Australia’s millennial investors are leading the world in terms of market confidence since the pandemic began, with a new global study from London-based fintech Calastone revealing 81 per cent of Australian investors between the age of 24 and 39 have invested or are considering investing since March.
And while Australian’s are one of the most bullish countries in the pandemic era – with more than half making new investments or considering doing so during the period – older Australian baby boomers (age 66 to 70) are far more cautious, with 100 per cent refraining from making new investments.
The disparity follows a global trend, the study shows, for younger investors to show a much higher risk appetite during the pandemic.
Conducted across the UK, US, Australia, New Zealand, Hong Kong and Germany, the research on investor sentiment and behaviour revealed a clear correlation between age and risk. While millennials have been the most active group globally since March, with 72 per cent having invested or considered doing so, older baby boomers were the most reticent in every region.
In Australia, the UK and Hong Kong, only 25 per cent of older baby boomers have invested or considered doing so, with the figure only marginally higher in other regions.
Australia ranked third overall in terms of investor sentiment and activity since the pandemic started with 55 per cent saying they have invested or considered doing so, behind Hong Kong (58 per cent) and the US (64 per cent). Investors in the UK were next with 51 per cent, ahead of Germany (46 per cent) and New Zealand investors (46 per cent).
The results are consistent with risk demographics for investors, but also reflect a low interest rate environment according to Calastone. Managing director of Australia and New Zealand, Ross Fox, says the findings also reflect a more opportunistic mindset of younger Australians.
“The high level of engagement and consideration among Australian millennials during volatile market conditions shows a maturing and opportunistic investment mindset to capitalise on market dips,” Fox stated.
This has been good news for fund managers, he added.
“Our data similarly indicates that COVID has contributed to a rise in investment activity among investors since the pandemic’s onset, driving a healthy return of flows into managed funds after an intense net outflow in March when markets sharply turned.”