Autumn 2020: the funds gaining and losing their Elite Ratings
Following FundCalibre’s Autumn investment committee, a total of ten funds have gained an Elite...
Millennials and Generation Z are serial job hoppers. As we discovered last year, those aged 25-34 have already had an average of six different roles so far in their professional careers*. However, those stats were pre the global pandemic, furloughs and lay-offs. With Covid-19 resulting in what the IMF has coined ‘The Great Lockdown’ and biggest recession of our lifetime, millennials may today be more appreciative of job stability. I, for one, am extremely thankful and completely blown away that I’ve now been working for FundCalibre and writing this millennial series for over 2 years! There have been a lot of surprises in 2020 and the continued success of my ramblings are one of them.
‘Research is formalised curiosity. It’s poking and prying with a purpose.’ — Zora Neale Hurston, author and anthropologist
Last year, when my column turned one, I had a lot of questions about what millennials had been reading. What were their interests? Where were they investing? This year, I wanted to see how – or if – the pandemic has changed their habits on FundCalibre. Did they become more or less interested and engaged with investing? Did it change which topics they were interested in or even which funds they viewed? This meant diving into our website analytics to compare the 6 months prior to lockdown with the 6 months after (defined as 1 Oct 2019 – 31 March 2020 and 1 April 2020 – 30 September 2020, respectfully).
Pre-Covid millennials accounted for 22%^ of FundCalibre’s users. Post-Covid, the number increased slightly to 25%^^, but on average, each millennial spent longer on the website (6% increase) and looked at more pages (a 57% increase). This trend was universal across age and gender. With more time at home, it’s probably not surprising we spent more time online.
Looking more closely at the data, one trend that immediately stood out was that in the pre-Covid data, millennials focused on individual articles. For example, ‘Why Brexit could be good for bonds’ and ‘Should you invest when stock markets fall?’. Within the top 15 pages viewed, fund research only featured once: people looking for global funds. In fact, even if you expanded it to the top 50, you’d only add two more sectors to the mix: global equities and global equity income, specifically. Conversely, in the last 6 months, corporate bonds, European equities, strategic bonds, Japanese funds and global equity funds have all featured in the top 15. Actually, 30% of the top 50 pages viewed by millennials relate directly to fund research^^.
In early 2019 when I looked at the best and worst of millennial behaviour, one conclusion was that millennials seem to do their research to a point: they read the articles but when it comes to fund research they lag. However, since lockdown, fund research by millennials has increased by 122%. The added research also changed which funds were the most popular. In the last 6 months, Invesco Monthly Income Plus, Baillie Gifford Global Discovery and Rathbone Global Opportunities have proved the most popular^^. The previous period saw the City of London investment trust firmly as number one, followed by AXA Framlington Global Technology and TM home investor^.
The articles which millennials focused on also changed. Pre-Covid topical articles such as ’70 years of credit cards’ and ‘The Brexit Beer Index’ were popular, but in the top 20 there were no ‘learn to invest’ articles. Post-Covid, articles explaining the different types of inflation, building a portfolio with investments and understanding ISA investment basics all feature high on the list of those most popular.
When I started doing this deep dive I expected to see a change of behaviour, but I didn’t expect fund research to feature so prominently. With so many day-to-day habits changing and a lot of uncertainty it’s almost comforting (if that’s the word for it) to see millennials taking this chance to do their research and invest. When we went into lockdown, one of my articles asked ‘is now the time for millennials to invest in equities?’, arguing this could be a good time for millennials who are in a position to do so, to invest. I hope this added research has truly led to more investments for millennials. It would be nice to think there’s a silver lining to our current situation.
*Source: OnePoll, commissioned by Open Study College, of 2,000 adults
^Source: FundCalibre, visitor ages 18-34, 1 Oct 2019 to 31 March 2020
^^Source: FundCalibre, visitor ages 18-34, 1 April 2020 to 30 September 2020