Next-Gen investors, particularly millennials and Gen Zs, are relatively optimistic about their future personal finances despite the uncertainty brought on by the Covid-19 pandemic.

In separate studies by top asset managers, Asian and global millennials (born from 1986 to 1996) and Gen Zs (born from 1997 to 2003), aged 18-35, admit that their investment prospects have been negatively affected by the pandemic but they expect the situation to improve in the long term.

A survey conducted by Franklin Templeton, published on August 2, finds that the long-drawn nature of the pandemic does not appear to have dampened investor sentiment among Singaporean millennials and Gen Z youths. The majority of respondents (80%) have remained invested during the crisis, and a further 8% of investors are considering investments over the next 12 months.

On the other hand, the Deloitte Global Millenial and Gen Z Survey 2021 says Covid-19 has heightened the uncertainty among millennials and Gen Zs about their financial future. Two-thirds of all respondents say they “often worry or get stressed” about their financial situation, while the same number say the pandemic has caused them to reassess and alter their financial goals. Looking ahead, about 36% of millennials and 40% of Gen Zs believe their personal financial situation will improve by 2022.

Uneven impact

Franklin Templeton’s online survey gathered the views of 502 Singaporeans aged between 18 and 35 years old, and of different gender, ethnicity, marital status and household income. Of the respondents, 37% had monthly income levels below US$3,000, 31% between US$3,000 and US$5,999, 20% between US$6,000 and US$9,999, and 11% above USS$10,000.

The Deloitte report solicited the views of 14,655 millennials and 8,273 Gen Zs (a total of 22,928 respondents) from 45 countries across North America, Latin America, Western Europe, Eastern Europe, the Middle East, Africa and Asia-Pacific. The survey was conducted using an online, self-complete-style interview. Fieldwork was completed between January 8 and February 18 2021.

In Singapore, the pandemic has had an uneven financial impact on Next-Gen investors, with 29% of respondents positively impacted, 33% not impacted and 39% negatively impacted. Those whose financials were positively impacted invested more (71%) since the start of the pandemic compared to those who were not impacted (59%) and negatively impacted (40%).

And as Singapore’s economy recovers, respondents are evenly split in terms of their income outlook, with one in two Gen Zs and millennials expecting a salary increase in the next one year, according to the Franklin Templeton survey.

Reassessing goals

On the global level, the pandemic has heightened the uncertainty of millennials and Gen Zs about their financial future, with two-thirds of respondents to the Deloitte survey saying they “often worry or get stressed” about their financial situation. The same number say the pandemic has caused them to reassess and alter their financial goals.

While personal financial concerns are increasingly on their minds, so is wealth inequality as a larger societal issue. Two-thirds of millennials (69%) and Gen Zs (66%) surveyed think wealth and income are distributed unequally throughout society, according to the Deloitte survey.

“Gen Zs and millennials appear to be relatively optimistic in terms of their expected investment returns with 52% looking at over 10% annual returns. We believe that maintaining a diversified portfolio of risk premia, in addition to the traditional benefits of a balanced portfolio between stocks and bonds, is the most likely path towards stable potential returns, though annualized returns of over 10% will include taking meaningful risks to their portfolio that comes with increased volatility,” says Stephen Tong, client portfolio manager at Franklin Templeton Investment Solutions.

“In the 10 years Deloitte has been conducting the Millennial Survey, millennials and Gen Zs’ lives have changed, but their values have remained steadfast. They have sustained their idealism, their desire for a better world, and their belief that business can and should do more to help society,” says Michele Parmelee, global deputy CEO and chief people and purpose officer of Deloitte.