Gen Z buys shares and holds on, rarely sells

Research by Binance Research shows that Generation Z employs a remarkably disciplined investment style. The generation buys more than it sells, uses less leverage than millennials and is increasingly shifting towards ETFs. Of all Gen Z accounts with direct stock positions, 22% have never sold a share.

In brief:

• 76% of Gen Z bought more tokenized stocks on balance than they sold; 77% did the same with direct stocks
• Gen Z trades TradFi perpetuals an average of 13 times per month, much less frequently than older generations
• ETFs are becoming increasingly popular with Gen Z, at the expense of individual stocks

Gen Z buys and holds

Binance Research examined the investment behaviour of different generations on the platform. The results show that Gen Z behaves like a generation that builds wealth rather than trading actively.

Of all Gen Z users with a direct stock position, 22% have never reduced their portfolio. Furthermore, 76% bought more tokenized stocks on balance than they sold, 77% did the same with direct stocks and 60% expanded positions in TradFi perpetuals.

Fewer trades, less leverage

In terms of transaction numbers, Gen Z also shows restraint. On average, 13 trades per month are made in TradFi perpetuals, 8 in direct stocks and just 3 in tokenized stocks. By comparison, baby boomers average 19 trades per month in TradFi perpetuals.

Gen Z also remains more cautious than millennials when using leveraged products or inverse ETFs. This applies across all product categories. For tokenized stocks, 88.2% of Gen Z used some form of leverage or inverse ETF, compared with 84.5% for millennials. For direct stocks, that figure was 96.5% for Gen Z versus 95.5% for millennials.

ETFs gain ground among young investors

The most notable shift lies in the growing popularity of ETFs among Gen Z. In June, 18.5% of net inflows into stocks consisted of unleveraged ETFs; by July, that had already risen to 21.9%. In August, it declined slightly to 19.2%, while inflows into individual stocks fluctuated between 74.2% and 78.1% over the same period.

Gen Z was also the only generation in which the number of ETF holders grew, by 2.9%. This suggests that younger investors are gradually choosing diversified and less complex investment vehicles over selecting individual stocks.