Merrill: Here’s how to tap into Millennials’ burgeoning influence
How to position your portfolio for the new economic powerhouse
While a seemingly never-ending debate simmers over whether Millennials feel entitled, or are as hard-working as their parents, one thing is for sure: The generation is evolving into a powerful economic force.
With a U.S. population of about 75 million, the generation is poised to overtake the baby boomers this year as the largest living demographic group, according to a note sent Tuesday by analysts at Bank of America Merrill Lynch.
The group, which is made of up people currently aged 18-34, accounts for some $1.3 trillion in direct annual consumer spending, a figure that will only grow as income among the group in the U.S. rises to $8.3 trillion by 2025, Merrill reckons. Still, at present, Millennials are spending less than their boomer peers. For example, data compiled by the investment bank suggest average annual expenditures among Americans age 25-34 were $48,087, compared to $55,892 for those in the 55-64 bracket.
Meanwhile, Millennials are already the biggest American workforce demographic, and by 2025, Merrill sees Millennials making up three-quarters of the global workforce..
Further, Merrill said the group is set to reap $40 trillion in asset transfers from the aging boomer set, in a phenomenon the investment bank refers to as the Great Transfer.
"We believe that the global dynamics of Millennials mean that the theme offers numerous growth opportunities for those with exposure," Merrill said in the note.
Here's a look at companies Merrill expects to have a "high" exposure to the generation in coming decades, spread across a handful of major industries.
Technology
DeNa | Facebook (FB) | Feiyu (1022.HK) | Gree |
IAC (IACI) | King Digital (KING) | Mixi | Naspers (NPSNY) |
Netflix (NFLX) | Pandora (P) | Tencent Holdings (TCEHY) | Youku Tudou (YOKU) |
Zynga (ZNGA) |
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Consumers
Asos (ASC.L) | Cabbeen Fashion | Fast Retailing (FRCOY) | H&M |
Inditex (ITX.MC) | LPP SA | OVS SpA (OVS.MI) | SuperGroup (SGP.L) |
Urban Outfitters (URBN) |
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Drinking, dining and health and wellness
Cookpad | GrubHub (GRUB) | Just Eat |
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Education
Anima Educação | Apollo Education (APOL) | Bright Horizons (BFAM) | Capella (CPLA) |
Chegg (CHGG) | DeVry (DV) | Estacio | G8 Education Limited (GEM.AX) |
Grand Canyon (LOPE) | Informa | Kroton (KROTY) | Pearson (PSO) |
Reed Elsevier (RUK) | SER (SEER3.SA) | Strayer (STRA) |
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It's worth noting, the list above contains a mixture of firms that trade in the U.S. (either directly or through ADRs), as well as on foreign exchanges. Market capitalizations also vary widely.
