Younger investors with smaller pockets are driving greater influence over the investment technology ecosystem
JERSEY CITY, N.J., July 13, 2022 – DriveWealth, LLC, a global fintech investment rail and pioneer in fractional investing, today released its new DriveTrends study, “The Year of The Millennial Trader: Trading Remained Trendy Despite Market Uncertainty,” a closer look at how the first prolonged bear market that many investors have faced impacted trading behaviors of millions across APAC, EMEA, LATAM, and the U.S. during the first half of 2022. The study analyzes data of more than 12 million investors worldwide who trade fractional shares of U.S. equities through DriveWealth’s network of 100+ global partners, including Block Inc.’s Cash App, Revolut, and Navy Federal Financial Group, among others.
Even amid market lows, data shows trading remained popular among Millennials, a demographic that continues to demand more access to traditional and alternative investment products and tools. The report showcases how Millennials’ increasing demand for innovations like fractional equity trades and diversified portfolios have shaped a new market for digital wallet app users, which is anticipated to exceed 4.4 billion by 2025, according to Juniper Research.
“The ability for providers to offer fractionalized trading has provided a whole new segment of consumers with the opportunity to access wealth creating markets using the smartphones that they already own,” said Harry Temkin, Chief Information Officer at DriveWealth. “Millennials are motivating fintechs and neobanks to innovate their product suite to improve access to U.S. equities and financial literacy tools in underserved markets. Our recent partnerships with companies like Toss Securities, Goalsetter, and Sproutfi are testaments to the amount of power Millennials have to shape the financial ecosystem at large – all they need is an investment button that’s now accessible through the palm of their hand.”
Based on data from the first half of 20221, key takeaways from the report include:
- Millennials represented the largest proportion of new investment account openings worldwide at 46%. While data showed that almost half of Gen-Z investors opened their first account during the March 2020 to August 2021 period, representing a large and growing market share of investors, Gen Z scaled back while Millennials took the lead. This could signal a potential influx of cash into investment platforms that meet their investing needs, as U.S. Millennial wealth has more than doubled from the fourth quarter of 2019 to the end of 2021.
- While ‘meme stocks’ and Reddit comments continued to inspire news headlines, the report shows global investors (especially younger ones) gravitated towards more tried-and-true names to create their portfolios. AAPL, TSLA, and AMZN continue to retain their position in the top three symbols traded worldwide.
- Millennials represented both the highest average trades per account (19) worldwide and the largest proportion of trades in each region. This generation drove:
– 94% of trades in APAC
– 69% of trades in EMEA
– 53% of trades in LATAM
– 53% of trades in the U.S.
- Across the U.S., LATAM, and EMEA, approximately 96% of all activity was driven by fractionalized trades through DriveWealth’s platform. This is a notable increase from the second half of 2020, where fractional trades drove 92% of global activity.
- The top two traded symbols among Millennials in APAC were TQQQ and SQQQ, triple-leveraged ETFs that track a Nasdaq 100 index ETF, QQQ. Known as a high-risk sector, this suggests Millennials in this region are more motivated by riskier investments with the potential for high returns.
“As we dive deeper into the Decade of the Digital Investor, we’re seeing a paradigm shift in investing,” said Gayathri Rajan, Chief Product Officer at DriveWealth. “Despite market uncertainty, people – especially younger investors – are still investing in the brands they love using digital tools that are making the markets accessible and affordable for them. As a pioneer of fractional trading, we’re excited to continue to work with our partners to develop even more ways for investors worldwide to access the markets through our API-based platform.”
To read the full results of “The Year of The Millennial Trader: Trading Remained Trendy Despite Market Uncertainty,” click here. For more information on DriveWealth’s full suite of services, see here.
DriveWealth, a global fintech investment rail and pioneer of fractional equities trading, is a visionary technology company that empowers more than 100 partners around the world to engage their customers by placing the markets in the palm of their hands. We believe the future is fractional, transactional and mobile. Every mobile device should be a gateway to accessing investing and savings products, services, advice, and assistance for global citizens of all ages, wealth stages, and levels of financial expertise. DriveWealth’s consultative support and cloud-based, modern technology platform allow partners to seamlessly offer branded investing experiences to drive customer acquisition, loyalty, retention, and revenue growth. For more information, please visit drivewealth.com or connect with us on Twitter @DriveWealth or on LinkedIn.
1DriveWealth proprietary data. All data has been rounded and reflects approximate figures.
Corey Law, Vested