Ten of the best: managers at the top of their peer groups
Finding the best fund managers is both a science and an art form: you need experience and gut feel...
By 2020 millennials are expected to make up 35% of the global workforce and takeover Generation X in spending power* – but what makes them tick? Companies around the world are likely to be asking the same questions about their future customers.
It’s easy to stand back and put a label on them: make jokes about avocado toast and how ‘Instagramable’ their life is, but, as with most things, it’s better to understand what’s going on beneath the surface.
Are millennials really all that different from previous generations? And if so, how? And why?
We decided to see what millennial research patterns on FundCalibre could tell us about the investors of the future.
‘There are only two ways to influence human behaviour: you can manipulate it, or you can inspire it.’ – Simon Sinek, motivational speaker
In 2018, more than 180,000 unique users** visit our website, 27% of them were millennials, 32% Generation X and a majority of 41% were Baby Boomers.
Of the three generations of fund researchers, millennials spent the least amount of time on a page and had the lowest number of page views. The visited, they read, and they left pretty quickly.
However, when you look more closely at what they are spending their time reading and researching it gives a lot of insight into their mind and their habits.
Our ideas and insights blog makes up 29% of our overall website traffic. It covers a variety of topics from investment strategy to economics and politics. But, when you break down whose viewing that content, you’ll find it’s where most millennials are choosing to spend their time.
A survey of our top forty most read articles from 2018 revealed five articles that were predominately millennial viewers (over 45%). One of them was share classes explained (48%). But that’s not what surprised me the most.
The biggest shock to me was looking at the figures for Breaking down the barriers: female fund managers, our third most viewed article of the entire year. Only 22% of readers came from our largest audience (Baby Boomers) and they were all female. In contrast, 45% of readers were millennials and their audience was split 67% male and 33% female.
Less of a shock to the system – and more of a confirmation really – millennials care more about ethical investing. Of the four ‘ethical investing’ articles published in 2018, millennials made up 37% of the readers and Baby Boomers 33% – not too bad. But when you look at the two articles which specifically say ‘Ethical Investing’ in the title (Ethical Investing: can you make a difference and Ethical Investing: time to put our money where our mouth is?) Baby Boomer interest drops to less than 20% while millennials rise dramatically to 50%.
Of the four ethical articles, Baby Boomers only surpassed millennials once: when we asked if FAANGs could be ethical investments. As a millennial myself, I would have thought the cross over between big tech companies and ethical investing would have been of more interest.
Remember how I said millennials spend the least amount of time on a page? Not when it comes to reading about how to invest or get fresh ideas.
Blog and videos are where 61% of millennials spend their time. Conversely, only 50% of Generation X visit the blog and just 45% of Baby Boomers. Millennials also spend 12% more time reading pieces than older generations, and spend 24% more time reading learn pieces. The most popular learn article in 2018 was Should you invest in value or growth stocks? with 58% of the audience being millennials ,while just 18% of Baby Boomers were interested.
If millennials are spending their time reading about learning about investing, what aren’t they interested in?
Three of our most read articles (1st, 5th, 8th) related directly to fund performance; our Fund Management Equity Index 2018, for example. Of these, millennials made up less than 20% of the audience and they didn’t even read our 8th most read Know your Zebras from your Donkeys: four thoroughbred funds.
Performance history may not be a priority, but neither is economics of politics if our website is anything to go by. Interested in Draghi and the European sovereign debt crisis or Brexit? Not millennials. Of the three Brexit-centric articles in the top 40, shockingly – as it impacts their future the most – millennials made up just 6% of the readership!
Three funds transcended generations: Baillie Gifford Global Discovery and Scottish Mortgage Investment Trust were in the top five across the board. Generation X and Millennials had the most in common, with another two matching in the top five: Marlborough Special Situations and BMO Global Smaller Companies. The most-viewed fund by Generation X, Jupiter European, also featured in the top five from Baby Boomers.
But what was the most viewed by Millennials? Janus Henderson UK Property fund – and they stayed on the page almost twice as long as any other. So why property? I can’t say it was a particular theme; the most viewed sector was UK All Companies and a comparison to other property funds doesn’t show the same overweight of millennial views.
Here’s why I’m not ruling it out as an outlier. Remember our third most viewed article about female fund managers that millennials loved so much? Janus Henderson UK Property and co-manager Ainslie McLennan were featured prominently in the piece.
Using all this lovely (albeit geeky) data, what have we actually determined about millennials and their relationship to investing?
Millennials seem to read and research a lot – most likely from a variety of sources. They spend the most time finding out about FundCalibre – looking at What is an Elite Rating and learning about the research team. But when it comes to specific fund research, they’re just not quite there, spending only a quarter of their time reading the more detailed fund notes. This is possibly because they don’t yet have the money to invest (or think they don’t) and are still building their emergency funds rather than thinking about ISAs and pensions.
When our article titles refer explicitly to ‘five funds for…’ or ‘fund managers who…’ millennial interest plummets. But when titles refer to themes like ‘value or growth’ or even Investing in the world’s happiest places, millennials are suddenly very interested. Baby boomers tend to want things spelled out for them – perhaps they’ve read all the guides before. Or maybe millennials want to feel like they’re making their own decisions when it comes to their money. Despite the limited amount of time spent researching funds, they’re far more likely to engage with a piece that resonates with them on a foundational level, like the female fund manager article causing a spike for UK Property.
*Source: FT, The millennial moment – in charts, 6 June 2018
**All website data sourced from FundCalibre.com from 1 January 2018 to 31 December 2018.