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Marketing Communication

The Rise of the Next-Gen, Everyday Investor

13 January 2025

Taking advantage of innovations that make investing easier, a growing number of young people are seizing control of their financial futures

Whisper it quietly but a new generation of everyday investors is emerging. Taking advantage of innovations that allow anyone to invest for as little as a few euros at the click of a button, they’re beginning to save for their futures through financial markets.

What’s made this possible? Quite simply, investing is getting easier. Traditionally, investing was the preserve of the wealthy, but today low-cost online brokers, automated neobank accounts and exchange-traded funds (EFTs) are opening a world of possibilities. Then, of course, there’s the wonder of crypto currency investing.

As young people get wealthier and more financially literate, there’s a growing movement of next-gen, everyday investors. They’re speculating to accumulate – after all an investment in global equities has returned an average of 10% each year for the last 10 years, using the VanEck World Equal Weight Screened UCITS ETF as a proxy.1 It is important to note though that past performance is not a reliable indicator for the future. Meanwhile, the rate on bank deposits was close to zero for some of these years in many countries.

Of course, there are no guarantees that equities will provide this kind of return in future. But as many of the next generation of investors are young, they have the time to ride out the shorter-term corrections in markets that happen now and again.

58% of Americans have stock accounts

Let’s look at a few facts. In the United States, the Federal Reserve estimated that 58% of the country’s 335 million people owned publicly traded stock in 2022 – far higher than the 49% doing so 10 years earlier in 2013. The central bank put this extraordinary growth down to the democratization of investing through low-cost brokerage accounts, reduced trading fees and simplified access to financial markets.2

Women are in the vanguard of the next-gen investment movement. A survey conducted last year found that 7 in 10 US women (71%) own investments. This was 18% higher than the survey result for 2023.3

In Europe, investing also appears on the rise, although it’s still far short of the US. Take the Netherlands. A quarter (26%) of households had investments in stocks, funds or other vehicles in 2024, according to the country’s AFM financial regulator. That’s up from a fifth (22%) in 2022.

The non-investing investor

Encouraging as these numbers are, many people still do not invest, even though there are more reasons than ever to invest. Think not just of your immediate savings but your long-term financial security – neither employers nor the state pay the generous pensions they once did.

Looking once more to the Netherlands, it seems many don’t invest simply because they don’t know how to or don’t understand and overestimate the risks. When Dufas, the Dutch Fund and Asset Management Association, asked 1,589 people in September 2024 why they didn’t invest, the results suggested mainly a lack of knowledge. Almost half (47%) said they didn’t know how to, with almost as many (43%) thinking investing too risky. That’s despite the fact that there are many low-risk options such as government bonds. Additionally, even investing in equities can be less risky than commonly perceived when diversified across a broad range of sectors, regions, and companies, as this reduces the impact of individual stock volatility.

Reasons not to invest

Source: Dufas, September 2024.

ETFs and democratisation

At VanEck, we are passionate about educating these non-investing investors—whether through this column, our Academy website pages or the talks we give in schools and at investors events. We are also in the vanguard of democratising investing and proud of it. We offer a broad range of ETFs that have low fees and are easy to trade.

Investors can buy VanEck ETFs in global equities, government bonds, corporate bonds and real estate. Additionally, we have a range of multi-asset ETFs that allow you to select the level of risk that suits you. We offer thematic ETFs, allowing e.g., to invest in megatrends which potentially shape our future. And there are ETNs on cryptocurrencies for people who want a convenient way to buy and store them. It's important to note that all investments carry risk, including the risk of capital loss. Thematic ETFs, for instance, involve sector concentration risk, while crypto ETNs are exposed to extreme volatility. As such, allocations to thematic ETFs and crypto ETNs should form only a limited part of a well-diversified portfolio. Investors should carefully read the prospectus, KID/KIIDs, and other relevant materials before investing to gain a complete understanding of the potential risks and features of the investments.

My hope is that the democratisation of investing will continue and intensify. In the Netherlands, our VanEck Direct app enables people to automate investing, making it even easier. It would be good if in five years’ time the movement of the next-gen, everyday investor has gained momentum, with still more people investing.

1 Source: VanEck. Data as of 31 of December 2024 based on complete 12 month periods for the past 10 years. Fund inception date: 13.05.2013.

2 Federal Reserve Survey of Consumer Finances, 2022. Retail Risk: Investors’ Portfolios During the Pandemic.

3 Fidelity Investments 2024 Women & Investing Survey. The apparent mismatch with the Fed numbers might be due to a difference in scope. E.g., Fidelity includes cryptocurrencies whereas the Fed seems to have excluded it.

IMPORTANT INFORMATION

This is marketing communication. Please refer to the prospectus of the UCITS and to the KID/KIID before making any final investment decisions. These documents are available in English and the KIDs in local languages and can be obtained free of charge at www.vaneck.com, from VanEck Asset Management B.V. (the “Management Company”) or, where applicable, from the relevant appointed facility agent for your country.

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For investors in the UK: This is a marketing communication for professional investors only. Retail clients should not rely on any of the information provided and should seek assistance from an IFA for all investment guidance and advice. VanEck Securities UK Limited (FRN: 1002854) is an Appointed Representative of Sturgeon Ventures LLP (FRN: 452811), who is authorised and regulated by the Financial Conduct Authority (FCA) in the UK, to distribute VanEck´s products to FCA regulated firms such as Independent Financial Advisors (IFAs) and Wealth Managers.

This information originates from VanEck (Europe) GmbH, which is authorized as an EEA investment firm under MiFID under the Markets in Financial Instruments Directive (“MiFiD). VanEck (Europe) GmbH has its registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, and has been appointed as distributor of VanEck products in Europe by the Management Company. The Management Company is incorporated under Dutch law and registered with the Dutch Authority for the Financial Markets (AFM).

This material is only intended for general and preliminary information and shall not be construed as investment, legal or tax advice. VanEck (Europe) GmbH and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed.

VanEck World Equal Weight Screened UCITS ETF (the "ETF") is a sub-fund of VanEck ETFs N.V., an investment company with variable capital under the laws of the Netherlands. The ETF is registered with the AFM, passively managed and tracks an equity index. Investing in the ETF should be interpreted as acquiring shares of the ETF and not the underlying assets.

Performance quoted represents past performance. Current performance may be lower or higher than average annual returns shown.

The Dutch domiciled ETFs use a gross reinvestment index as opposed to many other ETFs and investment funds that use a net reinvestment index. Comparing with a gross reinvestment index is the purest form since it considers that Dutch investors can reclaim the dividend tax withheld. Please note that the performance includes income distributions gross of Dutch withholding tax because Dutch investors receive a refund of the 15% Dutch withholding tax levied. Different investor types and investors from other jurisdictions may not be able to achieve the same level of performance due to their tax status and local tax rules. Returns may increase or decrease as a result of currency fluctuations. Investors must be aware that, due to market fluctuations and other factors, the performance of the ETFs may vary over time and should consider a medium/long-term perspective when evaluating the performance of ETFs.

Investing is subject to risk, including the possible loss of principal. Investors must buy and sell units of the UCITS on the secondary market via a an intermediary (e.g. a broker) and cannot usually be sold directly back to the UCITS. Brokerage fees may incur. The buying price may exceed, or the selling price may be lower than the current net asset value. The indicative net asset value (iNAV) of the UCITS is available on Bloomberg. The Management Company may terminate the marketing of the UCITS in one or more jurisdictions. The summary of the investor rights is available in English at: complaints-procedure.pdf (vaneck.com). For any unfamiliar technical terms, please refer to ETF Glossary | VanEck.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.

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IMPORTANT INFORMATION ABOUT VANECK DIRECT

This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.

The information contained on this app originates from VanEck Asset Management B.V. (Chamber of Commerce 34314095), a private limited company incorporated under Dutch law, having its registered office in Amsterdam and its principal place of business at Barbara Strozzilaan 310. VanEck Asset Management B.V. is a management company of UCITS and holds a license as per Article 2:69b of the Dutch Financial Supervision Act and is registered as such with the AFM and DNB.

This app is addressed to Dutch investors in the Netherlands.

The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. VanEck Asset Management B.V. and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. Information are current as of the publication date and are subject to change. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Brokerage or transaction fees may apply.

VanEck does not provide financial advice, however it complies with the suitability assessment under MiFiD II regulation.

Please note that the Internet is not always a completely reliable facility for the transmission of, and access to, information and that malfunctions, delays and errors may occur. VanEck accepts no liability for direct or indirect damage in connection with a (temporary) inability to access or use this app, as well as for any delay or error in sending or receiving messages, including communications and instructions.

This app does not offer any service and/or product, nor is intended for, U.S. residents. "U.S. Resident" means any person or entity deemed by the Securities Exchange Commission from time to time to be a "U.S. resident" under Rule 902(k) of the 1933 Act or such other persons or entities as the directors of VanEck may designate. All performance information is based on historical data and does not predict future returns. Investing is subject to risks, including the possible loss of principal.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.

© VanEck Asset Management B.V.

Important Disclosure

This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.

This information originates from VanEck (Europe) GmbH, which has been appointed as distributor of VanEck products in Europe by the Management Company VanEck Asset Management B.V., incorporated under Dutch law and registered with the Dutch Authority for the Financial Markets (AFM). VanEck (Europe) GmbH with registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, is a financial services provider regulated by the Federal Financial Supervisory Authority in Germany (BaFin).

The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice VanEck (Europe) GmbH, VanEck Switzerland AG, VanEck Securities UK Limited and their associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results. Information provided by third party sources is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Brokerage or transaction fees may apply.

All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.

© VanEck (Europe) GmbH / VanEck Asset Management B.V.