A recent Bank of America survey has found that individuals aged 21 to 42 who hold at least $3 million in assets have only a quarter of their portfolio in equities. This is compared with more than half for Baby Boomers and Gen X, Bloomberg points out.
Bank of America surveyed 1,052 people with at least $3 million in investable assets and found that Gen Z and millennials distributed 15% of their portfolio to digital currencies, compared with just 2% for Baby Boomers and Generation X.
This lackluster interest in building robust stock assets belies a trend that younger generations likely assume “a traditional portfolio of stock and bonds is not going to deliver above-average returns over time,” Jeff Busconi, chief operating officer at Bank of America Private Bank, told Bloomberg. “We’ve had a very strong run in the stock market over the last decade and are now living through volatile times. That’s on the front of people’s minds. It’s something we’re watching, but exposure to crypto is still relatively low among our client base,” Busconi said.
Older investors will transfer an estimated $84 trillion of their assets to Generation X and millennials between now and the next 20 years with the majority going toward philanthropic efforts and heirs, according to data presented by Cerulli Associates.
It was also highlighted that the younger individuals were also twice as likely to donate through “structured vehicles such as donor-advised funds, or DAFs,” Bloomberg points out, which are investment accounts that boast tax breaks.