Seventy-four percent of Millennial advisers think the current market volatility will settle down by the end of the year, compared with just 43% of all other advisers, according to a survey by Eaton Vance. While 56% of other advisers think volatility is the “new normal,” only 26% of Millennials think so.
Forty-percent of Millennial advisers believe
volatility is part of the investment process, and 30% believe it presents an
opportunity to generate income. In fact, 40% of Millennial advisers say the market volatility has helped them gain new clients.
Forty-one percent of Millennial advisers think the Federal Reserve is the biggest driver of market volatility, compared with 23% of advisers from other generations. On the other hand, 27% of non-Millennial advisers think stalled economic growth is the major driver of market volatility, compared with 11% of Millennial advisers.
Other big drivers of market volatility, Millennial advisers say, are turbulence in the Chinese economy (28%), instability in the European Union (12%), sluggish economic growth in the U.S. (11%), and geopolitical issues (8%). Nonetheless, 38% of Millennial advisers are more confident in the U.S. economy than they were 12 months ago.
As to how they are grappling with market volatility, 49% of Millennial advisers are turning to high-yield bonds, municipal bonds (42%), floating-rate bonds (40%), multi-sector bond funds (33%) and government bonds (23%).
Projecting out three to five years, 50% of Millennial advisers think a professional managed strategy will be key, 34% expect to lean on bond mutual funds, 12% look to bond separately managed accounts, and 6% are planning on laddered bond portfolios.