HSBC has just published its “Affluent Investor Snapshot 2024,” which looks at how younger generations are investing, including their investment attitudes, wealth management behaviour, portfolio diversification, international education needs and legacy planning. 

A new Affluent Investor Snapshot 2024 by HSBC reveals that younger generations start investing up to 10 years earlier than Generation X and Baby Boomers. 

They also dedicate a higher proportion of their income (27 per cent) towards investing versus Baby Boomers (22 per cent), with Millennials planning to put 56 per cent of their cash to work, the survey reveals. Top financial goals for Millennials include gaining wealth for financial security (42 per cent), education savings for children (40 per cent) and retirement planning (39 per cent).

Generation X are generally seen as being born in the late 1960s to 1970s and Baby Boomers are seen as those born between 1946 and 1964. 

The Affluent Investor Snapshot 2024 is a Global Quality of Life special report by HSBC. Its insights are based on data gathered from 11,230 individual investors across 11 markets, including Hong Kong, India, Indonesia, mainland China, Malaysia, Mexico, Singapore, Taiwan, the UK, the United Arab Emirates and the US.  Affluent investors are defined as individuals with $100,000 to $2 million in investable assets. The study was conducted by Intuit Research.

The survey also underlines a growing awareness and intent among Millennials to own alternative investments as part of a well-diversified portfolio. In particular, the younger generation exhibits a strong interest in adding private market funds and hedge funds to their portfolios over the next three years.

Public equities, fixed income – outside cash – are the most popular asset classes. Affluent investors currently allocate an average of 32 per cent of their portfolios to cash and cash equivalents, followed by public equities (15 per cent) and fixed income (14 per cent). In terms of themes, affluent investors are interested in AI and automation, and renewables and clean energy, the survey shows.

Affluent investors are also planning to increase diversifying their portfolios across asset classes, investment instruments, and geographies, with individuals in Asia spearheading this trend over the next three years. Looking to the future, affluent investors are interested in derivatives, annuities, exchange-traded funds (ETFs) and bonds.

Despite affluent investors grobally demonstrating a home bias for their investments – as reflected in their equity exposure – over one-third say they intend to increase their investments in international markets, with the United States and mainland China ranking as the top two destinations. But almost half of all investors say ongoing uncertainty over market conditions and the complexity of maintaining a portfolio present hurdles to increasing diversification, the survey reveals.

“It’s clear from this data that Millennials are embracing investing earlier than older generations. This puts time in the market and the power of compounding on their side which are critical in building a strong foundation for financial security and well-being,” Jeffrey Yap, head of investments and wealth solutions, Southeast Asia, HSBC Global Private Banking and Wealth, said. “As they go through their investment journey and put their cash to work, they will look for actionable views and solutions that directly address their needs. This is where our expertise can make a significant difference,” he added.

“The fact that young investors are looking more closely at alternative assets serves as another tailwind for the asset class, as product and platform innovations improve accessibility for a wider range of investors, especially to private markets,” Yap continued.