Younger investors leaning towards ETFs

Younger Australians, both advised and non-advised, were more open to investing in passive, index-tracking exchange traded funds (ETFs) than older generations, who showed greater interest in selecting their own individual stocks, according to a review of a cohort of data from wholesale trading platform AUSIEX.

Importantly, the firm noted, the data only looked at top buys split by generation, not their overall holdings.

While the trend towards investing in ETFs held true for younger investors across both the advised and non-advised cohorts, there were still considerable differences in their specific investments.

Among advised clients, BHP and Woodside were the top two stocks bought by Baby Boomers, Gen X, and Millennials, while Gen Z diverged significantly with the Vanguard Diversified High Growth Index ETF and Vanguard Australian Shares Index ETF taking the top two slots.

Millennials were the only other advised cohort to have ETFs in their top five, with the Vanguard MSCI Index Inter Shares and Vanguard Australian Shares Index ETF making an appearance.

Non-advised Boomers, Xers and Millennials in 2024 also bought BHP and Woodside, which was contrasted with non-advised Gen Z also looking towards ETFs, such as iShares’ S&P 500 AUD ETF and Vanguard Australian Shares Index ETF.

Again, non-advised Millennials also had an ETF in the top five, with this group again looking to the Vanguard Australian Shares Index ETF.

While these were the most bought listed investments last year, investors across the generations continued to hold a wide range of stocks (not buy or sell) such as CBA, NAB, ANZ and Westpac among others, AUSIEX added.