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Millennials — people born between 1980 and 2000 — are being closely followed by the investing world. After all, this cohort seems to be a key growth driver of the U.S. economy, outpacing baby boomers in 2015 and reflecting over a quarter of the nation’s population.
According to a study by American Express, millennials will make up 75% of the global workforce by 2025 and already form the largest generation in the workforce in Europe and the United States, necessitating organizations globally to adjust to their more purpose-driven attitude, per an article by Pictet posted on CNBC.
Not only this, millennials are likely to inherit as much as $68 trillion from their parents, per a CNBC article. And compared to previous generations, they have way more choices to diversify and invest this huge inheritance. Businesses that will likely benefit from their habits could offer solid returns to investors.
Are Millennials the “Generation Green?”
Millennials are eco-friendly to the extent of tweaking their shopping patterns to go green. And some of them are even willing to pay more for eco-friendly products versus their low-priced alternatives. Increasingly termed as “Generation Green,” millennials and Gen Z demonstrate environmentally and socially-conscious consumer behavior, per a Capgemini report. According to a recent Ernst & Young report, 53% of Millennials and Gen Z say that sustainability is important to them when making purchase decisions.
iShares Global Clean Energy ETF ICLN and iShares ESG MSCI U.S.A. ETF ESGU are some of the ETFs that should gain from millennials’ growing presence in the job market.
Investors should also follow green real estate ETFs like iShares Environmentally Aware Real Estate ETF (ERET) and Global X Green Building ETF GRNR.
Healthcare Boom Ahead?
Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, says from an investor’s standpoint, the health theme runs a range of opportunities from health preservation and disease prevention to care service delivery and treatment. Hence, we may see an uptick in healthcare-related ETFs like Health Care Select Sector SPDR Fund XLV.
Home Buying: Millennials’ Preference
Though the percentage of millennials staying with their parents has risen over the years, many millennials are now reaching their prime home-buying age of 30 to 35 years. This could drive sales for homebuilding companies.
John Lovallo, home builder analyst for Bank of America Merrill Lynch noted “in 2025 there are going to be 3 million more millennials than baby boomers at their peak in 1987,” which could propel the home-buying industry. SPDR S&P Homebuilders ETF XHB could thus benefit to a great extent.
Broader Technology: A Sweet Spot
Millennials are known for their obsession with technology. Nearly 100% of millennials use the Internet, according to 2019 Pew Research Center data, and 19% are smartphone-only Internet users. That’s more “smartphone-only” people than in the three other generations surveyed, as quoted in a Forbes article.
According to NielsenIQ, two-thirds of consumers are amending their consumption habits in favor of a lower environmental impact. Deloitte’s “Using blockchain to drive supply chain innovation” describes many benefits of using blockchain, as indicated by Pictet Wealth Management’s report.
The article also says that blockchain brings increased traceability of material to ensure that corporate standards are met. It improves compliance on outsourced contract manufacturing, and it results in reduced overhead costs. The number of smart devices connected to the internet of things jumped from 7.74 billion in 2019 to 11.57 billion in 2022. And this number is expected to more than double to 25.44 billion in 2030. Global X Internet of Things ETF SNSR should be watched closely.
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Health Care Select Sector SPDR ETF (XLV): ETF Research Reports
SPDR S&P Homebuilders ETF (XHB): ETF Research Reports
iShares Global Clean Energy ETF (ICLN): ETF Research Reports
Global X Internet of Things ETF (SNSR): ETF Research Reports
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
Global X Green Building ETF (GRNR): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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