Singapore millennials and Gen-Z investors remain very optimistic about investing during the coronavirus pandemic and are confident about their prospects, according to a new study.
Franklin Templeton’s inaugural Next-Gen Investor Survey found that over the past 18 months, 80 per cent of respondents continued to invest during the Covid-19 crisis, while an even higher 88 per cent were thinking about investing over the next year.
About 37 per cent had a monthly personal income of less than S$3,000 (US$2,219), with 31 per cent taking home between S$3,000 and S$5,999, 20 per cent making between S$6,000 and S$9,999, and 11 per cent collecting more than S$10,000 monthly.
The online survey examined the investing motivations, intentions and aspirations of Singapore millennials, aged 25 to 35, and Gen-Z, aged 18 to 24, amid the Covid-19 pandemic. There were 502 respondents and the survey was conducted from March 19 to April 6.
A promising finding for the industry is that 83 per cent of respondents are habitual monthly savers and half set aside some of their income specifically for investing, with the average yearly investment clocking in at just over S$18,000. The majority, 56 per cent, also prefer saving via dollar-cost averaging, while 24 per cent are lump sum allocators.
But while these young investors are keen on saving, most also have high expectations for investment returns. More than half expect annual returns of more than 10 per cent, and a third expect returns of 5-10 per cent. Another 15 per cent expect 1-5 per cent returns.
The traditional 60 per cent equities, 40 per cent fixed income asset allocation model is favoured by 57 per cent of respondents, while 23 per cent tap asset allocation strategies and 20 per cent have no strategy. More than 33 per cent of respondents own stocks, with that asset class remaining the most popular option over the next 12 months.