Generation Z are More Conservative Investors Than You May Think - Data from Financial Platforms Moomoo and Futubull Shows

The parent company of digital brokerage and wealth management platform moomoo, Futu Holdings Limited (Nasdaq: FUTU; “Futu”) which serves nearly 20 million users, including more than three million clients, has released a whitepaper on investor behavior and trends emerging within the unique market conditions experienced throughout 2022.

In response to heightened market volatility as a result of rising inflation pressures, constrained monetary policies, lingering concerns of coronavirus variants and geopolitical tensions, statistical research by Futu concluded that:

The data showed a different appetite for risk among the three generations*.

Gen X group as the oldest generation, were the greatest risk-seekers as their stock position remained the highest among all three generations. Furthermore, their investing patterns slightly changed, with only 2.8% decrease in stock investment value to 89.4% on June 15, 2022, compared to December 31, 2021.

Counterintuitively, Gen Z group were the most risk-averse investors, and their equities investments significantly declined (-8.6%), from 85.3% on December 31, 2021, to 76.7% on June 15, 2022.

In aggregate, Gen Z investors allocated 14.9% and 7.7% of their positions to funds and bonds respectively, the highest level among all three generations. Gen X investors had only 8.4% and 1.8% of their positions to funds and bonds, respectively, the lowest of all three generations.

Male and female investors* show similar investing patterns, with investments comprise mainly stocks (85%-92%), followed by funds.

Female HK investors tended to allocate more bonds into their portfolios As at June 15, 2022, 5% of female HK clients’ investments are composed of bonds, which is 1.6% higher than male HK clients.

HK and SG female investors executed more options during H1 2022. The daily amount of stock options executed by HK and SG female investors increased 11% and 21% respectively, compared to H2 2021.

Compared to the level at the end of 2021, investors from Hong Kong SAR, Singapore and US markets all recorded a decline in stock weighting, dropping 4.3%, 4.4% and 3% in HK, US and SG, respectively.

US investors opted to diversify their portfolios with fund products, with the proportion of fund value climbing to 13.2% in June 2022 from 8.8% in December 2021.

In terms of trading frequency, US investors traded 0.43 times per trading day, comparing to HK investors who traded 1 time per day and SG investors trading 0.35 times per day.

US investors’ average daily trading frequency jumped to 0.43 times in H1 2022, representing an increase of 26.5% from H2 2021’s 0.34 times. Investors from HK and SG executed 20.5% and 52.2% more trades in H1 2022 than H2 2021, respectively.

When conducting this research, Futu compared the statistical summary of investment values as of December 31, 2021 to that of June 15, 2022, with data collected from investors across three different regions, including Hong Kong SAR (“HK”), US and Singapore (“SG”), who are using Futu’s two flagship investing apps - moomoo and Futubull.

We then calculated investors’ average trading frequency per trading day with the data extracted from the second half of 2021 (July 1, 2021 to December 31, 2021, or “H2 2021”) and first half of 2022 (January 1, 2022 to June 15, 2022, or “H1 2022”), across investors from HK, US and SG.

We also compared investors’ investment value and trading frequency by generation* and gender*.

*Generation - Generation X (born in or before 1980), Generation Y (born between 1981 and 1996) and Generation Z (born in or after 1997)

The information and conclusion contained in this report are for general informational purposes only. Although the information contained in this report is obtained from sources believed to be reliable and compliant under the premise of protecting customer privacy and ensuring data compliance, Futu Holdings Limited does not guarantee the timeliness, completeness, or accuracy of such information, opinion, or data for any particular purpose. The information, opinions, and data published in this report may no longer be accurate or reliable due to changes in circumstances or other factors after publication, and the publisher makes no commitment to remove obsolete information from the report and to change or update relevant information without notice.

The investor behavior and trading data analyzed in this report were obtained from the Futu platform and its licensed subsidiaries, and the samples included the anonymized data of registered users, account holders, and clients with assets of Futu. Nothing contained herein constitutes financial, legal, tax, investment advice, or other advice, or should be relied on as such. All consequences or losses caused by direct or indirect use of the information and content involved in this report or investment accordingly are users’ sole responsibility. Futu Holdings Limited assumes no legal liability.

Futu Holdings Limited does not accept any liability arising from this material or for any direct, indirect, incidental, specific or consequential loss and/or damage suffered by the recipient of this material or any other person from the use of or reliance on the information set out in this material. The copyright of this report belongs to Futu Holdings Limited and relevant content providers. Without prior written consent of Futu Holdings Limited, no part of this report should be modified, reproduced, distributed, replicated, reprinted, published, licensed, or copied.