Gen Z youth more interested in digital investment: OCBC

Singapore

DIGITAL investments made by Gen Z youth have tripled over the past year, data from OCBC found, with micro-investing, which allows investors to start investing with very low minimum investment amounts, a hit among the group.

The bank found that those under 23 years tend to favour its micro-investment platforms, such as its Blue Chip Investment Plan (BCIP), digital unit trusts and OCBC RoboInvest.

Year-on-year (y-o-y), Gen Z youth clocked the largest increase in investments compared to other age segments - which saw an average increase of just 50 per cent - in Q3 2020.

In the same quarter, transaction volumes and amounts for BCIP and RoboInvest also saw the greatest quarter-on-quarter (q-o-q) increase among students as compared to other age segments. This highlights their "penchant for micro-investing platforms", said OCBC.

Whether it be the case of idleness or the sudden realisation of the importance of financial planning amid the global economic uncertainty, one thing's for sure: investment activity among Gen Z youth picked up during Singapore's circuit-breaker period, and has since continued to grow.

In Q2, those under the age of 23 made more than double the number of RoboInvest transactions as compared to Q1, and their investments saw the greatest spike in number as compared to other age groups, said the bank.

Post the circuit-breaker period, in Q3, investments by Gen Z youth into the platform - which allows investors to invest in portfolios of exchange-traded funds (ETFs) and stocks from as little as US$100 - doubled y-o-y, and more than tripled from Q2. The average investment amounts remained relatively stable across both quarters at S$3,500 - an indication that the youth are "investing steadily and more frequently", OCBC said.

More individuals aged 21 to 29 have been trying out RoboInvest for the first time after August as well, making up one in three of its new investors. Additionally, the platform has not only won over Gen Z investors, but also those aged above 50 years, who have almost tripled their investments in the platform.

OCBC attributes this to RoboInvest's ability to cater to varied investment preferences and themes suited to different risk appetites; the low minimum investment sums, where nine portfolios enable investing with just US$100; as well as portfolios that align with the interests of Gen Z youth, such as stocks that focus on themes like Internet, video gaming, online retail and digital payments.

Similarly, the bank's BCIP platform, which allows investors to invest in blue chip stocks from S$100 monthly, saw the number of investments from Gen Z youth growing 65 per cent q-o-q in Q2. This makes it the platform that the group most frequently invested in for the quarter, with an average investment amount of S$210.

BCIP investments among the group also saw a nearly threefold increase y-o-y in Q3.

As for digital unit trusts - which enables investors to invest in unit trusts with a minimum of S$100 monthly - the amounts invested by Gen Z youth increased more than three times y-o-y in Q3.

For the quarter alone, the average digital unit trust transaction amount invested by the group was also more than three times that of Q2 and Q1 this year, with an overall average amount of S$3,000.

Finally, for securities, OCBC said the number of new Gen Z investors more than doubled y-o-y in Q3, with the average growth of new investors across all age segments increasing more than four times y-o-y.

Gen Z investors in securities also increased more than 2.5 times in Q2 from the previous quarter. As for those aged between 23 and 30, during the same period, the number of new investors increased close to five times q-o-q.

Among other age segments, the average increase in new investors was also more than four times in Q2.