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Aug 31, 2021

Investing For A Gen Z Future

by Rita Silvan
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Each generation is shaped by the major events—economic booms or busts, wars and pandemics—experienced in youth. These events imprint themselves, much like baby ducklings who follow the first large moving object they see and drive future thoughts and actions. As much as we like to think of ourselves as unique individuals, when you step back from the quacking flock common patterns emerge.

Boomers (1940-1959) experienced the post-World War II economic expansion of accelerated production which shapes their enthusiastic consumerism. Quirky Generation X (Gen X)(1960-1979), sandwiched between headline grabbing Boomers and Millennials, focus on status, while Millennials (1980-1994) seek out meaningful and novel experiences to reinforce their identity. Now as the oldest Millennials enter their forties, Generation Z (Gen Z) (1995-2010) moves into the spotlight, becoming adults by 2030. How this generation asserts itself will define how we all live, work, and invest.1

Gen Z are true digital natives—the first to use a phone without a cord, plugged into the internet and social networks from birth, and comfortable blending online and off-line worlds. According to a recent report from McKinsey, whereas previous generations consumed products and services for security or status, Gen Z is searching for authenticity, honesty, and inclusivity. Lest you conflate these values with Millennial-style idealism, think again. Having already experienced several major economic downturns, not to mention a global pandemic, Gen Z is fiscally conservative and pragmatic.2.3

Here are some key Gen Z trends that will shape society—and our investments—for the decades ahead:

Social Networks

Gen Z has access to vast amounts of information from both conventional sources such as mainstream media and educational institutions and, increasingly, from a myriad of global content creators and influencers, message board platforms like Reddit, and a variety of established and upcoming social networks. Recently we saw the power of social networks and chat rooms in driving up the prices of stock market “wallflowers” like GameStop, AMC, and Blackberry into the stratosphere, based on internet chatter and easy access to leverage, even for unemployed high schoolers, some of whom racked up enormous debts in the process. Some argue that Gen Z’s investing style should be added to the list of potential systemic risks.4

Gen Z like to be well-informed and to feel they’re in control. Unlike previous generations, they’re more likely to be lifelong self-learners, leveraging both online and offline sources. For example, content creators, many still in high school or recent graduates, have already developed massive fanbases, in some cases of over a billion followers: a single short post or endorsement can generate fees anywhere from $5,000 to $20,000 and up. These kids are not rushing to go to college to study accounting.5

Yet, unlike Boomers and Millennials, Gen Z are well aware of the hazards of oversharing on public platforms. They frown upon sharing private data and don’t find the use of emojis all that cute. They’ve done the math and understand the quid pro quo of using so-called “free” services in exchange for the provision of personal data which companies, in turn, monetize.Expect continued pushback on the growing might of large-cap tech companies in the form of legislation and trustbusting as well as greater scrutiny and zero-tolerance for discriminatory practices.6

The trend toward location-neutral employment where employees and team members only meet virtually portends a long runway for private and secure social networks. As businesses recruit globally, these work groups are likely to be the most diversified in history in terms of race, gender, and other attributes. Recently, Shopify insisted that all its press releases list its “physical” location as “the Internet”, not Ottawa.

Access, Not Ownership

If you haven’t heard of Non fungible tokens (NFTs) yet, you will soon. Non fungible tokens are crypto identifiers that authenticate ownership of limited-edition digital art. Recently the meme Nyan Cat sold for 300 ether, or approximately US$600,000. Christie’s has seen the future: it is the first major auction house to sell NFT artwork. In late February 2021, the Thunder Bay artist who goes by the handle Mad Dog Jones made US$4.3 million in a matter of minutes with his NFT artwork.7 (He plans to use to the funds to pay off his parents’ mortgage and support a disabled relative.) As finance blogger Packy McCormick noted in a recent post, the trends of solo content creation and digitalization of access allow individuals to become as powerful and wealthy, or wealthier, than large publicly traded businesses. For example, Bitcoin, which has no employees, recently surpassed $1 trillion in valuation.8,9,10

Governments’ fondness for Modern Monetary Theory which allows unlimited money printing is likely to lead to higher inflation over the long run. As current economic problems are kicked down the road, it will be Gen Z who will be face the music of punitively high borrowing rates for starting a business or obtaining a mortgage, and the erosion of the value of their savings. Instead of owning homes, cars and other consumer goods, Gen Z is more likely to value access to subscription models or partial ownership.11-   In other words, a company that sells 10,000 cars a quarter may, in the future, lease one car, 10,000 times.


Gen Z is the most ethnically and racially diverse and will likely be the best educated one so far.12   To appeal to this group, a good product or service will be table stakes. Companies will have to up their game by having a good reputation, fair practices, and making a positive social impact to develop customer loyalty.13 Gen Z does not compartmentalize a brand’s products from its ethics. Full transparency of company policies, the network of partners and suppliers and an entire ecosystem will be necessary to attract this consumer. According to a recent survey, 65 per cent of Gen Z attempt to learn more about the origins of products they buy (where it’s made, what it’s made from, and how it’s made), and 80 per cent say they would not buy from companies involved in a scandal.14

Sustainability is Topic A for Gen Z who are more likely to eat a plant-based diet and travel by bike rather than by car or airplane. Many Gen Zs show a reluctance to learn how to drive.15 They also embrace shopping second-hand and upcycling products.

Investing in a Gen Z Future

Currently there is no ETF focused on Gen Z, however for those interested in one-stop shopping, Principal Millennials Index ETF (GENY), offered by U.S.-based Principal, is a Morningstar 5-star-rated large-cap fund whose benchmark is the Nasdaq Global Millennial Opportunity NTR Index. It has an approximate 60/40 split between U.S.- and non-U.S.-based businesses, including Apple, Spotify, Alphabet, PayPal, Bilibili (ADR), TenCent, among the top ten. Until the launch of a dedicated Gen Z fund, this one should capture current Gen Z spending trends.16


Rita Silvan, CIM is a finance journalist specializing in women and investing. She is the former editor-in-chief of ELLE Canada and Golden Girl Finance. Rita produces content for leading financial institutions and wealth advisors and has appeared on BNN Bloomberg, CBC Newsworld, and other media outlets. She can be reached at



2      Ibid




6      Ibid