Australia’s Gen X and Gen Y investors are leading the charge to buy international stocks, investing in high growth sectors such as video gaming and semi-conductors, compared to Baby Boomer investors who have larger exposures to the Australian sharemarket.
Figures compiled by nabtrade on trading patterns across the generations showed that Gen X investors lifted their international turnover by 91 per cent, and Gen Y by 73 per cent in the 12 months to 31 January 2017.
Baby Boomers are also increasingly looking to invest offshore, with their international turnover increasing 50 per cent.
Gemma Dale, nabtrade Director of SMSF and Investor Behaviour, said International stock preferences also varied across generations, with Gen Y preferring to invest in technology stocks in innovative fields such as Advanced Micro Devices, Nvidia and Activision Blizzard.
“The big stock picks for Gen X investors were Amazon, Tesla, Microsoft and Alphabet, while Baby Boomers opted for Apple and Facebook, as well as more established players like Wells Fargo, Lloyds and Berkshire Hathaway,” Ms Dale said.
“Interestingly, Apple and Tesla were the top two stocks that all of the generations sold out of in the month of January.
“Generally, younger generations have longer investment timeframes, which allows them to pursue high growth assets, while Baby Boomers are opting for traditional blue chips names which offer reliable yields and have excellent long term track records.”
The strong yields and franking credits offered by financials in the domestic market, as well as the recent strong performance of the resources sector, have continued to prove irresistible to investors, with resources returning 28 per cent in the twelve months to 31 January.
“Investors across all the generations were mostly traditional with their holdings in the domestic market, with heavy trading in the big four banks, Telstra and the miners over the last twelve months,’’ Ms Dale said.
The top ten holdings for Gen Y investors were A2 Milk, NAB, ANZ, Telstra, BHP and Bellamy’s Australia. Among Baby Boomers, it was NAB, ANZ, CBA, BHP and Telstra, while Generation X had mix of mostly bank and resource stocks – namely NAB, BHP, CBA, Fortescue Metals, ANZ and Rio Tinto.
“In the final month of January, there was a big shift in portfolio holdings among younger investors, who moved in on stocks such as Bubs Australia, Fortescue Metals’ Liquefied Natural Gas, Atlas Iron and The A2 Milk Company,’’ Ms Dale said.
Ms Dale also noted that Baby Boomers remained the biggest investors, with 30 per cent more trades than Gen X, and twice as many as Gen Y in the twelve months to 31 January.
“They also buy and sell more than double the average Gen Y trade, although Gen X and Baby Boomers are very similar in terms of their trade numbers,’’ she said.
Top 10 domestic BUYs by value during 12 months to 31 January 2017
|National Australia Bank||NAB||The A2 Milk Company|
|Newcrest Mining||Newcrest Mining||Fortescue|
Top 10 international BUYs by value during 12 months to 31 January 2017
|Direxion Daily Jr Gld Mnrs Bull 3X (ETF)||Berkshire Hathaway|
|Lloyds Banking||Tesla||AdvancedMicro Devices|
|Berkshire Hathaway||Lloyds Banking||Amazon|
|Tesla||Proshares Ultra Bloomberg Crude Oil EFT||Nvidia|
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