What virtues do millennials show

Happy to buy and digital: Millennials as an investment trend

Travel, shop, stream, enjoy life. Economically largely secure and grown up with digitization - these are the millennials. So the group that was born between 1981 and 1998 and whose average age is 28 years. This group is getting more and more into professional life, earning more and more of their own money and spending part of it again. Where does this money go? What is this target group acquiring? Which topics are important to these people? These are also questions that fund managers are investigating. You invest in those companies that are popular with millennials.

Search for opportunities

One of them is Laura Destribats. The portfolio manager at Goldman Sachs launched the Goldman Sachs Global Millennials Equity Fund five years ago. Investments are made worldwide. Destribats and her team are looking for companies that benefit from the behavior of millennials. Because this generation is also characterized by the fact that they often represent a stable consumer community through monetary support from their parents or through inheritances - but with their own will.

The topics of sustainability and raising awareness of climate change are strongly driven by millennials. "This group prefers a healthier lifestyle than others," explains Destribats. At the same time, however, it is also exciting that the growth opportunities - depending on the country - are very different. Because to say that millennials are digitized is only partially true, according to Destribats. The level of digitization is very different.

Different standards

While access to the Internet is almost standard in the western world, private access is not yet a matter of course in many developing countries. Therefore, the fund manager has different companies in this area that cover the area. From network developers to app providers, there is a wide range. "Different regions are developed differently," says Destribats.

In China, for example, the field of digital payments is well advanced. Using the mobile phone for payments is an established standard in the Middle Kingdom. Here again the West is lagging behind.

The corona pandemic has also hit millennials hard. Job loss, short-time work, crisis mode and a time marked by uncertainty do not stop at this target group either. But many trends - such as the tendency to shop online or have food delivered - were already established before that, according to Destribats. So some things were changed by the pandemic, but also some things were supported that the mid-twenties have already relied on.

Other generations would have had to catch up with the home office and the technology associated with it, however. According to the fund manager, this can also be seen in the fact that social media engagement has skyrocketed.

With its fund, Destribats does not only want to cover topics that millennials are now concerned with. It is also important to foresee how their behavior will change over time.

Thinking about the future

How will this generation behave as parents? How will your children be fed, what toys and what equipment will be important then? The areas of financial technology and renewable energy will also be in greater demand in the future. In the analysis for Destribats, the fact that millennials put a lot of emphasis on health and wellness was just as surprising as the tendency towards high-priced luxury goods.

The fact that the entire entertainment and adventure sector has suffered with the pandemic is not a major setback for Destribats. "It all comes back and then there is a big race to catch up in some areas," says Destribats. In the meantime, new fields have been established - such as augmented reality. (Bettina Pfluger, April 20, 2021)