It’s not all about Tik Tok videos when it comes to millennials. Consumer habits will shape the way the economy will function moving forward, such as a growing gig-focused labor market and a reliance on renting.
“Consumer behavior is changing. Economic circumstances have contributed to the decision of many millennials to postpone starting a family,” a PaymentsJournal report noted. “A greater focus on work-life balance has bolstered the gig economy and led to an increasing number of remote workers who seek flexibility and freedom. Heightened concerns about healthy living and the environment affect discretionary spending. The resale market has seen substantial growth in recent years as millennials and Gen Z consumers have demonstrated they are willing to rent rather than buy. They are renting everything from housing and furniture to tools, technology, sports equipment, clothing, and accessories.”
Exchange-traded fund (ETF) investors sensing an opportunity could consider the Global X Millennials Thematic ETF (MILN). MILN seeks to provide investment results that correspond generally to the price and yield performance of the Indxx Millennials Thematic Index.
In the case of MILN, the underlying index is designed to measure the performance of U.S. listed companies that provide exposure to the millennial generation, (collectively, “Millennial Companies”), as defined by the index provider. The millennial generation refers to the demographic in the U.S. with birth years ranging from 1980 to 2000.
Relying on Digital Payments
The article also noted that the coronavirus pandemic is set to change the way payments for goods and services are made. In particular, less dependence on cold hard cash.
“The global pandemic is likely to accelerate the adoption of digital payments as many reluctant people are now more willing to try it,” the Payments Journal report said further. “A recent study by RTI showed that 30% had tried contactless payments because of COVID-19, and 70% of those who tried it said they are planning to continue to use it after the current crisis.”
“The pandemic and society’s response is likely to shift the balance of payments, as consumers integrate lifestyle changes and alter the decision calculus of how to pay in a wide variety of circumstances,” the report added. “Cash and digital payments will continue to be essential partners. While cash utilization as a percentage of payments is trending down, the number of payments is on the rise, including cash payments which continue to climb.”
ETFs to look at in this growing space include the ARK Fintech Innovation ETF (NYSEArca: ARKF). ARKF invests in equity securities of companies that ARK believes are shifting financial services and economic transactions to technology infrastructure platforms, ultimately revolutionizing financial services by creating simplicity and accessibility while driving down costs.
For more relative market trends, visit ETF Trends.