When the S&P plummeted 34 percent to its COVID-19 low last March, most investors were rattled.

Millennials? Not so much, says Bill Capuzzi, CEO of Dallas-based Apex Clearing: “It is incredible that since the beginning of the year, in the face of persistent pandemic-related volatility, the number of millennial investor accounts across our client platforms has doubled. They’re definitely bullish in the face of uncertainty.”

Apex Clearing CEO Bill Capuzzi [Photo: Apex Clearing]

As they bought the dip, millennials crowded into tech stocks, helping drive markets to new all-time highs.

Apex has been right in the middle, helping companies like Stash, SoFi, Firstrade, and Ally Invest deliver commission-free stock trading on easy-to-use mobile apps. (As a custody and clearing company, Apex ensures that trade orders are executed, minimizing the risk of theft or loss.) Apex also worked with millennial fave Robinhood from 2013 to 2018, before Robinhood took its clearing in house.

“If you have a smartphone and a few bucks, you can download a trading app and start investing in minutes,” Tricia Rothschild, president of Apex, told Dallas Innovates. “Millennials have come of age during a time of technological advancement, globalization, and economic disruption.”

That’s led to key trends, according to Apex’s just-released “Millennial 100” Q3 report:

• Tesla dethrones Apple as millennials charge into EVs. Tesla jumped to the No. 1 spot on Apex’s list, which Apple had led for four straight quarters. Younger investors didn’t just go for Models 3, Y, and X—they also poured money into China’s NIO (No. 12), which shot up over 150 percent in the third quarter. Millennials also invested aggressively in electric vehicle SPAC, or special purpose acquisition company, stocks like SHLL (No. 27), which is set to merge with Texas-based Hyliion, an electric powertrain solution for Class 8 commercial vehicles, and SPAQ (No. 24), which plans to bring EV-maker Fisker public. (SHLL and SPAQ didn’t even appear in the boomers’ Top 100, says Apex.)
• COVID-19 shakes up portfolios. Sure, plug-ins are hot. But millennials are plugged into the news cycle too. In the race for a vaccine, they’re placing their bets on Moderna (No. 38), Johnson & Johnson (No. 41), and Pfizer (No. 59). Other “new normal” favorites include Zoom (No. 21), Draftkings (No. 46), Docusign (No. 51), Peloton (No. 53), and Teladoc Health (No. 69).
• When stocks split, investors grab ’em. Apple’s 4-for-1 and Tesla’s 5-for-1 stock splits this summer lowered their share prices—making them more accessible to investors. Boomers, Gen X, millennials and Gen Z all piled in, making the two stocks among all their top three picks. The percentage of Tesla stock holdings across Apex partner platforms nearly doubled across each generation in Q3. Surprisingly, boomers showed the most enthusiasm for Apple, with the highest weighting among any generation (21.7 percent).
• Fractional share trading had a major jump. “In the third quarter, we saw another major jump in fractional share trading, to the tune of roughly 54 percent of all trades made across partner platforms,” said Rothschild. “While it’s a significant jump, it’s really of no surprise to us at Apex Clearing—this technology has truly democratized investing. Thanks to fractional trading technology, retail investors can better diversify their investing strategies, with access to higher-priced stocks that are trading in less than a whole share to better suit their financial situation.” 

Rothschild believes that millennials “care about stocks in a different way,” investing in what they know and buying stock in companies that align with their personal values and experiences, rather than relying solely on a company’s balance sheet.

Apex Clearing President Tricia Rothschild [Photo: Apex Clearing]

“Our goal is to provide frictionless investment access so that anyone, regardless of their level of capital, has the ability to invest,” said Rothschild, who joined Apex in July, following her role as chief product officer and co-head of global markets at Morningstar.

“Apex Clearing was one of the first companies to digitize the activities associated with securities clearing and custody to give financial service providers the speed, efficiency, and flexibility needed to deliver better investor experiences,” she added. “With digital wealth management, we’re able to change the way investors think about their overall financial health and improve their capacity to manage their money on a day-to-day basis.”

Rothschild sees DFW becoming a bigger and bigger player in the financial marketplace.

“Absolutely. For several years there have been up and coming local fintechs gaining attention and now you have Robinhood moving in (to Southlake),” she said. “There’s also the Schwab/TD deal, which finally closed, and there are reports of shifting their HQ from San Francisco to DFW. To have some of the biggest names in the industry opening offices in Dallas is definitely something that won’t go unnoticed.”

Apex has roughly 350 employees, mostly in its downtown Dallas headquarters, along with offices in New York, Chicago, Los Angeles, and Portland, OR. In addition to its 50 percent client base of disruptive fintechs, Apex also delivers its proprietary enterprise-grade technology to more traditional advisory/wealth management and institutional firms—including Prudential, Goldman Sachs, Capital One, and John Hancock.

Beyond its custodial role, Apex offers what Rothschild calls “an extensive range of technical solutions that support the critical functions needed to run modern investment companies.”

A subsidiary of Chicago-based capital market giant PEAK6, Apex was formed in 2012. To create its Millennial 100 list, Apex analyzed over 1.5 million U.S.-based trading accounts, with an average age of 31 and average account size of $2,700. See the full list of Apex Millennial 100 stocks by clicking here: https://go.apexclearing.com/apex-next-investor-outlook-q32020-top100