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Proprietary Data Insights Top Gen Z and Millennial Stock Searches This Month
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Pursuant to yesterday’s installment where we considered why so many millennials are selling their investments, we’re dedicating the next two Juices to what active Gen Z and millennial investors are doing with stocks and crypto. Today, we focus on stocks. Tomorrow, crypto. The Juice fed the top stocks Gen Z and millennials own as of Q2 to our proprietary Trackstar database of the tickers generating the most search interest among financial pros and everyday investors. Trackstar squeezed out the results you see at the top of this email. Given the abject performance of all five of these names YTD, it’s no wonder some investors – young, old, and in between – have been spooked out of stocks. These big names (AMC aside) aren’t overrepresented only in Gen Z and millennial portfolios. They are in the market-tracking index funds, too. SPY, which tracks the S&P 500, is down 25% over the same period. QQQ, which holds the Nasdaq-100 stocks, is down 34%. Why is QQQ down significantly more than SPY? The answer is a lesson in ETF investing, particularly index ETF investing. Look at the concentration of SPY’s top five holdings: Compare that to QQQ’s top five positions: Same names, different concentrations. While Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet’s Class A shares (GOOGL), and Tesla (TSLA) comprise 19.7% of SPY, they make up 38.5% of QQQ. (Note that QQQ holds Alphabet Class C (GOOG) rather than Class A in its top five). When you buy these ETFs, you’re buying a basket of stocks. A weighted basket, based on each company’s market cap. In both cases, much of your fortune hinges on how well these five big names do. One alternative? Equal-weight ETFs. The Invesco S&P 500 Eql Wght ETF (RSP) and Direxion NASDAQ-100 Equal Weighted Index Shares ETF (QQQE) own the stocks in their respective indexes, but, as their names imply, at equal weights. While down YTD, these equal-weight ETFs each performed roughly four-to-five percentage points better than their market-weight peers. Invesco claims its RSP ETF “eliminates the concentration risk,” touting consistent though modest outperformance versus SPY.
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Gen Z and Millennial Investing |
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5 Most Popular Stocks Among Gen Zs and Millennials |
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Key Takeaways:
The above table is from Apex Fintech Solutions, the parent company of Apex Clearing Corporation, which clears trades for the brokerage industry. It shows the top five stocks among Gen Z and millennial investors. They’re identical. In fact, there isn’t much difference between the top names young investors own compared to those Gen X and baby boomers own. Despite all the headlines touting a war between the generations, we’re not all that different. At least not from an investing perspective. Age is but a number! Here’s what really caught our eye…
We believe in Elon. Compared to Q1, Twitter (TWTR) flew up the charts in Q2 across generations, moving up 49 slots to rank 52nd among Gen Z, up 51 slots to rank 51st among millennials, and up 50 slots to rank 51st among Gen X. Even baby boomers put their faith in Tesla founder Elon Musk, who’s set to take ownership of Twitter. TWTR gained a relatively modest 13 slots to hit 88th among, let’s call them, the young at heart! Of course, TSLA crushes it from cradle to grave. Are dividends cool? The Juice loves dividends. We write about them frequently. Once people considered them a thing for old, conservative investors. Now they’re, dare we say, becoming cool among Gen Z. In Q2, blue-chip dividend payers continued to occupy larger portions of Gen Z’s portfolio.
But it’s not just the big names we all know. Curiously, two natural gas stocks – Enterprise Products Partners (EPD) and Energy Transfer (ET) – moved 18 and 25 places higher to #70 and #72, respectively, among Gen Z investors. The Juice thinks this is something to phone home about. (Fist bump if you caught that reference.) EPD and ET both have high dividend yields at 7.7% and 8%. This shows Gen Z is paying attention to the nitty gritty of dividend and income investing. While we urge caution on chasing yield, this does not appear to be a case of that. Gen Z picked a couple of winners.
The Bottom Line: Financial media headline writers love controversy and hysteria. While we get it, they often make something out of nothing, particularly when comparing young to relatively old investors. And when expressing dismay over Gen Z and millennial investing choices and habits. The data shows (a) we’re not all that different and (b) Gen Z appears to have its ducks in a row, constructing diversified portfolios across a range of big-name tech stocks, blue-chip dividend payers, and high-yielding, under-the-radar, outperforming energy companies. In tomorrow’s Juice, we dive deep into the demographic data on crypto. |
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