Young people are driving the ETF market. Yes, despite the fact that Italians under 35 have the lowest incomes and asset values since 2006 (-8% in 15 years), they are the most inclined to save with a clear goal: to think about their future right away. ETFs represent 74% of the investment mix made by under 34s, compared to 59% of those over 55 (analysis by Scalable Capital, a digital investment platform with over a million clients, a leader in Europe, founded in 2014 with the goal of democratizing access to finance). If 5.1% of Italians invest in ETFs, the percentage rises to 14.9% in the 25-34 age group.
In Europe, assets managed with ETFs grew by 16% and reached approximately 1.7 trillion euros, 105.7 billion in Italy (+2%). And Italians, both young and mature, make extensive use of these instruments. They are the largest part of investment portfolios, which are increasingly diversified. For the 18/34 age group, ETFs are in first place (74%), followed by individual shares (23%) and other products (3%). For those over 55, preferences are the same, but with different percentages: ETFs (59%), individual shares (36%) and other products (5%). “The choices, even if between two generations so far apart in time and investment capacity, are not very different, confirming a great awareness on the part of young people. The priority for both clusters is the preservation of capital in order to protect themselves from inflation. The younger ones obviously have a longer-term physiological perspective in which to grow their assets”, explains Alessandro Saldutti, Country Manager of Scalable Capital Italia.
The first difference between the two generations is that the under 34s definitely arrived much earlier than their predecessors at the choice to invest and above all they do it independently and even with small sums (once inconceivable for financial activities). The preferred channels are digital ones, compared to relying on financial advisors as the over 55s have done and do, who often consider digital platforms as a means parallel to the more traditional one. Looking at the choices, the gap between the two generations narrows: among the 10 most requested ETFs, five are common to both clusters. Artificial intelligence first and foremost. However, GenZ is further away from the raw materials sector (such as gold) and has a great focus on sustainability. For them, the most popular thematic ETFs are funds in the clean energy and climate change sectors. Scalable Capital estimates that 30% of its young clients choose to invest in ESG ETFs, with a view to supporting companies and projects oriented towards sustainability: And in 2023, sustainable funds recorded an average return of 12.6% compared to 8.6% for traditional funds.
Investors between 25 and 34 are at the top of the savings rankings: the ratio of savings plans between the different age groups is 42% for young people under 35 and only 32% for those over 55. The youngest (18-24 years) have increased their savings quota by 4.5 times in the last two years. And the ones driving the ETFs are therefore those under 34. If 5.1% of Italians invest in this way, the percentage rises to 14.9% in the 25-34 age group. And in Germany (to look at other European countries) it reaches 42%.
More young people saving and investing. Fashion? “Until recently, investments were a matter for the wealthier classes. Access to this type of activity required significant financial availability and a high level of financial literacy, necessary to limit the numerous prejudices on the functioning of the markets and their risks,” explains Saldutti. But technology and concern for the future have accelerated a process of democratization of investment. Risks? It seems that young people are more careful. “The adoption of a long-term vision with investment plans and the diversification of portfolios through investment in ETFs are two signs that young people invest with a cool head and that their profile is far from that of online gambling enthusiasts. This shows how investors who consider themselves inexperienced are also less inclined to take risks,” concludes the Country Manager of Scalable Capital Italia.
