By Anna Peel. Originally published at ValueWalk.
- Young adult investors have mostly been buying passive funds in the first month of the new tax year
- The US is the favoured market despite volatility, alongside broad-based global equity funds
- The only two actively managed funds have a growth-bias
Q1 2022 hedge fund letters, conferences and more
Gen Z Back Passive Funds
Emma Wall, Head of Investment Analysis & Research at Hargreaves Lansdown:
“It is great to see young adult investors taking advantage of their tax wrappers so early in the new tax year. It has been a difficult start to the 2022/23 tax year, with significant market volatility caused by geo-political uncertainty and rising inflation – and corresponding central bank policy. Yet if you are investing for the long-term, as those in the cohort are, particularly in a LISA or SIPP wrapper, then it is the right thing to do to look through the headwinds to multi-decade growth opportunities. With a potential investment horizon of half a century in the case of a personal pension, inflation’s impacts – however painful in the present – are transitory and a broad-based competitively priced passive fund can be an excellent option. A global equity tracker will offer geographical diversification with a bias the economic giants of the globe. If you are looking to add to this allocation in the future consider upping your exposure to emerging markets. With a 20, 30, 40 year time horizon most investors can afford to take on more risk for the potential reward.”
Top investments by net buy (£) for those aged 18-29 in the period 5-28 April
Stocks & Shares ISA
| Fidelity Index World |
| Fundsmith Equity |
| Legal & General International Index Trust |
| Legal & General US Index |
| Rolls Royce Holdings Plc |
LISA
| Fidelity Index World |
| Fundsmith Equity |
| Legal & General International Index Trust |
| Legal & General US Index |
| UBS S&P 500 Index |
SIPP
| Bank Of Ireland |
| Fidelity Index World |
| Legal & General International Index Trust |
| Scottish Mortgage Investment Trust plc Ordinary Shares 5p |
| Vanguard LifeStrategy 100% Equity |
About Hargreaves Lansdown
Almost 1.7 million clients trust us with £141.2 billion (as at 31 December 2021), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.
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