Generation Next - Millenials Primer

Thematic Investing: Generation Next - Millennials Primer

·  Millennials: 2bn aged 18-34Y globally, emerging as #1 source of global income, wealth & spending

·  Entry points: 1) Tech; 2) Consumers; 3) Food & Drink; 4) Education; 5) Housing; 6) Financials; 7) Women; 8) Sharing Economy

·  Playing the Millennials theme: 250+ global stocks & 125+ primer picks

• A Transforming World: Millennials

As part of our work on A Transforming World, we introduce a new people-focused theme in this Primer and a Primer Picks report; we set out the challenges and opportunities offered by the Millennials theme. 

Millennials: #1 global and US demographic   

We define Millennials (aka "Generation Y") as the demographic cohort born post-1980 (aged 18-34Y). Globally, there are c.2bn Millennials, with 86% living in EMs. In the US, Millennials (c.75mn) are set to overtake the Baby Boomers in 2015 as the largest living generation. While the US Boomer demographic is ageing and shrinking in size (cf. our Silver Dollar report), the Millennials generation continues to grow, driven by immigration, peaking in the US only in 2036E at 81.1mn.  

#1 income & wealth: $8.3tn by 2025E in the US alone 

While the Boomers have accumulated wealth and currently lead consumer spending, Millennials are emerging as the new dominant source of both. They are the #1 workforce demographic in the US and account for $1.3tn in direct annual consumer spending, which will grow as their annual income reaches $8.3tn by 2025E in the US alone. They are also set to benefit from the "Great Transfer", the c$40tn+ of assets that will shift from US Boomers to Millennials over the next generation. Globally, Millennials will account for 75% of the workforce by 2025E, with women Millennials becoming an increasingly important economic force. 

Disruption: autos, dining, finance, media, tech and travel   

Like every generation, Millennials display generalised and unique traits, clichés, and contradictions that are key to understanding their role as a force for creative disruption. In our view, these include 'adventure', 'collaboration', 'connected', 'digital', 'diverse', 'educated', 'international', 'liberal', 'me', 'now', 'sharing', 'sceptical', 'social', 'special', and 'values'. Areas poised for disruption in the next three to five years include accommodation, autos, eating out, finance, media, technology, and travel.  

Eight major entry points for investors 

We highlight eight entry points for investors wishing to play the Millennials theme: (1) Technology; (2) Consumers; (3) Drinking, Dining and Health & Wellness; (4) Households; (5) Financials; (6) Education; (7) Women; and (8) Sharing Economy. 

BofAML Global Millennials Stock List & Primer Picks 

We present a list of over 250 global stocks covered by BofAML that have exposure to the Millennials-related theme. Our Buy-rated stocks with material exposure to the theme are detailed in an accompanying Primer Picks document, as is our full stock list. 

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