A new report from Schwab Asset Management showed dissimilar risk appetites among different generations of investors, with younger investors favoring bonds and older investors more heavily weighted on the equity side.

The annual study, which was published Thursday morning and based on surveys of 2,200 investors, showed that millennials continue to express higher levels of interest in fixed income, with 44% planning to increase allocations to fixed income in the coming year. That compares to 34% of Gen X investors and just 26% of Baby Boomers.

David Botset, managing director, head of Innovation and Stewardship at Schwab Asset Management, said the generational investing patterns illustrate both increasing investor sophistication and an opportunity for financial advisors to offer guidance.

“It is a bit counter to what you would expect, but in the case of millennials it could say something about where they are in their investing history,” he said. “Maybe they are not yet in their peak earning years, and they want more stability in their portfolio.”

The other potential reason for such a big appetite for fixed income among younger investors, Botset said, is “you have to consider where they are allocating their non-fixed income portion.”

“Younger investors have a much greater interest in crypto and leveraged and thematic strategies, which can demonstrate more volatility,” he said. “So, the fixed income can represent more stability in the portfolio.”

When asked about investing strategies over the next year, 62% of millennials listed cryptocurrency ETFs, compared to 44% of Gen X investors and 15% of Boomers.

A full 25% of millennial respondents, 17% of Gen X investors and 11% of Boomers will be Investing in alternative strategy ETFs in the next year.

And 29% of millennials plan to invest in smart beta ETFs in the year ahead, compared to 14% of Gen X investors and 10% of Boomers.

Botset said the study showed that “Boomers might be over-allocated to equities and perhaps should be thinking about derisking their portfolios as they get closer to retirement.”

Investors Prioritize Fees, Asset Managers' Record

Across the board, low fees continue to represent the most popular factor when it comes to investing in ETFs, but the track record of the portfolio manager is a lot more important this year than it was last year.

Asked to list factors that are extremely important when choosing an ETF, 57% of respondents cited total cost, about the same as in last year’s survey.

Other top factors when choosing an ETF were how well the ETF tracks its index, total return, reputation of the ETF provider and the experience and track record of the portfolio manager.