According to a recent study by CFA Institute and Investor Education Organization (Finra), more than half of Gen Z in China entered the stock market because of fear of missing out (Fomo). Their primary goal is to earn enough money to travel. The survey was conducted with more than 2,800 Gen Z, Millennial and Gen X investors in China, US, UK and Canada last November and December.
According to Paul Andrews, executive director of research at CFA, young entrants are reshaping operations, products and investment platforms. They differ significantly from the mentality and purpose of the previous group of investors.
“A wide range of macroeconomic and social factors such as inflation, ubiquity of cryptocurrencies, and social media KOLs are having a profound impact on young people’s ways and portfolios,” said Paul Andrews. .
Research shows that nearly two-thirds of Gen Z investors, between the ages of 18 and 25 in China, started entering the market before the age of 21 and poured an average of 120,000 yuan (more than 400 million yuan). dong) in shares. Although Chinese investors have the largest average investment balances compared to the US, UK and Canada, the proportion of young people investing here is lower than in the US, where about 82% of investors invest. Start investing before you turn 21.
Fomo is a decisive factor for young people to start investing, in which the percentage of Fomo in China is 60%, the UK is 43% and the US is 41%. Preoccupation with financial markets is also one of the top drivers for Gen Z China.
Shailene Wei, 23, a business development manager from Shanghai, started investing two years ago and spends 60% of her monthly salary in mutual funds.
“I majored in finance, then tinkered with it to make money from investments,” says Wei. She currently invests in a portfolio of safe funds and doesn’t care too much about stock fluctuations.
More than half of Gen Z in China entered the stock market because of the fear of missing out (Fomo)
Ellen Wang, a 23-year-old industry analyst from Shanghai, has been investing in stocks and mutual funds since she was 20. She has about 30,000 yuan to invest, of which 10,000 yuan was given to her by her parents.
“I want to invest because my major is finance. My father and boyfriend also trade often, so we often discuss together to find the right code,” Wang said.
Research shows that most Gen Z investors in China get their investment information from China-based platforms such as Weibo, WeChat, and Douyin. “Gen Z is diverse in age and digitally savvy,” said Gerri Walsh, president of Finra. They are using mobile technology to penetrate financial markets in unprecedented numbers.”
According to SCMP, most of China’s Gen Z are investing in mutual funds. Maggie Wu, a 25-year-old graduate student in Beijing, currently has 20,000 yuan in funds and bonds. She started investing three years ago with her savings. Investment advice comes mainly from parents.
“My father works at a bank. More than 60% of China’s Gen Z investors have parents who are both investors and they give their children advice on how to use capital,” said Maggie Wu.
Research shows that Gen Z China’s top investment goal is mainly to have money to travel. Meanwhile, more than 50% of Canadian Gen Z invest mainly to pay their monthly bills and 48% of UK Gen Z invest to buy a home.
Cryptocurrencies are the top investment choice for Gen Z investors in the US, UK and Canada, but not in China – a country that strictly regulates investment activities in virtual currencies. Beijing began phasing out cryptocurrency trading in 2013 and completely banned it in May 2021.
CFA’s Andrews said that while social media and investment apps are making it easier for Gen Z investors to access financial information, they still face a number of barriers.
“Government, regulators and investment professionals play an important role in helping Gen Z have the knowledge they need to invest wisely and responsibly,” said Mr. Andrews.
According to: SCMP
