Why Millennials Like ETFs

Exchange-traded funds are quickly becoming the go-to investment choice for millennials.

According to Charles Schwab, over 60% of millennials have either begun replacing or begun considering replacing their individual securities with ETFs, reports Taylor Nicole Rogers for TheStreet.

Looking ahead, with more employers adding ETFs to their 401(k) plans, it is becoming even more likely than ever that millennials will steer toward ETFs.

Related: Why Aren’t Millenials Investing?

Millennials have exhibited an increasing preference for ETFs due to the investment tool’s low price. Some ETFs come with annual fees of as low as 0.04%, providing investors with broad exposure to hundreds if not thousands of company stocks at a dirt cheap price.

Millennials Look to Costs First

“Millennials are part of the Napster generation where things are generally free or very low cost,” Ryan Marshall, certified financial planner at ELA Financial, told TheStreet. “The conversations I have with my millennial clients generally all start with fees as their topic. Not how much money they should put away, not how their investments works, but what the cost is.”