Stay in growth, holiday in value?
According to Kevin Murphy, co-manager of Schroder Income fund, there are two environments in which...
The Coronavirus continues to dominate the news headlines, WhatsApp chats and Facebook posts. It’s not just changing our conversations and daily routine, as more and more offices go remote, but it’s also shaking up millennial spending (or non-spending) habits.
Millennials may be less at a physical risk than older generations, but they’re already cutting back on their spending in the event of a coronavirus-related recession. While most people are worried about an economic slowdown, 54%* of US millennials recently surveyed said COVID-19 has impacted their purchase decisions – more than any other generation. And 40%* are cutting back on spending in preparation.
So, as we all start to hibernate at home and minimise social contact, how can investors benefit from millennials’ changing spending habits??
‘The reality is that the economic situation for millennials is not a good one.’ — Ryan Holiday, author
It’s been two days and I’ve already “caught up” on my TV – only to see that filming of Britain’s much-loved soaps has been suspended and episodes have been cut to just two a week…. What now? Netflix, a holding in Baillie Gifford High Yield Bond**, is a clear option, as is Amazon Prime video. For those who don’t already have the service, now might be the perfect time for a free trial…
Amazon, a holding in Rathbone Global Opportunities** fund, is a funny one, because it includes so many services. From next-day delivery, to video streaming with original content, and even music streaming. It’s easily one of my most-used apps in the last week, from ordering cleaning supplies to finding our next series to watch.
With Sainsbury’s, Tesco’s and Ocado delivery slots filled up until April in some cases, one alternative is meal-kit delivery services. Subscriptions such as Hello Fresh, the largest holding in RWC Continental European Equity***, take not only the stress of planning out of the equation, but they also ensure you’ll have meals at the end of a long work from home day — that is if you don’t eat it all during the day!
Not even a pandemic can get in the way of millennials ordering take out. Delivery Hero, a holding in Scottish Mortgage Investment Trust**, is a European-based online food-delivery service, which operates in 40+ countries.
And, if my husband is anything to go by, I have a feeling gaming subscriptions will also increase… While I will make use of my time doing something constructive, I think Microsoft – the top holding in Brown Advisory Global Leaders fund** – will benefit from his ability to relax the instant the Xbox controller is in his hand, and the possibility of quite a few weeks trying out some new games.
*Source: First Insight survey, March 2020
**Source: Fund factsheet, 31 January 2020
***Source: Fund factsheet, 28 February 2020