NEW YORK, April 14, 2021 /PRNewswire/ -- A much
broader range of Americans are investing and engaging in U.S.
financial markets, with Millennials, as well as households with the
smallest amount to invest, growing in influence from
year-end 2017 through June 30,
2020, according to a new quantitative study released by
Broadridge Financial Solutions, Inc. (NYSE: BR), a global
Fintech leader.
This study, the first-of-its kind and scale – Broadridge
Insights on U.S. Investors – provides unprecedented
evidence-based data and observations of investors who buy mutual
funds, ETFs and equities through financial intermediaries. The
study covered tens of millions of U.S. investor households and
billions of data points, providing a unique perspective across
generations, geography, educational attainment, channels,
investment products, and wealth tiers.
"We are all witnessing an unprecedented and accelerated
democratization of U.S. investing," said Bob Schifellite, Broadridge's Investor
Communication Solutions President. "The signs are undeniable as
younger investors, particularly Millennials, grew as a percentage
of investors studied from 9% to 14% during this period.
Additionally, households with the smallest amount to invest,
referred to as the Mass Market, grew in influence from 30% to 38%
of investing households. Many are investing using cost-effective
ETFs, and more have broader access to low-cost institutional
shares, highlighting a changing investing landscape."
Key Findings include:
- Millennials are up-and-comers in the market
Millennials (born 1981 – 1996), the fastest-growing generation
in numbers of investors studied, will continue to grow within the
Mass Market segment and beyond. Millennials grew as a percentage of
overall U.S. investors studied from 9% to 14% over the period and
Gen X (born 1965 – 1980) grew from 24% to 27%.
Boomers (born 1946 – 1964) decreased as a total percentage of
investors studied from 46% to 43% and the Silent Generation (born
1928 – 1945) also declined as a percentage of investors from 20% to
14% – but both still comprise 57% of the number of investors
analyzed across the generational segments studied.
The Mass Market, defined as households with less than
$100,000 in investable assets, grew
in influence with a rising share of households and Assets Under
Management (AUM). During the study period, the Mass Market grew
from 30% to 38% of households with Mass Affluent ($100K to <$1MM) dropping from 57% to 51% and
High Net Worth ($1MM+) dipping from 13% to 11%.
The Mass Market also represents a growing share of asset
ownership, defined as investments in mutual funds, ETFs and U.S.
equities. Despite lower household AUM of 10% of the overall assets
studied, the Mass Market gained 3% in asset ownership share since
2017. In contrast, Mass Affluent and High Net Worth AUM decreased
over the same period.
"The study highlights trends that are indicative of things to
come and present enormous opportunity for asset managers and
advisors who adapt to address the emerging needs of investors,"
said Dan Cwenar, Broadridge's
President of Data and Analytics. "Money is expected to continue to
flow into low-cost investment vehicles such as passive and active
ETFs and Millennials and Mass Market investors will continue to
gain influence as their assets grow."
- Investors purchased low-cost Institutional Shares and ETFs
While A-class shares and institutional shares are the most
widely held by households, A-class shares declined in household
ownership from 43% at the end of 2017 to 39% on June 30, 2020. During the same period,
household ownership of institutional shares grew from 44% to
54%.
Household ownership of ETFs grew steadily from 30% to 37%. In
contrast, the share of mutual funds increased 2% over this period,
although U.S. equities growth was flat.
- Limited Pandemic Asset Shifts Effects Seen Across Generations,
but Equities Rise
Boomer and Silent generations were at or above their pre-Covid
AUM levels by the end of June
2020.
Boomer and Silent generations comprised 76% of household AUM and
fared slightly better than Gen X and Millennials who were slightly
below pre-Covid AUM levels.
However, purchases of U.S. equities increased to 31% as of
June 30, 2020, a 3% uptick over 2019.
Increases were experienced (in order) by Millennials, Gen-X and
Boomers.
The highest concentration of Mass Market households was in the
South (38%) while the highest concentration of High Net Worth (HNW)
households was in the West (41%) – California alone accounted for 28% of HNW
households.
Mass Affluent households were more evenly divided across
regions, with the highest concentration in the South (32%).
The South consistently had the highest concentration of
households across all distribution channels ranging from 31% for
RIA, 31% for Online, 33% for Broker-Dealer and 35% for Wirehouse.
However, the least concentration varied with Broker-Dealer and RIA
both at 19% in the Northeast and Wirehouse (18%) and Online (19%)
in the Midwest.
Study Methodology
Drawing on anonymized data, this study delivers a unique,
evidence-based view of investor holdings.
- Represents 44 million U.S. households that invest in mutual
funds (open-end, closed-end), U.S. equities and exchange-traded
funds (ETFs) sold through financial intermediaries.
- Utilizes a de-identified sample of 20,000 households extracted
from a dataset of those 44 million investor households spanning
billions of data points.
- Includes data for year-ends 2017, 2018 and 2019 and the first
half of 2020.
This study focused on individual investor holdings through
intermediaries. The sample does not include:
- Institutional investors, such as pension funds, hedge funds or
endowments and foundations
- Retirement plans, such as 401(k) and defined benefit plans
- 529 college savings plans
- Bank deposits (checking, savings, CDs, money markets)
- Directly held mutual fund shares, fixed income, money market
funds
- Real assets such as real estate, art, automobiles and
jewelry
About Broadridge
Broadridge Financial Solutions (NYSE: BR), a global Fintech
leader with over $4.5 billion in
revenues, provides the critical infrastructure that powers
investing, corporate governance and communications to enable better
financial lives. We deliver technology-driven solutions to banks,
broker-dealers, asset and wealth managers and public companies.
Broadridge's infrastructure serves as a global communications hub
enabling corporate governance by linking thousands of public
companies and mutual funds to tens of millions of individual and
institutional investors around the world. In addition, Broadridge's
technology and operations platforms underpin the daily trading of
on average more than U.S. $10
trillion of equities, fixed income and other securities
globally. A certified Great Place to Work®, Broadridge is a part of
the S&P 500® Index, employing over 12,000 associates in 17
countries. For more information about us and what we can do for
you, please visit www.broadridge.com.
Investors:
W. Edings Thibault
Investor Relations
+ 1 516-472-5129
Edings.thibault@broadridge.com
Media:
Gregg Rosenberg
Corporate Communications
+1 212-918-6966
Gregg.rosenberg@broadridge.com
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SOURCE Broadridge Financial Solutions, Inc.