In the upcoming decade, the customization of investments is gaining increasing significance. Several key trends can be identified in this context:
Direct indexing. The concept of direct indexing is not new; however, advancements in technology are simplifying the process and making it accessible to everyone. The distinction between direct indexing and traditional ownership of shares in mutual funds or exchange-traded funds lies in the ability to customize your index based on personal rules and preferences. This allows investors to exclude assets from companies whose philosophies and values contradict their own.
ESG investing is set to gain momentum as younger investors enter the scene. Experts estimate that, over the next decade, the incomes of Generation Z individuals will quintuple. Moreover, these young investors are significantly more inclined to invest in alignment with their values compared to older generations, partly due to the previous lack of options. Today, tools for assessing companies through an ESG lens have become more sophisticated, facilitating their application.
Structured notes and similar products enable investors to set parameters for their assets, determining potential returns and loss protection. There are substantial growth prospects in this area, spurred by technological advancements.
