A new breed of investor is coming into the sharemarket in record numbers according to new data from nabtrade.
The data from nabtrade showed that Gen Z and Gen Y investors had increasingly joined the sharemarket over the past twelve months.
Gen Z participation was up 72 per cent while Gen Y participation had increased by 20 per cent over the past twelve months to the end of 2018.
Nabtrade’s director of SMSF and investor behaviour Gemma Dale said turnover among older generations continue to grow but it was young investors who were shaking up the market.
“Over the past two years, we have seen a significant rise in the number of young investors turning to the sharemarket for wealth creation.
“These are serious investors, who are studying the local and international sharemarkets closely and buying shares they know, and investing for the long term,” she said.
Total domestic turnover rose two per cent over the past twelve months with the number of customers with local shares rising 13 per cent.
Ms Dale said investors had re-weighted sector exposures over the year reflection concerns about headwinds facing some sectors.
“Our data showed Baby Boomers and Gen X investors reduced their overall exposure to financials, consumer discretionary and telcos but increased their holdings in healthcare, consumer staples and material stocks,’’ Ms Dale said.
Gen Y investors had bucked the trend though, said Ms Dale, and had slightly increased their exposure in one sector.
“Interestingly, Gen Y investors slightly increased their exposure to financials during the year by 1.5 per cent but reduced their holdings in materials, healthcare, consumer discretionary and telcos,’’ she said.
Blue chip stocks like NAB, CBA and Telstra continued to dominate the top ten domestic stocks among baby-boomers while A2 Milk, Afterpay and Vanguard’s ASX200 ETF were popular among the younger generations.
Gen Y also led the charge in international shares with the demand for international shares increasing by 30 per cent.
The number of new customers dabbling in international shares also rose 32 per cent, led predominantly by Gen Z, Gen X and Gen Y investors. Gen Y investors now represent the largest cohort of investors who traded international shares last year,’’ Ms Dale said.
Ms Dale said younger investors knew that the Australian sharemarket had great opportunities but knew to look overseas for many fast-growing sectors.
“These investors are generally pursuing two key thematics – technology, and the rise of the Asian consumer, and they’re choosing to do that directly into the US or Asian markets.”