Gen Z Australians now invest in ETFs more than stocks
ETF ownership by young Australians has risen to almost half for the average Gen Z portfolio. Figures from the trading platform nabtrade reveal ownership among investors under 30 has increased from one in three to almost half over the past five years. ETFs now account for almost half of the average Gen Z portfolio. These Gen Z investors make up almost half of all new nabtrade investors, and account openings among the group have jumped 41 per cent over the past three years.
A separate study by Vanguard shows that 19% of Gen Z investors aged 18 to 28 hold ETFs, while only 4% of Australians over 60 do. Some 45 per cent of Gen Z Australians said they were either very or somewhat familiar with ETFs, though many in this demographic felt confused by the prospect of investing, with almost a third of non-investors saying they lack knowledge or confidence to invest.
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Gen Z Australians are the least likely age group to own equities, but the most likely to hold ETFs or cryptocurrencies, according to nabtrade’s Sitting on the Sidelines report. Younger Australians are more likely to have incorporated ETFs into their portfolios, while older Australians continue to rely more heavily on traditional investment vehicles, particularly direct share ownership. This suggests that differences in ETF uptake reflect not only current preferences, but also the products and structures that were most readily available to investors when they first entered the market.
Nabtrade noted two in three of these younger investors are expecting to receive a dividend from their investments this reporting season. Private Wealth executive Ivano Simonutti said seeing investment income arrive for the first time can change how young people think about building wealth. “Getting your first dividend can be a bit of a lightbulb moment. It can be the first time an investor sees money land in their account from something other than their job. We’re seeing more young Australians start earlier and discover they do not need a large amount of money upfront. Many begin with small, regular investments and build from there.”
