Recent data from Selfwealth Ltd (ASX: SWF) has unveiled intriguing investment behaviors among Baby Boomers for the 2024 financial year. The trends highlight notable distinctions between Baby Boomers and other generational investors in their approach to trading on the Australian Securities Exchange (ASX).
Baby Boomers Favour ASX 200 Blue Chips
Among Baby Boomers using the Selfwealth platform, individual shares from the S&P/ASX 200 Index (ASX: XJO) dominate trading activity. Their top picks are largely well-established, dividend-paying blue-chip stocks, with Fortescue (ASX:FMG) Metals Group Ltd leading the list, followed by BHP (ASX:BHP) Group Ltd.
Unlike younger generations, Baby Boomers showed a clear preference for these traditional ASX 200 stocks over exchange-traded funds (ETFs). ETFs are notably absent from their top 10 list of most-traded stocks, in contrast to other age groups where ETFs are more commonly traded.
Limited Interest in US Stocks
Baby Boomers also demonstrated minimal interest in US and international shares. Despite the popularity of major US tech stocks, such as those in the "Magnificent Seven," Baby Boomers largely avoided these investments. Only Tesla Inc (NASDAQ: NASDAQ:TSLA) and NVIDIA Corporation (NASDAQ: NASDAQ:NVDA) appeared in their top 100 most-traded stocks for FY24, placing 46th and 99th, respectively. This stands in stark contrast to the S&P 500 Index (SP: .INX), which outpaced the ASX 200 in growth over the same period.
Higher Turnover in ASX 200 Shares
The data further reveals that Baby Boomers are more active traders within their preferred ASX 200 stocks compared to other generations. The trading activity for their top 10 ASX 200 stocks shows a buy-to-sell ratio of 54.4%, indicating a relatively higher level of trading activity. For instance, Fortescue Metals Group shares had a near-even split, with 51.9% of trades being purchases and 48.1% being sales.
Fortescue Metals Group Takes the Lead
Fortescue Metals Group emerged as the most traded stock among Baby Boomers, surpassing even BHP Group and Pilbara Minerals Ltd. The Fortescue share price hit an all-time high of $29.95 on February 2, 2024, which may have triggered some profit-taking activities among investors.
Here is a summary of the top 10 most-traded ASX 200 shares by Baby Boomers in FY24:
- Fortescue Metals Group Ltd (ASX: FMG)
- BHP Group Ltd (ASX: BHP)
- Pilbara Minerals Ltd (ASX: PLS)
Baby Boomers show a distinct preference for trading high-quality ASX 200 stocks, with a notable inclination towards traditional blue-chip investments, while remaining relatively disengaged from international stock markets.