Millennial Investors Take Confident Approach to Risk

As the new tax year kicks off, millennial investors (18-34 yearolds) are more optimistic than any other investor group, according to new research from Investec Click & Invest. The research¹ which polled investors with at least £10k invested reveals 76% of 18-34 yearolds are positive about their portfolios.  In addition, millennials have a greater appetite for risk with more 18-34 year old investors willing to accept a higher level of risk to maximise returns over the long term (21%) than other investor types.

In planning their financial futures, the younger generation is taking a confident approach with 75% of millennial investors likely to increase the amount they invest this year (in comparison to 54%) on average.  While younger investors are also planning on capitalising on their tax-free allowance, a third (33%) were planning to invest the full tax-free allowance at the beginning of this tax year (2018/2019) while an additional 33% will wait until the end of the tax year to invest a lump sum.

Investing goals

When it comes to investor goals, millennials are taking a long term view; a third (35%) are aiming to achieve better returns than cash while 36% are investing to boost their retirement income.  For a third (31%) of 18-34 yearolds, they want to be more in control of their savings pot and 21% believe that they can achieve better returns than their company pension.

Potential returns

In searching for positive returns in 2018 and considering different asset classes, one in six (18%) 18-34 year old investors believe multi-asset and fixed income will deliver the biggest growth opportunities, closely followed by cash and equities (both 17%) and real estate (13%). In considering the regions that will deliver returns, overwhelmingly millennial investors believe the UK presents the best opportunities (50%), and emerging markets are also in favour for one in six younger investors.

 A quarter (26%) of millennial investors believe that economic volatility will have the biggest impact on their portfolios this year, while a fifth (19%) believe stock market volatility will affect them the most.  Achieving returns in the low rate environment is a concern for 15% of 18-34 year old investors and 14% believe geopolitical impact on markets will have the most impact.

Jane Warren, CEO, Investec Click & Invest comments: “Taking the plunge to invest takes confidence and it is really encouraging that millennials are not only investing but have a positive outlook for the year ahead.  While younger generations arguably can take on more risk this isn’t always the case and it’s fantastic that they are doing everything they can to boost their savings.

“However, our research has found that for those millennials that don’t invest, knowledge is the biggest barrier and as an industry we need to do more to educate those people that could and should be investing   At Click & Invest, we are passionate about empowering people to make these decisions and to begin improving their financial futures.”

As the new tax year kicks off, millennial investors (18-34 yearolds) are more optimistic than any other investor group, according to new research from Investec Click & Invest. The research¹ which polled investors with at least £10k invested reveals 76% of 18-34 yearolds are positive about their portfolios.  In addition, millennials have a greater appetite for risk with more 18-34 year old investors willing to accept a higher level of risk to maximise returns over the long term (21%) than other investor types.

In planning their financial futures, the younger generation is taking a confident approach with 75% of millennial investors likely to increase the amount they invest this year (in comparison to 54%) on average.  While younger investors are also planning on capitalising on their tax-free allowance, a third (33%) were planning to invest the full tax-free allowance at the beginning of this tax year (2018/2019) while an additional 33% will wait until the end of the tax year to invest a lump sum.

Investing goals

When it comes to investor goals, millennials are taking a long term view; a third (35%) are aiming to achieve better returns than cash while 36% are investing to boost their retirement income.  For a third (31%) of 18-34 yearolds, they want to be more in control of their savings pot and 21% believe that they can achieve better returns than their company pension.

Potential returns

In searching for positive returns in 2018 and considering different asset classes, one in six (18%) 18-34 year old investors believe multi-asset and fixed income will deliver the biggest growth opportunities, closely followed by cash and equities (both 17%) and real estate (13%). In considering the regions that will deliver returns, overwhelmingly millennial investors believe the UK presents the best opportunities (50%), and emerging markets are also in favour for one in six younger investors.

 A quarter (26%) of millennial investors believe that economic volatility will have the biggest impact on their portfolios this year, while a fifth (19%) believe stock market volatility will affect them the most.  Achieving returns in the low rate environment is a concern for 15% of 18-34 year old investors and 14% believe geopolitical impact on markets will have the most impact.

Jane Warren, CEO, Investec Click & Invest comments: “Taking the plunge to invest takes confidence and it is really encouraging that millennials are not only investing but have a positive outlook for the year ahead.  While younger generations arguably can take on more risk this isn’t always the case and it’s fantastic that they are doing everything they can to boost their savings.

“However, our research has found that for those millennials that don’t invest, knowledge is the biggest barrier and as an industry we need to do more to educate those people that could and should be investing   At Click & Invest, we are passionate about empowering people to make these decisions and to begin improving their financial futures.”