Young Investors Driving Interest In International Stocks

New information from nabtrade has revealed that Australian investors are increasingly looking offshore to buy shares, with Gen X and Gen Y leading the charge.

nabtrade figures show that Gen X investors increased their international shares turnover by 91% in the 12 months to 31 January 2017.

Gen Y investors raised their trading volume by 73% in the same period.

By comparison, Baby Boomers saw their international turnover increase by only 50%.

Where are different generations investing their money?

Director of SMSF and Investor Behaviour at nabtrade, Gemma Dale, said that each generation had rather different preferences in international stock.

While Gen Y was keen on tech stocks in innovative fields including Advanced Micro Devices, Nvidia, and Activision Blizzard, Ms Dale said that the big stock picks for Gen X investors were Amazon, Telsa, Microsoft, and Alphabet (formerly known as Google).

“Baby Boomers opted for Apple and Facebook, as well as more established players like Wells Fargo, Lloyds and Berkshire Hathaway,” Ms Dale said.

Ms Dale said that despite these differences in sector preferences, the top two stocks that all generations uniformly sold out of in January were Apple and Tesla.

The tech-heavy investing preferences of the younger generations may reflect their increasingly digitised lifestyles, which would also explain why Baby Boomers, traditionally less involved with new technologies, stayed away from similarly techy stocks.

Ms Dale said that investors tended to go for brands that they were familiar with.

“You look at a Gen Y, and they’re going after Nvidia, they’re going after Activision Blizzard, they’re going after Advanced Micro Devices … so the technology that they use every day,” she told ABC.

“You don’t see a lot of 65-year-olds gaming, you do see a few 23-year-olds and they’ve grown up with it.”

Why young investors may prefer newer stocks

Ms Dale said that Gen X and Y investors may be more open to investing in smaller, riskier companies because they “have longer investment timeframes”.

“This allows them to pursue high growth assets, while Baby Boomers are opting for traditional blue chip names which offer reliable yields and have excellent long-term track records,” she said.

However, when it comes to domestic trading Ms Dale said that all generations were “mostly traditional with their holdings”, favouring trade in the big four banks, Telstra, and the miners over the last 12 months.

The most popular domestic buys by value (12 months to 31/01/2017)

Baby Boomers Gen X Gen Y
National Australia Bank NAB The A2 Milk Company
Telstra CBA NAB
CBA BHP ANZ
ANZ Fortescue Telstra
BHP ANZ BHP
Westpac Crown Bellamy’s Australia
Macquarie Group Telstra CBA
Santos Westpac Origin Energy
Fortescue Rio Tinto Santos
Newcrest Mining Newcrest Mining Fortescue

Source: nabtrade

The most popular international buys by value (12 months to 31/01/2017)

Baby Boomers Gen X Gen Y
Apple Apple Apple
Facebook Facebook Telsa
Direxion Daily Jr Gld Mnrs Bull 3X (ETF) Berkshire Hathaway Facebook
Lloyds Banking Telsa Advanced Micro Devices
Amazon Amazon Berkshire Hathaway
Wells Fargo Microsoft Alphabet
Berkshire Hathaway Lloyds Banking Amazon
Telsa Proshares Ultra Bloomberg Crude Oil ETF Nvidia
Nvidia Us Alphabet Microsoft
Microsoft Barclays Activision Blizzard

Source: nabtrade

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