A major global investment survey of millennials (generally seen as those aged 16-36) around the world has found that they have high investment return expectations but are conservative in their approach and considerably “short-term minded.”

The research for Legg Mason of 1267 millennials around the world found they expected an 11% annual average rate of return on their portfolios. US millennials have the most ambitious expectation at 14% on average while those in Europe expect far less at 8%. In spite of their expectations, the largest asset in the average millennial’s allocation entering 2016 was cash.

Global millennial average asset allocation going into 2016:

• 24% cash
• 19% equities
• 18% real estate
• 17% fixed income
• 9% non-traditional
• 9% gold/metals
• 4% other

US millennials were most likely to say they were conservative investors (78%), well beyond the global average of 61%. Millennial investors in Asia were most likely to consider themselves aggressive (46%).
More than three-quarters (78%) of global millennials admitted they have become more risk averse than one year ago.

Asked to define a “long-term” investment horizon, 35% of millennials said long-term was defined at 2-years or less, while 26% said 2-5 years, 25% said 5-10 years, and 13% said more than 10 years. Only those in Australia showed a longer-term bias, with 36% saying more than 10 years defines long-term investing.

Matthew Schiffman, managing director and head of global marketing for Legg Mason, said: “Millennials are clearly conservative investors and we wonder if history isn’t the reason why. My generation came of age as investors during the risk-on environment of the 1980s when we were rewarded for taking risk.

“However, my parents were depression-era kids whose memories left them extremely cautious investors. Like my parents’ generation, perhaps millennials’ conservative approach to investing has been defined by the history of their lives.”

Almost nine in ten (86%) global millennials said they invested on average 24% of their portfolios outside of their countries and 83% said they would be more focused on international investments in 2016 than they were in 2015. They see China, Russia, U.S, Japan and Mexico as the five countries with the highest investment risk.

When it comes to how they invest in equities, 91% of global millennials said they have equity investments in ETFs – with a high of 97% in the US and a low of 82% in Australia.

The top three investment goals of millennials around the world are:

• To enjoy a comfortable life (68%)
• Save for children’s’/family education (38%)
• Build a retirement nest egg (32%)