By Aisling Finn on Wednesday 7 October 2020
Investors chose health-based funds at the start of the pandemic before shifting back to popular tech investment options.
Money management app Plum saw a 180 per cent increase in investors between January and September of this year according to the latest figures.
The fintech, which uses artificial intelligence (AI) to learn about its users’ spending habits, also saw deposits on its platform skyrocket, increasing by five times between January and June 2020.
Thanos Bismpigiannis, head of product at Plum, added: “We’ve experienced rapid growth over the past year as more people choose to invest through Plum. Spending dropped during the COVID-19 lockdown, and when people saved more automatically, they then trusted Plum to help them grow that money.”
“Both the number of investment orders as well as the value invested with Plum has more than doubled since March.”
Unsurprisingly, investors on Plum’s platform favoured its health-based fund, The Medic, during the early stages of lockdown in March and April.
The Medic, which covers international health and pharmaceutical companies, started the year off strong, doubling in size in January.
Despite the strong performance, Plum claims that the health-based fund was a historically unpopular choice for investors on its platform.
The average age of Plum’s customers is 33, placing them at the tail end of the millennial age bracket (25-35 years old).
Just before Europe went into full lockdown, Plum’s one million-strong user base began to increase investments in its tech fund, Tech Giants, increasing the allocation by six per cent in February 2020.
Throughout March and April, as more users turned to the health-based fund, Tech Giants shrank by five per cent, only to jump up again from May onwards, growing 11 per cent.
Victor Trokoudes, CEO & co-founder of Plum, said: “Millennials are often named as the generation of no income, no job, no assets. Our data proves that for our investors at least, this stereotype is incorrect, as they have shown themselves to be savvy with their smart investment tactics during the Coronavirus pandemic.”
“In fact, it looks like our customers took lessons from Warren Buffett. They invested in things they know well, like technology, and were able to adapt quickly to events around them by investing more in our health fund.”
Plum seems to have also benefitted from the investment boom that occurred during the pandemic as people shifted to home working and had more time to spend working on their finances.
The figures from Plum also showed that its customers, while still investing throughout the pandemic, took time to consider their investments and not make impulsive choices, shielding them from the coronavirus-related market turbulence.