The workforce’s youngest generation also believes in the potential for active management to produce outperformance. More than three-quarters of the survey’s respondents, 78 percent, said that they believe active management provides incremental value.
Millennials are more open to alternative investing than their elders, while 83 percent of millennial respondents are interested in a broader approach to investing, including alternatives, only 52 percent of the respondents over age 55 said the same.
For AMG’s study, alternatives were defined as any investments outside of traditional stocks, bonds or cash.
More than half of the survey’s millennial respondents currently invest in alternative strategies, 69 percent said they wished they knew more about alternatives and 70 percent believe that a liquid alternative mutual fund would benefit their current portfolio.
Similarly, more than half of the millennial respondents, 56 percent, currently own actively managed mutual funds, and most, 94 percent, plan to maintain or increase their current allocations to active funds.
The findings conflict with previous studies that have shown millennials have large allocations to cash.
“Holding cash is an active investment decision, “ Finnegan says. “I believe that a lot of these folks are holding cash because they’re afraid of the potential tail risk that’s out there. At their age, they should be seeing potential market drops as a buying opportunity.”
According to the AMG Funds study, younger workers have an optimistic economic outlook, with 73 percent of the millennial respondents anticipating that the U.S. economy will improve and another 74 percent expecting U.S. equity markets to rise in the near term.
Should they be wrong, 73 percent of millennials said that they felt well-positioned for a market downturn -- yet 30 percent said they would either reduce their equity exposure or exit the market entirely in the event of a 20 percent drawdown.
Most millennial respondents, 86 percent, reported having a long-term outlook on their investments.
Millennials are also willing to pay for financial advice -- 60 percent of the respondents said they would pay more for oversight of their investments.
AMG Funds surveyed approximately 1,000 affluent individual households in its survey, including over 100 millennials ages 18 to 35, in September 2015.