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Millennials Invest in Robotics to Fund Retirement

Robotics proved the most popular SIPP pick for millennials, while baby boomers were more capital preservation focused

David Brenchley 7 March, 2018 | 2:03PM

robots, SIPP fund picks, investment trusts

Millennials and baby boomers have very different time horizons when it comes to pension saving, and their self-invested personal pensions (SIPPs) portfolios reflect that.

Data for Morningstar from The Share Centre shows the two generations took distinct approaches to investments in the 2017/18 tax year. Millennials, investors aged 18 to 36, were more adventurous with their fund selections. Baby boomers, investors aged 60 plus,  took more of a cautious approach.

Millennials Fund Picks

The Pictet Robotics Fund was the top fund amongst the younger generation. The fund was launched in November 2015 and has returned around 75% since inception.

The Nick Train-managed Morningstar Gold Rated Lindsell Growth & Income (FGT) was also popular. The trust is seen by Morningstar’s Randall Goldsmith as a core holding for UK equities. Train takes a buy and hold approach, so keeps turnover low.

Millennials were much more willing to utilise tracker funds, with four in the top 10 compared to just one for baby boomers. Unsurprisingly the millennials plumped for versions with higher equity weightings.

The Vanguard LifeStrategy 100% Equity and Morningstar Gold Rated Vanguard LifeStrategy 80% Equity Funds were high up, followed by Vanguard’s Bronze Rated FTSE Developed Europe Ex UK Fund and the Silver Rated L&G UK Index Trust.

Dale Nicholls’ Fidelity China Special Situations (FCSS) and JP Morgan Japan Smaller Companies (JPS) featured on the list. Completing the list was the BlackRock European Dynamic Fund, and Rathbone Ethical Bond, which added some responsible fixed income exposure.

Baby Boomers’ Fund Picks

The older generation focussed more on capital preservation, a prudent approach as they are either approaching or in retirement.

The more cautiously run Morningstar Silver Rated Newton Real Return, which targets an absolute return with minimal volatility; and Temple Bar (TMPL), run with a value bias, take the top two spots.

But some more racy options were in demand, including fellow Silver Rated BlackRock World Mining Trust (BRWM). It has underperformed both its benchmark and Morningstar Category over five and 10 years, but performance has improved in the past year.

Returns from Legg Mason IF Japan Equity, also on the baby boomers' most popular list, can be extremely volatile year-to-year, not ideal for those with shorter-term timeframes. But longer-term performance holds up and Japan is currently in favour.

The Gold Rated Fundsmith Equity, run by Terry Smith, is in fifth place, alongside high yielding infrastructure trust HICL (HICL).

The only passive fund on the list is Vanguard FTSE All-Share IndexJupiter Corporate Bond for fixed-income exposure, Jupiter European, and the globally focused Monks Investment Trust (MNKS) make up the top 10.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
BlackRock European Dynamic D Acc595.50 GBP-0.03
BlackRock World Mining Trust plc389.50 GBX0.65
Fidelity China Special Ord254.50 GBX0.20
Finsbury Growth & Income Ord750.00 GBX-0.27
Fundsmith Equity T Acc3.61 GBP-0.18
HICL Infrastructure Company Ord142.70 GBX0.21-
JPMorgan Japan Smaller Cos Ord440.00 GBX2.33
Jupiter Corporate Bond I Acc64.21 GBP-0.03
Jupiter European I Acc2,275.23 GBP-0.23
L&G UK Index Trust I Acc294.50 GBP0.10
Legg Mason IF Japan Equity X Acc4.65 GBP-1.30
Monks Ord810.00 GBX0.25
Newton Real Return GBP Inc2.79 GBP0.01-
Pictet - RoboticsI GBP125.11 GBP-0.11-
Rathbone Ethical Bond I Inc98.99 GBP-0.08
Temple Bar Ord1,238.00 GBX1.14
Vanguard FTSE Dev Eurp ex UK Eq Idx Acc247.88 GBP0.10
Vanguard FTSE U.K. All Shr Idx UT Acc193.96 GBP0.26
Vanguard LifeStrategy 100% Equity A Acc203.55 GBP0.18
Vanguard LifeStrategy 80% Equity A Acc189.61 GBP0.14
About Author David Brenchley

David Brenchley  is a Reporter for