The exchange traded fund universe is growing up with an increasingly tech savvy generation of new investors. Consequently, more fund sponsors are beginning to tap market avenues through social media outlets.
For example, Vanguard ‘s “My Life Ticker” campaign utilizes social media and user-generated content to spread investment ideas and connect with a younger audience, reports Jackie Noblett for Ignites.
Moreover, iShares and Invesco PowerShares are taking social media and traditional advertising to catch the ears of Generation Y investors – also known as the Millennial Generation born from the 1980s to 2000s.
According to Cogent Research’s Investor Brandscape, some 44% of Generation Y investors held ETFs in their portfolio and said that ETF investments accounted for 10% of total holdings. Around 70% participants also revealed that they first purchased ETFs in 2012.
Additionally, the Cogent survey discovered that younger investors were more likely to use ETFs, with just 14% of a group of 4,000 affluent investors using ETFs.
“We know that the typical way companies have engaged with customers in the past is through advertising. But this traditional dynamic that has worked in the past is changing with the younger generation, as they’re not as likely to recall that advertising,” Meredith Lloyd Rice, senior project director at Cogent, said in the article.
According to Investor Brandscape, 57% of Generation Y investors recalled contact with mutual fund advertisements over the last year, compared to 75% of non-Generation Y investors. Meanwhile, 35% Generation Y investors recalled social media contact, compared to the 4% of non-Generation Y.
“Gen Y grew up in this world where the first place you go for an answer is online,” Colin Kelton, principal and head of retail marketing at Vanguard, said in the article.
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Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.