Most Millennials, those between the ages of 22 and 37, are appropriately invested, according to new research by Vanguard. On average, they have 90% of their portfolio invested in equities, which is consistent with the glide path of the Vanguard Target Retirement Funds geared for people in that age group.
One-third of Millennials own target-date funds (TDFs), Vanguard found.
“Target-date funds are reshaping investors behavior of Millennial and Gen X investors, with the potential to improve outcomes over an investing lifetime,” says Jean Young, senior research associate for the Vanguard Center for Investors Research and author of the paper, “Risk-Taking Across Generations.” “Younger investors are benefiting from balanced, diversified portfolios and shifting away from extreme equity allocations that we’ve witnessed in the early years of previous generations.”
However, 19% of Millennials have no equities in their portfolios, up from 13% in 2012. Before the Great Recession of 2008, only 10% of Millennials had zero-equity portfolios.