High inflationary environment, rising rates, and war in Ukraine drives retail investors to buy value and sell growth and meme stocks
Younger investors embraced energy stocks and high dividend paying companies; continued to buy crypto amid turbulent market conditions
DALLAS–(BUSINESS WIRE)–Apex Fintech Solutions (“Apex”), the “fintech for fintechs” powering innovation and the future of digital wealth management, today released its Q1 2022 Apex Next Investor Outlook. The report, which analyzes proprietary data of US-based investors on the Apex Clearing platform, sheds light on the top 100 stocks held by younger investors, with a special focus on the rising Gen Z demographic. The report also examines which stocks fell in the rankings alongside behavior parallels and comparisons to older generations.
Volatile market conditions in a rising interest rates environment coupled with the devastating war in Ukraine likely caused retail investors to shift their focus away from high growth and meme stocks to dividend paying companies and energy shares in the first quarter, as reflected in Apex’s Q1 2022 Next Investor Outlook data. Investments in energy stocks such as Chevron and Exxon Mobil soared in Q1 as crude oil prices hit multi-year highs. While stable, income-generating, dividend payers including Costco and AbbVie also gained popularity, interest in growth stocks such as Rivian and Roblox significantly decreased. Consistent with the third and fourth quarters of 2021, the stocks held within the Gen Z top 10 included Tesla, Apple, Amazon, and Microsoft.
Looking ahead, throughout the first quarter, more than 460,000 new crypto-enabled accounts were created across Apex client’s platforms. Of the 8 million US-based accounts analyzed overall, nearly 4.5 million are crypto-enabled, reflecting the rapid rise in cryptocurrency adoption as investors across generations increasingly shifted towards a “buy” versus “sell” tendency. Moreover, younger investors with crypto-enabled trading accounts tended to diversify their portfolios with the inclusion of mainstream stocks and smaller, unique industry bets, including AMC, Disney and Genworth Financial.
“Over the next 25 years, nearly $70 trillion of wealth is expected to transfer from Baby Boomers to younger generations, including Millennials and Gen Z. This imminent generational wealth transfer has already begun fueling major implications for how, when, and why financial services are consumed today and in the future,” said Bill Capuzzi, Chief Executive Officer of Apex. “As market dynamics continue to shift, Apex is proud to support the interests of retail investors as they further propel innovation in digital wealth management to new heights.”
The Apex Next Investor Outlook includes an analysis of the top 100 stocks owned by millions of investors on the Apex platform. The Q1 2022 report analyzed more than 1.3 million Gen Z accounts, in addition to more than 6.7 million accounts held by Millennials, Gen X and Baby Boomers.
Themes in the Q1 2022 Apex Next Investor Outlook include:
- Energy stocks heat up – Energy stocks soared in the Gen Z rankings in Q1 as the war in Europe propelled crude oil prices to multi-year highs. Chevron jumped 27 spots to #49 while Enterprise Products Partners and Energy Transfer joined the top 100 at #88 and #97, respectively. Exxon Mobil, which climbed 10 spots to #24, was one of several energy companies to raise spending on share repurchases, offering a further boost to sentiment surrounding the sector.
- Scooping up dividend stocks – Younger investors embraced dividend stocks, reflecting an inclination for safety amid turbulent market conditions by purchasing shares of stable, income-generating companies. 43 of the top 100 Gen Z holdings are dividend payers, and 30 of those dividend stocks, or 70%, climbed the rankings in Q1. Gen Z investors rewarded well-established businesses offering cash payments to shareholders, including Costco Wholesale (up 5 to #19), Coca-Cola (up 5 to #22), AbbVie (up 10 to #35) and PepsiCo (up 5 to #62).
- Growth stocks on shaky ground – High-flying growth companies slid in Q1 as Gen Z investors weighed concerns about how they will fare in an environment of rising interest rates. Electric vehicle manufacturers fell, including Lucid (down 6 to #16) and Rivian (down 11 to #55). Tech and online companies were also challenged, including cryptocurrency exchange Coinbase (down 9 to #37), video game developer Roblox (down 12 to #48), e-commerce player Shopify (down 19 to #50) and social media firm Snap (down 23 to #64).
- Cross generational interest in crypto – Broken down by generation, Millennials represented 54% of crypto-enabled accounts, with Gen Z and Gen X each accounting for 21%. Boomers held just 4% of crypto-enabled accounts. When looking at trade activity for single-name stocks held as a long position, all generations of crypto-enabled account holders exhibited a higher “buy” than “sell” tendency, ranging from 60% (Millennials) to 74% (Gen X).
- Crypto mixing with big-name players and unique underdogs – Crypto-enabled accounts across all generations also sought to diversify their portfolios with both mainstream and underdog accounts. Several big, well-known names landed within the top 20, including Tesla (#5), Apple (#6), Amazon (#7), Ford (#9), Disney (#15), Microsoft (#18) and Meta Platforms (#19). Flagship meme stock AMC Entertainment was widely owned, landing at #3, and electric vehicle companies NIO (#16) and Lucid (#17) also made the top 20. Other top holdings represented a variety smaller companies and unique industry bets, such as insurance provider Genworth Financial (#1), security firm ADT (#2), healthcare company Opko Health (#4), building materials firm Cemex (#8) and interactive entertainment provider Zynga (#10).
To see the complete list of the Apex Top 100 stocks among Gen Z investors, click here.
About Apex Fintech Solutions
Apex Fintech Solutions LLC, the “fintech for fintechs,” is the parent company of Apex Clearing Corporation, a custody and clearing platform that’s powering innovation and the future of digital wealth management, and Apex Pro, a trusted clearing partner to broker-dealers, ATS’s, routing firms, professional trading firms, hedge funds, institutions and emerging managers. We offer cryptocurrency trading and custody services through Apex Crypto LLC, a wholly owned subsidiary of Apex Fintech Solutions. Collectively, our suite of solutions creates an environment where companies with the biggest ideas in fintech are empowered to change the world. If you’ve got the guts to dream, we’ve got the guts to help you realize those dreams.
For more information, visit the Apex Fintech Solutions website: https://www.apexfintechsolutions.com.
Genevieve Pirrong/Sara Widmann
Gasthalter & Co.