Almost half of boomers, 48 percent, expected market returns to be lower than historical averages over the next two to three decades compared to 29 percent of millennials and Generation xers.
When asked about their retirement, on the other hand, the generational optimism was reversed: 61 percent of boomers expected that they would feel satisfied on the 100th day of their retirement, versus 40 percent of Generation x and 43 percent of millennial respondents.
When it comes to savings, millennials are learning the lessons of their elders -- 59 percent of millennial respondents had started saving before the age of 25, compared with 42 percent of generation X and 28 percent of baby boomers. Of all the generations, millennials were also the most likely to reach out to an advisor during market fluctuations.
Majorities in all three generations studied by American Funds said that they would like to generate alpha in their portfolios through the use of some actively managed products -- 69 percent of respondents overall said that by mixing passive and active funds, they could achieve better returns.
Yet American Funds’ survey found most investors unsure of how to distinguish between mutual funds. Nearly 80 percent of respondents couldn’t identify the link between attributes like low fees and high manager ownership as success factors for actively managed funds.
More than two-thirds of respondents, 67 percent, said that low fees and a track record of outperforming market benchmarks were important to them.
Most investors, 64 percent, said that they felt more comfortable investing in a fund where the manager’s own money is invested along side their own and agreed that those fund managers were more likely to do well for investors.
While most investors, 75 percent, also said they wanted funds that offered some downside protection, only 54 percent were aware that index funds generally exposed them to the full impact of volatility.
Baby boomers, at 36 percent, were the most likely to value a financial advisor's advice when selecting mutual funds. Less than a quarter of millennial and Gen X respondents said they consulted advisors before selecting mutual funds,
For the survey, 1,203 American adults were interviewed online in July 2016.