Banking on where Millennials will put their money

May 6, 2015

Millennials are famous for disrupting many of their parents’ institutions, but they may be fairly traditional investors.

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As this Reuters graphic shows, according to the Pew research Center, millennials now number 75.3 million, slightly edging baby boomers for America’s most populous generation. The number of Americans in their early-30s will soon be higher than at any time in history, and for many this coming of age will arrive with a number of adult life’s traditional trappings — and a predicted $7 trillion in spending power by the end of this decade.

Working from the belief that millennials aren’t really that much different than past generations, Smead Value Fund’s Bill Smead is betting on twentysomethings’ emergence into parenthood, devoting two-thirds of his portfolio to companies that will cater to the parents of Generation Z. Companies like Gannett, JP Morgan Chase and Berkshire Hathaway line his fund, present under the philosophy that family life makes formerly unsexy concepts like banking, home ownership and community interest suddenly appealing.

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