Gen Z shifts to ETFs as risk appetite cools

Binance Research reports that Gen Z investors increased their use of ETFs during July as overall risk appetite cooled. Based on trading and account data through early August, ETFs rose to about 22% of Gen Z’s net equity inflows, up from 18.5% in June. While total net equity deployment fell 17.4% in July, ETF inflows declined only 2%. In parallel, ETF trading made up more of activity: ETF volume rose to over 21% of Gen Z equity volume from 14.6% in June. The ETF holder base grew nearly 3%, and Gen Z was the only generation showing growth in ETF holders. The report also challenges the stereotype of young traders as high-frequency, high-risk participants. Binance Research finds that one in five Gen Z direct-equity accounts has never sold, and 76% of bStocks accounts and 77% of direct-equity accounts are net accumulators (the highest among the studied cohorts). Gen Z also trades less often and shows limited appetite for leverage: in bStocks, Gen Z averaged three trades per month and 98.9% recorded no leveraged or inverse ETF activity. Leveraged products were over 9% of direct-equity turnover but only 3.9% of net inflows, implying more short-term use than long-term allocation. For traders, the key takeaway is a gradual move toward lower-leverage, ETF-based exposure rather than aggressive trading during a market slowdown.