There has been a 39 per cent increase in the amount of trades made by those aged 18-36 in their ISAs compared to the same period last year, indicating millennials are getting savvier and showing more of a willingness to invest.
Not only is this confidence in ability demonstrated by the number of trades, but also by the amount of money being invested, with inflows jumping by 57 per cent year on year as millennials look to take advantage of the tax free benefits of an ISA product.
In terms of what’s being invested into, the data suggests there is very much an overarching theme of Premier League stocks vs. Non-League stocks, with millennials either opting for relatively safe FTSE 100 big blue chips such as GlaxoSmithKline, BT and Vodafone or in quite the contrast much smaller, higher risk punts such as miners Centamin and Kodal Minerals as well as oil and gas companies Ascent Resources and 88 Energy.
The findings get even more interesting when you look at the male millennial vs female millennial split. Whilst the numbers show that male millennials are without doubt more active, female millennials seem to be making confident strides as the number of trades made by the latter increased by 20 per cent year on year.
Interestingly, the top ten traded companies across both genders so far this year are a 60/40 split, favouring the smaller companies and demonstrating an increased appetite for higher risk. Male millennials are tending to opt for companies with a weighting towards the mining and commodities sector. Meanwhile female millennial investors are favouring diversification, opting for a range of smaller companies including the likes of gold miner Centamin, Card Factory and metal developer Premier African Minerals.
Commenting on the findings Graham Spooner, investment research analyst at The Share Centre said: “According to a number of demographers and researchers, Millennials or Generation Y are defined as those born between the early 1980s and the early 2000s, making the group currently aged between 16-36. When examining the investing activity of those that fall into this cohort, our focus obviously shifts slightly to 18-36 year olds.
“The data analysed indicates that there seems to be no middle ground for millennials and generally, as a group they are becoming more adventurous with their spending, perhaps indicating the adage of their generation, ‘you only live once’ is coming through to their investing portfolios. Millennials are investing in well-known, recognisable and income generating FTSE 100 companies and then going straight to the other end of the spectrum and punting on much more extreme smaller and higher risk companies.
“As is life, millennials will one day be considered ‘middle-aged’ and may perhaps begin to question whether this strategy will continue to pay off. When thinking about their future, and of course if they decide to move towards a more balanced portfolio, I would suggest that mid-cap companies could be the answer. As the blue chips of the future, mid-caps could provide millennials not only with growth potential but the element of risk that they are clearly craving, without going to the extremes.
“It will be interesting to see whether those aged 18-36 continue this way of investing when we look back at the ISA Millennial Monitor towards the end of the tax year.”