We analysed the investing activity of our Millennial customers (estimated as those born between 1980 – 2000) and what they have invested in over the course of 2016. Our investment research analyst Graham Spooner, reviews the companies popular with Millennials which interestingly swing towards the Alternative Investment Market (AIM).
- More than a third of trades made by those aged 18-36 in 2016 are in AIM stocks demonstrating an appetite for higher risk
- Millennials indicate a bias towards equities as 94% of trades made by those fell in to this investment category
- AIM companies proving particularly popular with the age group include those that are more interesting due to an increased level of volatility
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.
2016 has been a year of change and investors have had a lot to contend with in order to protect and enhance their investments. This uncertainty however, seems to have been ignored as interestingly a third of trades made by Millennials so far this year have been in AIM stocks indicating an increased and more relaxed attitude to risk. Moreover, 94% of trades made by 18-36 year olds have been in equities which backs up the perception that younger people are prepared for greater risk and are happier to back their judgement on an individual share rather than go into a managed fund, which can be perceived as a little dull.
On the premise that the majority of Millennials will be at the beginning of their investing journey, it is unsurprising that the top five traded AIM shares for the age group so far this year are companies that they will probably have some interest in.
The top three traded AIM stocks are a mixture of oil and mining companies and come in the shape of:
These companies are actively traded in at The Share Centre across all age groups, and have been so for a long period of time. The ongoing volatility that surrounds these two sectors means Millennials could be viewing them as exciting investments. Furthermore, this volatility has been, and will continue to be, well documented online and on social media channels and there’s no denying the popularity and dependence that younger people have on such forms of communication.
Another AIM stock that proved popular with Millennials is online retailer BOOHOO. Its existence in the top traded list could be down to the visibility of the Manchester based company’s TV adverts, which sponsor a number of programmes on popular young people’s channel MTV. What's more, the company quotes itself as being one of the UK’s fastest growing and prominent internet retailers.
Millennials are driving changes throughout a number of industries, and given their love and exposure to technology, it is unsurprising to see digital health and personal monitoring company Cloudtag feature as the fifth popular AIM share.
It’s encouraging to see that Millennials are not deterred by the economic uncertainty we’ve experienced in 2016. AIM shares certainly provide that level of risk and excitement that younger investors may need to wet their appetite for investing.
It will be interesting to see whether this trend continues in 2017, particularly if the government go ahead with the launch of their new Lifetime ISA product, of which Millennials are likely to be key beneficiaries.