Over a third of respondents said they owned stocks in their portfolio, and that the asset class will remain their top choice for the next 12 months, according to a Franklin Templeton Next-Gen Investor Survey.
Apparently young Singaporeans are also prudent. The majority (83%) of respondents have the habit of saving monthly, and half set aside a monthly expenditure for investment. The average annual investment amount among next-gen Singaporeans is slightly over S$18,000 ($13,315).
“From the survey results, we are heartened to see a significant number of Gen Z [born between 1997 and 2003] and millennials [born between 1986 and 1996] who believe in the importance of saving as well as investing early and regularly,” said Dora Seow, country head for Singapore, Franklin Templeton.
Franklin Templeton hired NielsenIQ to conduct the online survey by studying the views of 502 Singaporeans aged between 18 and 35 years old. The respondents’ monthly income levels were varied, with 37% below S$3,000, 31% between S$3,000 and S$5,999, 20% between S$6,000 and S$9,999 and 11% above S$10,000. The survey was carried out between 19 March and 6 April 2021.
One in two of those surveyed agree that people should start investing when they are young, and that investing is important for good financial planning. Yet, one in three also said the process makes them anxious, and that choosing the right investment is difficult.
The respondents currently hold at least one investment product in their investment portfolio which include equities (36%), fixed income (29%), cryptocurrency (28%), ETFs (25%) and mutual funds (23%).
About 57% of young respondents adopt a “60% equity and 40% fixed income” asset allocation, with the rest adopting either other asset allocation strategies (23%) or do not have a strategy (20%).
“As we navigate through a low-yielding environment, young investors looking to maximize their returns outside of traditional asset classes and in avenues such as cryptocurrencies, should consider diversifying their portfolio to better ride out high volatility in such spaces,” Seow said.
Investment expectations
Looking ahead for the next 12 months, 88% of respondents will consider investing in at least one product, with equities (46%), cryptocurrency (35%), ETFs (31%), fixed income (31%) and mutual funds (27%) once again emerging as the top five choices, the survey shows.
However, when it comes to satisfaction with their current investments, cryptocurrency (81%) comes out ahead, followed by ETFs (76%), equities (72%), fixed income (71%) and mutual funds (70%).
The survey showed that young people also have high expectations when it comes to investment returns, with most (52%) expecting over 10% annual returns, followed by 33% who expect 5-10% and 15% who expect 1-5%.
The biggest cloud hanging over moat respondents this year is the Covid-19 pandemic, but the financial impact is a mixed picture: 29% of respondents said they’ve been positively impacted, 33% said they haven’t been affected and 39% have been negatively impacted.
In fact, among those who have been positively affected by Covid-19, as much as 71% said they have invested more compared with their pre-pandemic levels, while 59% of those not affected also invested more.
What is especially surprising is that 40% of those who have felt a negative financial impact from Covid have invested more — maybe because lockdowns and social distancing have meant they haven’t been able to spend money going out and having fun.
