Millennials’ early adoption of decentralized finance is one specific area of impact. This age cohort recognizes the benefits of decentralized technology like blockchain, as it empowers consumers with independence, allowing them to regain control of their personal data, and offers financial inclusion for the unbanked. While there has been increased interest in cryptocurrencies since 2020, the market has yet to realize the broader opportunities blockchain can provide in transforming payments, contracts and consumption, which offer a compelling long-term investment opportunity for advisors to capitalize on for their clients.
In addition to the future of money, millennials are impacting the future of food as they incorporate sustainability into every purchasing decision they make. When grocery shopping, they are demanding more eco-conscious options such as plant-based and alternative protein. With over half of shoppers considering sustainability while buying groceries, we can expect to see a jump in new technologies like precision agriculture and agricultural robots that can help us make plant-based food production not only more efficient but also cheaper. And yet again, the market has yet to realize purchasing power from plant-based and alternative proteins, a trend that advisors should keep top of mind for their clients.
Helping Clients Own The Future Through Thematic ETFs
These powerful new trends in the future of industry, health care and consumption are here to stay and have already shifted the way we live and work. Undoubtedly, these themes have also opened the door to new, cutting-edge investment opportunities that fly under the radar. To harness this next wave of innovation, financial advisors should look to thematic ETFs that help capture the entire value chain. For example, the future of transportation cuts across no less than six sectors of the global economy—from automakers to self-driving software and sensors to EV batteries and charging systems. By owning a targeted basket of securities that are purposefully poised to benefit from the emergence of a theme—regardless of sector or geography—advisors can feel confident in knowing they have captured a theme’s entire value chain for their clients.
Financial advisors play a crucial role in helping clients get ahead of the “next big thing,” and what better way is there to outperform than proactively identifying the up-and-coming trends? Regardless of what trends comes our way, and how fast they unfold, thematic ETFs serve as a tool for advisors to help clients own the future through long-term investments and be at the forefront of cutting-edge innovation.
Armando Senra is head of Americas ETF and index business at BlackRock.