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Gen X and Gen Y share investors are looking offshore to buy into the high-tech brands that increasingly dominate their lives.
Key points:
- Investors have increased overseas share turnover by between 50 and 91 per cent
- Gen Y is more inclined towards smaller, speculative companies than older cohorts
- Apple is the most popular overseas stock
A study by nabtrade, the online stockbroking arm of NAB, has found Gen X investors lifted their turnover in international shares by 91 per cent over the past year, while Gen Y's overseas buying and selling rose 73 per cent.
Baby boomers also increased their overseas trading by 50 per cent, and still remain the biggest and most active share investors, reflecting their higher average wealth than younger people.
Perhaps reflecting their smaller investment sizes and longer timeframe for returns, Gen Y showed a propensity for smaller, potentially higher-risk companies than their older counterparts.
Domestically, this was reflected in A2 Milk being the biggest investment destination for nabtrade's Gen Y customers over the past year, with Bellamy's also in the top 10.
"Which is quite astonishing when you consider the other blue chips that were in that group," said Gemma Dale, the head of investor behaviour for nabtrade.
Top 10 domestic buys by value
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 |
For the 12 months to 31/1/2017. Source: nabtrade
Overseas, the United States was by far the most popular destination for share investment.
The most popular company to buy into for all age groups was Apple, perhaps in part reflecting a boost the company got when renowned investor Warren Buffett's Berkshire Hathaway took a billion-dollar stake in it early last year.
Facebook also made the top three buys for all three age groups.
However, Gen Y's top ten was a little more adventurous than their older counterparts, featuring chip maker Advanced Micro Devices (AMD) and gaming studio Activision Blizzard.
Google owner Alphabet and graphics processor maker Nvidia also featured high up on the list of overseas investments for young people.
Top 10 international buys by value
Baby Boomers |
Gen X |
Gen Y |
|---|---|---|
| Apple | Apple | Apple |
| Tesla | ||
| Direxion Daily Jr Gld Mnrs Bull 3X (ETF) | Berkshire Hathaway | |
| Lloyds Banking | Tesla | Advanced Micro Devices |
| Amazon | Amazon | Berkshire Hathaway |
| Wells Fargo | Microsoft | Alphabet |
| Berkshire Hathaway | Lloyds Banking | Amazon |
| Tesla | Proshares Ultra Bloomberg Crude Oil ETF | Nvidia |
| Nvidia | Us Alphabet | Microsoft |
| Microsoft | Barclays | Activision Blizzard |
For the 12 months to 31/1/2017. Source: nabtrade
"Irrespective of the generation, they're going for big brands," observed Ms Dale.
"But the brands they're familiar with are dramatically different.
"So we see baby boomers going for Apple and Facebook, absolutely, but [also] Wells Fargo, for Lloyds, and they love Berkshire Hathaway 'cause they're very familiar with the Warren Buffett story.
"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 everyday.
"You don't see a lot of 65-year-olds gaming, you do see a few 25-year-olds and they've grown up with it."
Ms Dale said people did seem to prefer investor in companies that provided products and services they used and understood.
"They can read, we assume, relatively well the appetite and demand for it among the cohort who should be buying it," she said.
"Even thought the amounts were quite small we saw a lot of interest in Snapchat when it went to market from people who use Snapchat everyday."
Topics: stockmarket, markets, consumer-finance, business-economics-and-finance, australia, united-states