Amid a continuing backdrop of fear and uncertainty in the second quarter, investors that custody with Apex Clearing again traded at unprecedented levels with a seeming consensus across generations on a few top picks
Apex Clearing, the custody and clearing engine powering the future of wealth management, has released its Q2 2020 Apex Millennial 100 report, an analysis of the top 100 stocks owned by millennial investors using Apex partner applications as of June 30, 2020. The report analyzed more than 1.3 million investment accounts owned by US-based investors with an average age of 31 years and seven months.
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Amid persistent uncertainty and volatile markets during the second quarter, millennial investors remained uber bullish, opening accounts and trading shares at increasing rates. The Q2 Apex Next Investor Outlook [https://go.apexclearing.com/apex-next-investor-outlook-q22020-infographic] identifies notable patterns and provides insights into how this group of more than one million millennial investors reacted, with a special focus on how millennials are investing during times of crisis and volatility in comparison to other generations.
“In Q2, trading volumes across our partner platforms increased nearly 30% compared to the heavily volatile Q1, and it was another record-setting quarter for account openings,” said Bill Capuzzi, CEO of Apex Clearing. “It’s difficult to pinpoint the reason why—maybe it’s an effort to implement new financial habits during pandemic lockdowns or a way to pass vast amounts of time spent at home—but the numbers don’t lie: millennial investors have become more active in recent months.”
Some trending stock themes in the Q2 Apex Millennial 100 include:
- Support for Apple, Amazon, Tesla and Microsoft spans the generational divides: Boomers, generation X, millennials and generation Z all count the big-name companies among their top four holdings. Investors benefited from their conviction in these companies during the second quarter, as shares of the top four rose an average of 55%, outpacing an epic reversal of fortune by the S&P 500, which advanced 20% in its biggest quarterly gain in more than 20 years. Investors also agree on Facebook, Boeing and Netflix, with each enjoying top 10 status across the generations.
- Elsewhere in investors’ portfolios, however, there is less consensus between generations: Boomers, for example, hold more shares of traditional pharmaceutical companies. Stalwarts Abbott Laboratories, Bristol-Myers Squibb and Merck & Co rank #40, #47 and #62 for boomers, respectively, but aren’t counted among the Apex Millennial 100 and rank near the bottom of the 100 largest holdings for generation X investors. Millennials, meanwhile, are notably more eager than other generations to buy the pandemic-driven dip in travel stocks. Norwegian Cruise Line, Royal Caribbean Cruises and Spirit Airlines land in the top half of the Apex Millennial 100 but get a weaker backing from generation X and fail to make the top 100 for Boomers.
- High-priced shares no longer out of reach: Fractional trading—purchasing partial shares of individual stocks—is empowering investors to buy what they want, not just what they can afford. This accounted for nearly half of all trades made across Apex’s clients’ platforms in the second quarter. The growing popularity of these bite-sized investments is evident in millennials’ largest holdings, where several stocks with steep per-share price tags rank highly. One share of Amazon (#2) closed Q2 at $2,759, an amount larger than the average millennial investor’s overall account value. Other examples include Tesla (#3), which closed the quarter at $1,080 per share and Alphabet Class C (#12), priced at $1,414.
“Interestingly, our Q2 2020 data shows that the different generations – from inexperienced generation Z investors to Boomers who have lived through multiple market downturns – are seeing eye-to-eye on certain investments,” said Hannah Shaw Grove, Chief Marketing Officer of Apex Clearing. “Big Tech may be the one thing that’s safe to talk about in mixed company this year, as many of these stocks ranked at the top of the list for every generational segment.”
In terms of allocation changes, some of the biggest moves within the Apex Millennial 100 were seen in vaccine technology company, Moderna, which joined the list at #40 and entertainment company, Genius Brands, which hopped on at #46.
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