Gen Z Is Reshaping Investment Trends

In past decades, the stock market was mainly the playground for people in their late adulthood. It was largely limited to affluent, high net worth individuals due to barriers imposed by traditional stockbroker service models.

Then, over the past decade, things began to change: the rise of digital applications, reduced transactional costs and advancements in the information age have significantly altered investment habits. More Gen Z South Africans began investing early, often starting with amounts as modest as R100 in an ETF. They redefined the approach to entry-level investing. Gen Z is the fastest-growing cohort of new investors worldwide. They are twice as likely as Millennials to start investing early, and five times as likely as Boomers.

Data from Standard Bank’s share trading platforms shows that while 18 to 29 year olds still make up a smaller investor base than older groups, their numbers are steadily rising. Even among those under 25, an age where market participation is usually low, there is already a noticeable cohort. Activity increases further in the 25 to 29 year old bracket.

This suggests young people are moving from curiosity to actively building portfolios as they start earning.

“Although the overall base of Gen Z investors remains modest compared with older age groups, the fact that thousands are already active on trading platforms is notable, says Nivedna Maharaj, Head of Global Markets Retail Investments at Standard Bank.

She adds that while younger investors typically hold smaller positions, their participation reflects a growing understanding of long-term investing.

What dominates Gen Z portfolios?

An analysis of stock‑market activity among more than 3,000 Gen Z investors (18–29) showed a clear trend: a strong preference for ETFs. Over half (54%) of Gen Z holdings on Standard Bank’s online trading platforms are in ETFs, far higher than traditional portfolios, which usually mix individual shares across sectors and geographies.

“ETFs align almost perfectly with the values and behavioural trends we’re seeing in this generation. They want transparency, low cost, diversification and with ETFs they can easily obtain those objectives,” Maharaj.

The same trend appears among young investors at 1nvest. Lungile Macuacua, portfolio analyst at 1nvest believes that accessibility is another major drawcard towards ETFs.

“The minimum investment is very low. That removes the psychological and financial barriers that deterred earlier generations. So, young investors see an opportunity to own a portion of the S&P 500 for example, with just a R100 investment, giving them instant exposure to hundreds of companies,” she adds.

Macuacua says Gen Z portfolios tend to reflect two converging worlds: the South African economy they’re growing up in, and the global digital landscape they inhabit daily. “Their holdings commonly span financials, retail and consumer-facing businesses. Their ETF preference shows up here too. When they want exposure to resource companies, many choose a RESI ETF for broad sector exposure in one product,” she adds.

Beyond local markets, Gen Z investors are increasingly looking outward. The platforms and technologies that define their daily lives – from AI tools to e-commerce or TikTok – have become natural entry points into global investing. The question is no longer just “what should I invest in?” but “how do I get a stake in what I already use?” Investment choices, in this sense, are becoming an extension of consumer identity.

This trend was evident during 1nvest’s recent tax-free investment campaign, many Gen Z investors opted for the 1nvest S&P 500 Info Tech Index Feeder ETF, an info tech focused ETF providing access to major U.S. companies such as Nvidia, Microsoft and Apple.

Why investing young can be powerful

Gen Z has grown up fully online, exposed early to FinTok and other edutainment content explaining concepts like compounding.

“Gen Z is proving a timeless principle: starting early gives compounding the time it needs to quietly multiply your returns,” says Macuacua.

She notes that time is a powerful advantage for young investors, as small, steady contributions can grow significantly over decades. However, many still prioritise short term goals, which can limit the long-term benefits. Macuacua also warns that social media is a double-edged sword; it can just as easily be a source of misinformation and “get rich quick” narratives as a credible source of financial guidance. Young investors are therefore encouraged to seek out reliable, education-led advice, ensuring their decisions are grounded in fundamentals and oriented towards sustainable long-term investment growth.