According to the Pew Research Center, this year, millennials are projected to overtake Baby Boomers in population as their numbers grow to 73 million and Boomers decline to 72 million. That means millennials’ evolving interests and values will shape a new wealth management industry. So what stocks are millennial investors interested in buying?
Apex Clearing decided to zero in on this question, and came out with a report that showcases an analysis of the top 100 stocks owned by a subset of millennials as of June 30, 2019. The most surprising trend: Chinese companies are leading the pack.
“There’s 13 Chinese companies amongst that top 100 stocks that are held, which I found pretty surprising,” Apex Clearing CEO Bill Capuzzi told YFi AM. “And I think it plays into the Peter Lynch comment years ago, which is ‘invest in what you know.’ I think from a millennial perspective, a little bit different take on that which is really, ‘invest in what you believe in.’”
Despite the ongoing uncertainty around the outlook for U.S.-China trade relations, millennials remain bullish about Chinese companies, such as: Alibaba Group (No. 5), TAL Education (No. 15), JD.Com (No. 21), Baidu (No. 53), and Tencent Holdings (No. 54).
“It’s going to be interesting to see, as we do this over the next quarter, over the next 6 months, given the turmoil with the trade wars, whether or not that’s going to continue,” Capuzzi notes.
Apex Clearing notes that millennials consider themselves to be global citizens, and choose to take the long view on international investments.
“People are looking for opportunities,” notes Capuzzi. “Millennials are savvy investors, and the returns on a number of Chinese companies have been very good over the last 6 months. Something like an Alibaba, Tencent, Baidu — there’s been decent returns in those stocks and people are looking for yield. And they’re looking outside of just the U.S. to generate returns in their portfolio.”
Other key takeaways
Analyzing more than 658,000 investment accounts owned by people with an average age of 30 years and 10 months, the Apex Millennial 100 list found other trends poised to have major implications for how, when, and why financial services are consumed in the future.
Cannabis is playing a more important role when it comes to the medicinal and lifestyle decisions of millennial investors, given an increased focus on Canadian cannabis companies such as Aurora (No. 45) and Canopy (No. 48).
Millennials consistently show support for companies that mirror their personal ideologies and offer products and services they understand, use and value — specifically supporting these companies when they go public as represented by Uber (No. 38), Lyft (No. 85), Beyond Meat (No. 62,) and Slack (No. 69).