Impact investing is becoming increasingly “appealing” for retail investors in both the UK and the US, according to a study.
Global asset manager American Century Investments surveyed 1,003 US adults and 1,004 UK adults to better understand generational and gender-based attitudes toward impact investing.
It found 56% of US participants and 59% of UK respondents said investment that considers environmental, social and governance (ESG) factors or socially responsible investing (SRI), was either “somewhat” or “very appealing”.
For US respondents, this is up from 49% in 2018 and 38% in 2016.
Demographic change
Those aged 21 to 38 displayed heightened interest in impact investing in both the US and UK, at 65% and 72%, respectively.
According to the study, nearly two-in-five US millennials plan to invest within the next five years, compared to one-in-three UK millennials.
While slightly lower, 55% of those aged 39 to 54 in the US find it appealing, compared to 64% of their UK counterparts.
Appeal among baby boomers (ages 55 to 73) drops to 49% in the US and 46% in the UK.
Guillaume Mascotto , vice president, head of ESG and investment stewardship at American Century Investments said, “The findings of our study reaffirm that interest in impact investing continues to be on an upward trajectory across all age groups, but most importantly, it is encouraging to see that millennials are in the driver’s seat for impact investing.
“As this generation increasingly demonstrates a desire to align their positive intentions to address global pressing issues with their investment choices, it is crucial that we understand their values and preferences so that we can properly assess both opportunities and risks.”
Considerations
While “return on investment, risks, fees and length of time” are the top considerations when making investments, 64% of UK respondents said that “impact on society” is either “very or somewhat important,” compared to 57% of US respondents.
When asked to select causes that “matter most” to them, “healthcare/disease prevention and cures” topped the list with US and UK respondents at 30% and 35%, respectively.
This is consistent with the 2018 and 2016 results.
“Environment/sustainability,” ranked a close second among both the US and UK respondents.
Other selected causes in descending order included “improved education,” “mitigating poverty,” “gender equality” and “alignment with religious principles.”
“Regardless of whether you live in London, Tokyo or New York, quality healthcare and disease prevention are universal concerns,” said Mascotto.
