The Future Investor:
Harnessing the Technology of Today
December 1, 2022 | Atlanta
The newest investor class cannot be ignored. They are earning, saving and investing more, not afraid to take on a little more risk and keeping a finger on the pulse of the world’s most innovative companies. Whether you are them, are investing for them, or alongside them, what rising generations do could have a major impact on society.
We explored how they make their financial decisions and use technology, like AI, to manage their finances and add portfolio value, as well as their appetite for EVs.
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- Brittany Boals Moeller, Southeast Region Head, Goldman Sachs Private Wealth Management
- Jeff Busconi, Head of Private Bank Solutions, Bank of America
- Vincent Costa, Co-Chief Investment Officer, Equities, Voya Investment Management
- Brooke Forbes, Chief Information Officer & Head of Technology for Personal Investing, Fidelity Investments
- Sharmila Kassam, VP & Head of Asset Owner Solutions, Nasdaq
- Christopher Larkin, Head of Trading & Investing, E*TRADE from Morgan Stanley
- Ryan McCormack, Senior Factor & Core Equity Strategist, Invesco
- Lauren Kiel, General Manager, Bloomberg Green
- Brett Pulley, Atlanta Bureau Chief, Bloomberg
- Kevin Tynan, Senior Automotive Analyst, Bloomberg Intelligence
- Janet Wu, Anchor & Reporter, Bloomberg
Mindset of the Next Gen Investor
Data from a recent Bank of America survey about the needs and preferences of wealthy households held some surprises. “What we found were some really stark delineations along age lines,” said Jeff Busconi, Head of Private Bank Solutions, Bank of America. Insights from the 21- to 42-year olds included that 75% do not believe a traditional portfolio will bring above average returns. They prefer alternative strategies, private market and real investments, and using sustainability as an investing guideline. Another standout was their nod to philanthropy as part of their wealth and investment strategy. “They want to have an impact now. We call it ‘giving while they’re living’.”
Christopher Larkin, Head of Trading & Investing, E*TRADE from Morgan Stanley offered a clue to what many younger people were focused on during the pandemic lockdown, such as investing those stimulus checks and the meme stock craze. “We saw explosive growth that we’ve never seen before,” from about 300,000 transactions per day in late-2020 to days with more than 2.5 million in three months. It forced them to make major investments on the system side to handle it, including a platform specifically to help those who rely on social media for investing information. “Things we had never thought of before came to fruition with this new group of investors.”
“By and far,” the most attractive sector for this investor class is alternative investing, according to Brittany Boals Moeller, Southeast Region Head, Goldman Sachs Private Wealth Management. Private equity, private credit, private real estate. “They want to learn more about and invest more in alternatives.This is a more risk-seeking demographic.” In second place is sustainability, ESG and impact investing, from climate change to social justice. “What I find really interesting is that now we have clients coming to us and saying, ‘What are you doing, Goldman Sachs, to help further what I care about?’.” Also of interest are nontraditional assets, such as art, collectibles and crypto.
Bloomberg Intelligence Presents: The Race to EV Dominance
Billed as a “drive of the future,” Kevin Tynan, Senior Automotive Analyst, Bloomberg Intelligence, did not disappoint with charts, insights and predictions as things shake out in the electric vehicle domain. “The disruptors are due for disruption,” he said, noting that Tesla had surpassed GM in valuation around 2017, and actually peaked just over a year ago. Detailing aspects like tax credits, rebates and infrastructure investment as they factor into the U.S.’s low EV sales rate, “We’re not at 6% here because EVs are not competitive. It’s because they’re not profitable.”
Invesco QQQ Sponsor Spotlight: Applying Innovation
Ryan McCormack, Senior Factor & Core Equity Strategist, Invesco quantified innovation, “the most overused word of 2021.” Companies that are always ahead of the curve, essentially the NASDAQ 100, make long-term commitments to spend more on research and development, which has fostered a culture of innovation. Invesco also analyzes patent filings over a one-year period. During the year prior to May 31, 2022, the companies in QQQ filed over 25% of the patents around disruptive technologies, like big data, cloud computing, cybersecurity and 3D graphics. “They’re very active in this space of themes and ideas that are just coming into fruition now, or that are just starting to become a large part of our daily lives.”
Adding Value in Portfolios Through Tech
The future for a company with its genesis in technology is going to be about the analysis itself; looking at diverse data across different types of asset classes that are not yet developed, said Sharmila Kassam, VP & Head of Asset Owner Solutions, Nasdaq. “I look forward to spending just as much time as we’re talking about the technology developments, to talking about what we’re doing with the impact of that.” She spoke to Nasdaq powering over 130 stock exchanges around the world, and thinking about future management from a very global and inclusive perspective.
Illustrating the striking differentiators of the new, tech-minded generation, Brooke Forbes, Chief Information Officer & Head of Technology for Personal Investing, Fidelity Investments said her firm recently allowed a much younger class to open accounts (with adult co-managers), “something we wouldn’t have even thought about at 14 or 15.” That generation is also coming up with new demands. “You’re now seeing investors looking for certain types of impacts they can do; anything from investing in diversity to governance.” She noted Fidelity’s recently launched crypto platform is driven by a demand for choice, in both investments and channels.
On challenges that lie ahead and what their business evolution will look like, Vincent Costa, Co-Chief Investment Officer, Equities, Voya Investment Management. “It’s not only importing and developing new technology to help our clients weigh the terms of our investment performance, it’s about how we utilize that technology across the whole platform.” They think a lot about how that may evolve, “in a world where we might have virtual analysts sitting next to human analysts.”
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