Investors capitalise on market volatility with millennials leading the charge
Investors have remained bullish on markets despite the pandemic and millennials are leading the charge.
More than half of global investors are positive about the market and are looking to invest in the near future, even in the face of the coronavirus-induced volatility.
A survey by global funds network Calastone found 54 per cent of investors are bullish in their outlook, while 31 per cent of UK investors were looking to invest in order to capitalise on market volatility.
It comes after Calastone data showed investors cashing in on the stock market rally, with outflows from UK equity funds hitting an all time high in June.
Investors bought into the equity markets at a net £3.9bn between April and the first week of May. In June they sold a net £1.2bn, banking profits they have made on the market rebound.
The correlation between the age of investors and their risk appetite is particularly notable. While 46 per cent of millennial investors in the UK have actively made new investments in light of the pandemic, only between seven and 17 per cent of the older generation have done so.
The trend is even more marked in other countries, notably in the US where 59 per cent have already actively made new investments.
Andrew Tomlinson, Calastone’s chief market officer said: “It’s encouraging to see renewed optimism in the markets, and the charge being led by younger, next generation investors.”
“Record low to negative interest rates have been compounded by the ongoing market volatility caused by COVID, making it an increasingly difficult environment for savers. Our research shows that young investors are awake to the need to invest and put their cash to work.”
The increased risk appetite among millennial investors may present an opportunity for more ethical investing. A recent UBS survey showed investment priorities differed drastically between generations. Three quarters of younger investors said they were interested in sustainable investing, compared to just a quarter of older investors.
“With millennial investment activity undeterred by COVID-led volatility, asset managers have a significant opportunity to cater to this increasingly important demographic, whether that be through expanding their digital capabilities or focussing on new investment strategies, such as ESG,” said Tomlinson.