Invest in the millennial wave.

Millennials – or the roughly 83 million Americans born between 1982 and 2000 – certainly have had their share of money problems. From sky-high real estate prices to the student loan crisis, many in their 20s and 30s also are paying the price for starting their working life around the global financial crisis of 2008. But as the old saying in economics goes, demographics are destiny. And millennials are starting to reshape the U.S. economy with their spending habits. This generation now spends $600 billion a year – and that figure is rising as they approach their peak earning years. Millennials are coming into their own. If you want to profit from the resulting shift in consumer spending, here are 10 tactical funds to reposition your portfolio.

Next:PowerShares Dynamic Leisure & Entertainment (ticker: PEJ) Credit

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PowerShares Dynamic Leisure & Entertainment (ticker: PEJ)

Millennials spend a bundle on entertainment, but the biggest reason PEJ is a great fit for the spending of this generation is the inclusion of a host of restaurants in this exchange-traded fund. Bernstein research shows millennials eat more of their meals at bars or restaurants than any other age group. And with top holdings of this fund including Olive Garden parent Darden Restaurants (DRI), Chipotle Mexican Grill (CMG) and fast-food conglomerate Yum Brands (YUM), this is as much a play on dining out as anything else. That makes it a perfect way to capitalize on millennial spending now and in the future.

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Invest in the millennial wave.

Millennials – or the roughly 83 million Americans born between 1982 and 2000 – certainly have had their share of money problems. From sky-high real estate prices to the student loan crisis, many in their 20s and 30s also are paying the price for starting their working life around the global financial crisis of 2008. But as the old saying in economics goes, demographics are destiny. And millennials are starting to reshape the U.S. economy with their spending habits. This generation now spends $600 billion a year – and that figure is rising as they approach their peak earning years. Millennials are coming into their own. If you want to profit from the resulting shift in consumer spending, here are 10 tactical funds to reposition your portfolio.

PowerShares Dynamic Leisure & Entertainment (ticker: PEJ)

Millennials spend a bundle on entertainment, but the biggest reason PEJ is a great fit for the spending of this generation is the inclusion of a host of restaurants in this exchange-traded fund. Bernstein research shows millennials eat more of their meals at bars or restaurants than any other age group. And with top holdings of this fund including Olive Garden parent Darden Restaurants (DRI), Chipotle Mexican Grill (CMG) and fast-food conglomerate Yum Brands (YUM), this is as much a play on dining out as anything else. That makes it a perfect way to capitalize on millennial spending now and in the future.

The Organics ETF (ORG)

When this generation does eat at home, the menu tends to include fresh, organic options instead of the processed foods popular with older generations. That makes this organic-focused ETF sponsored by Janus Henderson a perfect fit. Top holdings include U.S. names you may have heard of such as Sprouts Farmers Market (SFM) but also more obscure players such as French beauty company L'Occitane International (LCCTF) that does a brisk business with its natural skin care products. If you'd prefer to play it safer with staples stocks instead of restaurants, this is an equally targeted fund to capitalize on millennial spending.

GlobalX Autonomous & Electric Vehicles ETF (DRIV)

Global sales of plug-in electric vehicles hit 2.1 million units for 2018, up 64% over 2017, with brisk growth forecast again for the current year. Charging stations are now increasingly common at shopping malls and parking garages. Companies are investing big in this trend, but they are also looking to autonomous vehicle technologies, too. Though this future is still a few years away, the writing is on the wall based on ownership trends and big investment. This Global X fund is a great way to play that trend, via automakers like Tesla (TSLA) as well as tech stocks like Microsoft Corp. (MSFT) behind related software and chipmaker Nvidia Corp. (NVDA) that make the hardware.

Invesco WilderHill Clean Energy ETF (PBW)

Thinking beyond just cleaner cars is an overall attention on clean energy that is fueling the 21st century economy. And with a recent Gallup poll showing that 70% of Americans ages 18 to 34 are worried about climate change compared with just 56% for those 55 and older, the younger generation will be a key part of leading the charge to "go green" in the years to come. The PBW clean energy ETF from Invesco is a great one-stop shop for these kinds of companies, from true alternative energy players like First Solar (FSLR) to industrial suppliers like specialized wire and power systems player American Superconductor Corp. (AMSC).

iShares MSCI KLD 400 Social ETF (DSI)

In the age of #metoo millennials are also increasingly concerned with other ethical issues such as the use of child labor or female representation on corporate boards. The ESG revolution that includes environmental, social and governance issues continues to gain momentum, and a new generation of investors are increasingly interested to put their money behind corporations that share their values. With $1.4 billion in assets under management, DSI is one of the most popular ways to address this. The ETF is benchmarked to an index of about 400 large U.S. companies that include Microsoft and Facebook (FB), but excludes companies that are at the bottom of Wall Street when it comes to ESG characteristics.

First Trust Dow Jones Internet Index (FDN)

Industry group Digital Commerce has calculated that global e-commerce sales increased 18% in 2018 to create a more than a $3 trillion industry. And as natives to the internet who have pretty much never known a world without Amazon.com (AMZN), millennials remain a crucial part of this growth. This First Trust ETF ensures you have the broad opportunity of e-commerce covered in as many ways possible across its 40 holdings. These include obvious picks like retailer Amazon and travel portal Expedia Group (EXPE) but also security and payments processor Verisign (VRSN) and networking giant Akamai Technologies (AKAM) that help power the back end of many websites.

ETFMG Video Game Tech ETF (GAMR)

Video games are big business, tallying more than $134 billion in global sales last year. And that's only going to rise as younger gamers get even more serious. Technology consulting firm Activate has estimated that more than 250 million people worldwide watch "e-sports" video game competitions. Investors need not worry about researching individual games or the software companies behind them. This ETF carries a diversified list of top global players in both software and hardware, from big studios that make games your kids play to lesser-known picks like Hong Kong-based smartphone game player iDreamSky Technology (DSKY)

Global X Cloud Computing ETF (CLOU)

Another important digital technology shift that is being defined by the influence of the younger generations is cloud computing. Whether streaming movies and music or using subscription-based versions of software, it's simply not the norm for younger Americans to worry about purchasing software or storing data locally. CLOU’s holdings aren't the consumer facing brands that people use, however. Instead, this tactical ETF relies heavily on cloud computing infrastructure investments such as IT security and firewall company Zscaler (ZS) and Shopify (SHOP), a Canada-based firm that builds back-end e-commerce and cloud-based retailing platforms for third parties.

Millennials Thematic ETF (MILN)

If you like all of these trends, an easy way to invest in one place is the MILN ETF from Global X that ties up media, tech and spending trends among this younger cohort of U.S. consumers. That includes entertainment giant Walt Disney Co. (DIS), coffee king Starbucks Corp. (SBUX) and social media powerhouse Facebook. The list of 81 stocks is more than a great way to tap into the big names that tend to benefit from millennials however, as people outside of this generation alone buy Frappucinos and see Marvel movies. But it's a simple way to broadly play spending habits in one broad ETF.

iShares Exponential Technologies ETF (XT)

Betting on the next generation of dynamic companies may require thinking about stocks you haven't even heard of yet. Some old tech firms have struggled mightily lately even though they were dominant just a decade or two ago. To look ahead to where millennials will be spending their money during their peak earning years, consider the XT fund. It offers exposure to stocks developing "exponential technologies" designed to displace older technologies and create new markets. This includes Switzerland-based AMS AG that's developing 3D sensor technology or next-generation semiconductor lab Lam Research Corp. (LRCX). Whatever the future holds for millennials, many of the high-tech firms that make up this fund's 200 holdings will be a part of it.

Great ETFs to invest in the millennial shift.

PowerShares Dynamic Leisure & Entertainment (PEJ)The Organics ETF (ORG)GlobalX Autonomous & Electric Vehicles ETF (DRIV)Invesco WilderHill Clean Energy ETF (PBW)iShares MSCI KLD 400 Social ETF (DSI)First Trust Dow Jones Internet Index (FDN)ETFMG Video Game Tech ETF (GAMR)Global X Cloud Computing ETF (CLOU)Millennials Thematic ETF (MILN)iShares Exponential Technologies ETF (XT)1 of 13

Jeff Reeves, Contributor

A veteran journalist with extensive capital markets experience, Jeff Reeves began writing for ...  Read more

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