services such as robo-advice and platforms such as Acorns had helped “to focus the minds of the younger investors on the fact that there are other ways of building wealth other than simply having [to] buy residential property”.
“So a lot of that, we think, will continue into the future,” he said.
ETFs were the investment vehicle of choice for several Millennial investors who were making their very first investment, Mr Vynokur added, and an inroad into investing more generally.
“For many of them, it's actually their first investment, not just their first ETF investment – but it's their first investment.”
This investment vehicle could pose a potential inroad into investing more generally, he argued.
“And if ETFs are started [sic] to become associated with investments, as a default, you can see there is a significant growth opportunity for the industry as that part of the market continues to mature, continues to accumulate more wealth.”
Magellan chairman and CIO Hamish Douglass has said he’s not afraid of missing out on a “short-term market rally” and that mutant virus...