The future of the fast-growing exchange-traded fund industry is probably secure, if millennial investors have anything to do with it.
According to a survey released Wednesday by Charles Schwab, millennials (ages 25 to 35) said ETFs comprise 41 percent of their portfolios on average, by far the most of any age cohort that includes Gen X, Baby Boomers and so-called Matures.
Indeed, ETFs seem to be a generational thing to some extent. For example, Gen Xers on average devote 25 percent of their portfolios to ETFs, followed by 17 percent for Boomers and 15 percent for Matures.
Meanwhile, 61 percent of millennials said they plan to boost their ETF investing in the next year, which is well above the 31 percent average for all four age brackets. In that vein, millennials are more likely to use stock-based ETFs instead of individual stocks, and ditto for fixed-income ETFs instead of bonds.
According to the survey, entitled 2015 ETF Investor Study by Schwab, 34 percent of the 1,000-plus respondents said ETFs will form the core of their investment portfolios in the future.
The moral of the story: unless young investors get scared away from ETFs by the trading snafus that afflicted some of these products during the August 24 mini-crash, ETFs are on their way to becoming a bedrock component in a large number of investor portfolios.