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The Great Wealth Transfer: How Millennials Invest and Why That’s Good for ETFs
$124 trillion is expected to be passed down to a new generation of investors by 2048.1 It will be the greatest wealth transfer in history.
The Baby Boomer generation, which holds half of the country’s $140 trillion in wealth,2 will begin bequeathing their estates to Gen Xers and Millennials. These recipients of newfound trillions have very different investment interests than their parents and grandparents — differences that will dramatically shift the investment landscape.
While their parents (e.g. Boomers) are the wealthiest generation, Millennials are the least, holding only 10% of the country’s $140 trillion in wealth.2 Yet Millennials stand to inherit the most of any generation over the next couple decades. A staggering $46 trillion.1 With innumerable asset classes to choose from, where will Millennials choose to invest their incoming windfalls?
Compared to Gen Xers and Boomers, Millennials are the most likely to build wealth with ETFs. According to Schwab Asset Management’s 2025 “ETFs and Beyond” study,3 half of newer ETF investors (within the past five years) are Millennials. They are also the most likely generation to significantly increase investments in ETFs this year (32%) and are the most interested in moving their entire portfolios to ETFs in the next five years (66%). Over 8 million adults are expected to become first-time ETF investors this year and 71% of them are under 45 years old.4
Millennial investing trends are good news for ETFs, which have been crushing the asset class game for many years now. December 2025 marked the 79th consecutive month (or roughly 6.5 years) of net ETF inflows, bringing the year-end total to a record $19.9 trillion globally.5 That’s a 33.7% YoY increase for the burgeoning asset class.5 The Great Wealth Transfer over the next two decades is expected to boost that trend exponentially.
More and more investors, and Millennials in particular, are moving their money into ETFs because they are viewed as a better alternative to other, more traditional asset classes like mutual funds. According to the Schwab study, ETF investors plan to fund new ETF investments by selling individual stocks (62%), mutual funds (52%), and bonds (40%).3 Another 38% plan on funding new ETF investments with new money,3 such as that which they will soon or have already inherited.
Though there are many reasons why younger generations are gravitating toward ETFs, low cost3 and diversification4 are at the top of the list. Compared to mutual funds, ETFs are often the more accessible, liquid, and transparent option. Millennial and Gen Z investors also view ETFs as a window into more niche markets and asset classes that weren’t as available to their parents and grandparents. As the greatest wealth transfer in history ramps up, Millennials may become the new market movers, with ETFs as the ultimate beneficiaries.
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- https://www.ml.com/articles/great-wealth-transfer-impact.html
- https://www.nytimes.com/2023/05/14/business/economy/wealth-generations.html
- https://pressroom.aboutschwab.com/press-releases/press-release/2025/Most-ETF-Investors-Can-Envision-Moving-to-ETF-Only-Portfolios-With-Half-Saying-It-Could-Be-in-the-Next-Five-Years/default.aspx
- https://www.investmentnews.com/etfs/surge-in-first-time-etf-investors-highlights-changing-us-investment-landscape/263060
- https://www.investmentexecutive.com/news/global-etf-industry-recorded-highest-ever-annual-inflows-in-2025/
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