A gimmick ETF that millennials are going to want to own

A gimmick ETF that millennials are going to want to own

A gimmick ETF that millennials are going to want to own Millennials are about to be able to invest in one of their favorite things: themselves.

As companies from every industry trip over each other to appeal to a generation of 18-to-33-year-olds, we can all look forward to an exchange-traded fund focused on this very demographic as ETF provider Global X just filed for the first millennial generation ETF, according to ETF.com.

The Global X Millennial Generation ETF plans to invest in companies involved in social media, digital media, e-commerce, mobile technology, healthy lifestyles, travel, leisure, and the sharing economy, according to its prospectus. There is no word yet on the actual stocks in the index, but it's not hard to imagine it will include such companies as Netflix, FitBit, Twitter, and Lending Club, plus maybe even some companies benefiting from the growing army of millennial parents, such as Target, Hasbro, and Carter’s.

As gimmicky as this ETF may seem, it has potential as millennials are the largest generation in U.S. history and will inherit an estimated $30 trillion. Wall Street is already targeting them, so why not ETFs? In fact, millennials are the generation that reports the highest use of ETFs already; nearly 40 percent of the age group reports owning ETFs, compared with just 21 percent of Generation X and 12 percent of baby boomers, according to a recent Cogent study.

Millennials weren’t the only generation targeted in the Global X filing. The firm also set its sights on baby boomers with the Global X Aging Population ETF, which will target companies that provide goods and services aimed at the oldest quartile of the population and will include exposure to health- care and consumer products. Despite being a bit darker, this is also is a monster trend that many think will help drive the economy in the future.

Neither of these generational ETFs have been given tickers yet, but LOL and WTF are available and would be fitting on two levels for the millennial fund. Meanwhile, OLD also has yet to be claimed and would be well suited for a fund based on baby boomers, setting the stage for a potential OLD vs. YOLO trade.

Never before has an ETF issuer attempted to slice up the market by generations, though there is nothing new about thematic ETFs, especially for Global X.

Some of Global X’s most successful ETFs are thematic funds, including the Global X Social Media ETF (SOCL) and the Global X Guru Index ETF (GURU), which both have more than $100 million in assets. On the flip side, it has also had some big-time thematic flops, such as the Global X Farming ETF (BARN), the Global X Waste Management ETF (WSTE), and the legendary Global X Fishing Industry ETF (FISN)—all of which are now liquidated.

Other themes that were included in this massive filing by Global X included a 3D Printing ETF, Education Technology & Innovation ETF, a Nanotechnology ETF, a Digital Media ETF, and an Urbanization & Smart Cities ETF.

In case you are wondering, there was no mention of a Gen X ETF in the filing. Ignored as usual, it’s just something else to fuel that generational angst. 

Bloomberg News
Eric Balchunas