Young Irish people are turning to stocks and exchange-traded funds (ETFs) as a potential route to building wealth long-term, ditching property as the housing crisis continues to price them out of the market.
New research from fintech Revolut found more than a third of people classed as Gen Z, ie those born between 1997 to 2012, said they felt the capital markets were more effective at building long-term wealth than getting on the property ladder.
Although 29 per cent of Irish people in that age cohort said they had an interest in property, 37 per cent said stocks and ETFs were their top choice. That compares to 23 per cent of 45 to 54 year olds, who said they would prefer to invest in stocks and ETFs before examining other asset classes such as property.
The findings on Gen Z were comparable to Revolut’s research in other European countries. The research is based on Revolut’s data from its investment services customers between January and July this year, and a survey carried out in June by Dynata, questioning 1,000 respondents aged over 18 in each of a number of European countries, including Ireland.
More than half of Revolut’s investors in Ireland were under the age of 34. The findings also revealed Ireland had the second-highest proportion of women investors in the Gen Z age group across Europe, with more than 35 per cent.
Young investors are also interested in diversifying their holdings, with ETFs at an average of 16.5 per cent in this age group, and funds tracking the S&P 500 the most popular option for recurring investments.
This is despite a lack of notable change in tax reforms for ETFs.
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“There is a clear shift in how younger generations are approaching wealth-building,” said Rolandas Juteika, head of Wealth and trading (EEA) at Revolut.
“They simply cannot rely on buying a home to start building towards their financial future; so they are starting earlier, investing smaller amounts, and using tools that were once the preserve of professional investors. This trend is a direct result of both increased financial literacy and the accessibility of new platforms.”
Revolut has emerged as the most successful of the handful of European fintechs founded in the past decade with a digital-only model. It has more than 55 million customers, including three million in Ireland, offering everything from current accounts and savings to investments in stocks, ETFs and cryptocurrency.