Six unconventional millennial investments

Our recent article looking at the best and worst of millennial behaviour focused on three themes for millennials: gender equality, ethical and sustainable investing, and learning. But what other elements of millennial behaviour could be a factor in your investments success?

‘I’m very encouraged by millennials and their drive to make the world a better place.’
– John Mackey, CEO of Whole Foods Market

While we know that responsible investing plays a part in the millennial thought process when choosing an investment, or even a provider, thanks to First State Investments* – what other lifestyle choices are influencing their investment choices?

Read more on how millennial investors could be the revolution in sustainable investing

Goldman Sachs published a study back in 2015** looking at who millennials are and what makes them different from previous generations. It also explored the impact they have on the economy. The results of their research identified five trends that could shape the millennial economy: housing, marriage, access over ownership, wellness and digital retail. Let’s take a closer look at six Elite Rated funds, already embracing these trends:

 

1. Housing

Many millennials simply aren’t in a position to enter the housing market, but that doesn’t mean they don’t want to. An overwhelming 93% said they plan to buy a home some day** and, for those that can’t just yet – TM Home Investor is an option. As the only fund in the UK to invest solely in residential property it’s a good way to be a part of the housing market without necessarily buying your first home.

 

2. Marriage

Match Group, a holding in Rathbone Global Opportunities, owns any number of dating websites and apps – including Tinder. According to manager James Thomson, there are over 500 million singles in the world, with an estimated 5 million using paid services on Tinder. Over 50% of users are millennials.***

Whether by choice or by necessity, millennials are putting off these life milestones until later in life. In 1981, 43% of 18-31 year olds (Baby Boomers) were married and living in their own house. But in 2012, that figure had dropped to 23%.** Similarly in the 1980s, 71% of women aged 25 were having children, while in the 2010s, the figure dropped to 49%.**

One possible explanation? As Julia Hartz, co-founder of Eventbrite, said: “Millennials are the experiences generation.” It’s not uncommon to hear about millennials favouring travel or a gap year before looking for a partner to settle down.

In a relationship? Read about how to manage money as a couple.

3. Access over ownership

It’s not just housing and spouses millennials are reluctant to settle down with. Smaller milestones such as buying your first car are also low on the list of priorities for millennials. Public transport adds not only infrastructure, but in many cases jobs, to the economy.

For example, East Japan Railway, a top ten holding in First State Global Listed Infrastructure, will be a major provider of transportation for the upcoming 2019 Rugby World Cup and 2020 Summer Olympics in Japan. The company also has environmental issues on the mind, as it is increasing the efficiency of its trains and is looking to develop hybrid models.

 

4. Wellness

Wellness can mean many different things to many different people. From eating healthily, smoking less, to hitting the gym more. The millennial focus on wellness can impact many parts of the market from technology (hi, Apple Watch) to 24-hour gyms and leisure facilities. David Lloyd, a top ten holding in TIME:Commercial Freehold, embodies an overall wellness aspect mixing gym, spa, even beauty salons in select health clubs.

 

5. Digital Retail

Wellness is just one of the factors effecting millennial consumerism, according to Goldman Sachs’ study too. In 2011 the total apparel and footwear expenditure was 6% compared to 18% in athletic brands.** Traditional athletic wear and the trend towards ‘athleisure’ means brands like Nike and Adidas are increasingly popular. Both companies are holdings in T. Rowe Price Global Focused Growth Equity and Threadneedle European Select respectively.

*Source: https://www.firststateinvestments.com/uk/en/intermediary/about-us/responsible-investment/millennials-and-responsible-investment.html

**Source: https://www.theatlantic.com/sponsored/goldman-sachs-2015/millennials/497/

***Source: http://www.businessofapps.com/data/tinder-statistics/

The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.