Gen Z is most risk-averse generation, according to Futu whitepaper

Rick Steves

Gen Z investors (born in or after 1997) are the most risk-averse investors while Gen X (born in or before 1980) are the biggest risk-takers, according to data collected by moomoo and Futubull, both entities owned by digital brokerage group Futu Holdings. 

The survey also found that female investors’ investments are more diversified in 2022 and investors increased daily trading frequency but decreased the weighting of stocks in the first 6 months of 2022.

Futu collected data 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.

Gen X are oldest and greatest risk-seekers

The whitepaper on investor behavior and trends shows that there is a different appetite for risk among the three generations, with the Gen X group being the oldest generation and the greatest risk-seekers as their stock position remained the highest among all three generations.

Gen X’s investing patterns slightly changed, with only a 2.8% decrease in stock investment value to 89.4% on June 15, 2022, compared to December 31, 2021.

Gen X investors had only 8.4% and 1.8% of their positions to funds and bonds, respectively, the lowest of all three generations.

Gen Z are the most risk-averse investors

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

The youngest generation allocated 14.9% and 7.7% of their positions to funds and bonds respectively, the highest level among all three generations.

Generation Y (born between 1981 and 1996) was found to be in the middle ground between the risk taker generation Gen X and the risk averse generation Gen Z.

Similar investing patterns by gender

As to gender, male and female investors show similar investing patterns, with investments comprising mainly stocks (85%-92%), followed by funds, the research found.

Hong Kong-based female users tend to allocate more bonds into their portfolios (5% of female HK clients’ investments are composed of bonds, which is 1.6% higher than male HK clients).

Hong Kong and Singapore-based female investors executed more options during H1 2022, with the daily amount of stock options executed by HK and SG female investors increasing 11% and 21% respectively, compared to H2 2021.

HK investors trade the most per day

Futu also mentioned investors’ increased daily trading frequency while decreasing weighting of stocks in the first half of 2022.

Investors from Hong Kong, Singapore, and US markets all recorded a decline in stock weighting, dropping 4.3%, 4.4% and 3% in HK, US and SG, respectively, the report stated, adding that 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.

US investors traded 0.43 times per trading day, compared 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.

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