More influence on the investment technology ecosystem coming from younger investors with smaller budgets.
For many investors, today’s bear market marks their first experience of prolonged uncertainty and turbulence. And a new study offers a snapshot of its impact on the trading behaviours of millions across the world.
The study, titled The Year of The Millennial Trader: Trading Remained Trendy Despite Market Uncertainty, was published by DriveWealth LLC, a global fintech investment rail and pioneer in fractional investing. Through DriveWealth’s network of more than 100 global partners, the research provides insight into the activity of millions across APAC, EMEA, LATAM, and the U.S.
It found that trading remained popular among millennials, who continued to call for greater access to conventional and non-conventional financial tools and products even during market lows.
The research also pointed to millennials' growing appetite for innovations like fractional equity trades and diversified portfolios. That’s laid the groundwork for a new market for users of digital wallet apps, which Juniper Research predicts will surpass 4.4 billion by 2025.
“The ability for providers to offer fractionalized trading has provided a whole new segment of consumers with the opportunity to access wealth creating markets using the smartphones they already own,” said Harry Temkin, Chief Information Officer at DriveWealth.
“Millennials are motivating fintechs and neobanks to innovate their product suite to improve access to U.S. equities and financial literacy tools in underserved markets. Our recent partnerships with companies like Toss Securities, Goalsetter, and Sproutfi are testaments to the amount of power Millennials have to shape the financial ecosystem at large – all they need is an investment button that’s now accessible in the palm of their hand.”
The data showed millennials making up the highest share (46%) of all new account openings globally.
And while news stories inspired by "meme stocks" and Reddit comments persisted in the press, the report indicates that international investors—particularly younger ones—tended to build their portfolios with more tried-and-true stocks. The top three symbols traded globally, in order of popularity, are still AAPL, TSLA, and AMZN.
In all locations sampled, millennials represented both the highest average number of trades per account (19) and the majority of deals. Roughly 96% of all activity in the U.S., LATAM, and EMEA was generated via fractionalized trades on the DriveWealth platform.
Among Millennials in APAC, the top traded symbols were TQQQ and SQQQ, triple-leveraged ETFs that mirror the high-risk Nasdaq 100 index ETF, QQQ, showing that young traders in the region may be drawn to riskier investments with the possibility for significant returns.
“As we dive deeper into the Decade of the Digital Investor, we’re seeing a paradigm shift in investing,” said Gayathri Rajan, Chief Product Officer at DriveWealth. “Despite market uncertainty, people – especially younger investors – are still investing in the brands they love using digital tools that are making markets accessible and affordable for them.”
