• ETFs are in for 2025, with 25% of Gen Z’s investments in ETFs
• At least 40% of Gen Z and 34% of Millennials have invested in at least one ETF
• Four of the top five most popular investments for Gen Z/Millennials were ETFs

New nabtrade data reveals Gen Z and Millennial investors are actively engaging in the ‘buy the dip’ strategy using Exchange-Traded Funds (ETFs).

The data also shows that not only are younger investors committed to long-term wealth creation, but on days when the market falls heavily and volatility spikes, ETF trades soar and so does the number of younger investors jumping in to buy.

Key data insights:

• There’s a jump of 56% in ETF trades by Millennials and 44% for Gen Z on days when the market falls by more than 1% and volatility rises.
• The number doing the buying also jumps by 45% for Millennials and 49% for Gen Z.
• ASX200 and the S&P500 ETFs account for more than 80% of buying and holdings, suggesting young investors understand the value of diversification and basic index investing.

NAB Director, SMSF and Investor Behaviour, Gemma Dale, said this trend indicates a sophisticated approach to investing, where younger investors are using ETFs to strategically enhance their returns.

“ETFs are generally viewed as a ‘set and forget’ investment option, offering consistent returns compared to individual stock picking,” Ms Dale said.

“However, by deliberately buying the dip on a regular basis, these young investors can significantly boost their returns, especially in a low volatility environment like we’ve seen for much of 2024.”

“Older investors, on the other hand, typically manage existing direct share portfolios and adjust at the margins. For instance, they might trim their holdings in banks, which are currently viewed as expensive, and buy into BHP.”

The analysis highlights a substantial shift in trading behaviour, with younger investors actively engaging with the market and capitalising on down days to enhance their investment strategies.

“The size of the jump in trades on down days is particularly noteworthy, as it is not common to see a 50% increase in any trading activity on a daily basis – this usually occurs with big stock moves,” Ms Dale said.

This trend underscores the evolving landscape of investment strategies among different generations, with Millennials and Gen Z’s proving that investing doesn’t have to be boring.

Notes to editors:

• Estimates taken from nabtrade Data from October 2023 to October 2024