In Focus: Megatrends  

Gen Z investors back passives

Gen Z investors back passives
 

Young adults aged between 18-29 bought mainly passive funds last month, with Fidelity Index World being the top investment.

Gen Z investors using Hargreaves Lansdown's investment platform focussed on funds in the US market alongside broad-based global equity funds.

Of the top five investments seen in stocks and shares Isas, Lifetime Isas and self-invested person pensions, only two actively managed funds appeared, and both have a growth bias.

Top investments by net buy (£) for those aged 18-29 in the period April 5-28

Stocks & Shares Isa

Lifetime Isa

Sipp

Fidelity Index World

Fidelity Index World

Bank Of Ireland

Fundsmith Equity

Fundsmith Equity

Fidelity Index World

Legal & General International Index Trust

Legal & General International Index Trust

Legal & General International Index Trust

Legal & General US Index

Legal & General US Index

Scottish Mortgage Investment Trust plc Ordinary Shares 5p

Rolls Royce Holdings Plc

UBS S&P 500 Index

Vanguard LifeStrategy 100% Equity

 Source: Hargreaves Lansdown

Emma Wall, head of investment analysis and research at Hargreaves Lansdown said it is great to see young adult investors taking advantage of their tax wrappers so early in the new tax year. 

“It has been a difficult start to the 2022/23 tax year, with significant market volatility caused by geo-political uncertainty and rising inflation – and corresponding central bank policy. 

“Yet if you are investing for the long-term, as those in the cohort are, particularly in a Lisa or Sipp wrapper, then it is the right thing to do to look through the headwinds to multi-decade growth opportunities.”

Wall added that, with a potential investment horizon of half a century in the case of a personal pension, inflation’s impacts, however painful in the present, are transitory and a broad-based competitively priced passive fund can be a great option. 

“A global equity tracker will offer geographical diversification with a bias to the economic giants of the globe.”

sally.hickey@ft.com