Asset managers clearly think millennials matter: journalists’ inboxes are being flooded these days with research reports and polls by the likes of Blackrock, Schroders, Legg Mason and others who desperately try to discover what makes them tick.
What’s a millennial?
The first difficulty they encounter in trying to do this, however, is an age-old problem: it’s very hard to strictly define a generation by age, and millennials prove no exception to this rule. Asset managers use wildly different categorisations: Blackrock comes up with the narrowest definition, classifying a millennial as someone aged between 25 and 34. Schroders casts the net wider, seeing everyone between 18 and 35 as a millennial. Legg Mason goes even further, regarding every investor under 40 as a millennial.
A colleague of mine came up with a solution for the definition conundrum, suggesting millennials are simply those who turned 18 after the turn of the millennium. That’s an interesting point, as it purports that every person to become an adult should from now on be considered a millennial. This implies that at some point time, when the babyboomers have long died out, everybody will be considered ‘millennial’.
This may sound like an attempt to ridicule the concept, and in part it is. It’s true that today’s young people are very different from the older generations, but that doesn’t make them a generation in the same sense as the babyboomers were. In fact the only thing the different age cohorts of the so-called millennial generation have in common is that they are digital natives. And this is exactly the point that matters.
In fact, the value of the research into ‘millennials’ that was conducted by the likes of Schroders and Legg Mason is doubtful. They both found that millennials are risk averse and have a short-term investment outlook, which doesn’t match their elevated return expectations.