Exchange-traded funds have completely taken over the investment world in the past decade, particularly among millennials and Gen X investors who view them as a low-cost, lower-risk path to building wealth. Baby Boomers, however, aren't buying what everyone else is selling. According to Charles Schwab's 2025 ETFs and Beyond study, there's a massive generational divide in how different age groups think about ETFs.

The Numbers Tell a Story About Old Habits

Here's the gap in a nutshell: 66% of millennials say they could imagine shifting to an all-ETF portfolio, while only 15% of Boomers would even consider it. Looking ahead, 32% of millennials plan to increase their ETF investments over the next year, but just 6% of Boomers intend to do the same.

This makes sense when you think about how Boomers built their portfolios in the first place. They accumulated wealth through mutual funds, employer-sponsored retirement plans, and individual stocks long before ETFs became mainstream. That kind of familiarity creates inertia. Even when ETFs might offer similar market exposure at lower costs, switching feels like unnecessary work or added risk.

The way each generation approaches risk and strategy plays into this too. Younger investors feel more comfortable diving into specialty ETFs and believe they can outperform the market. The study found that 54% of millennials describe themselves as tactical investors who actively trade to capitalize on market movements. Only 29% of Boomers say the same. For many older investors, the portfolio is already built. Why mess with it now?

The Fee Paradox

Here's where it gets interesting: Boomers actually care more about minimizing investment fees than younger investors do. You'd think that would make ETFs a slam dunk. Many ETFs carry expense ratios far below comparable mutual funds. But cost alone isn't enough to convince Boomers to switch. They've been paying those mutual fund fees for decades, and if the portfolio works, why rock the boat?

The generational divide also comes down to the investing environments each group experienced. Millennials and Gen X came of age with online brokerages, zero-commission trading platforms, and robo-advisors. ETFs feel native to that world. Boomers, on the other hand, started investing when you called a broker and paid commissions on every trade. Mutual funds were the accessible, diversified option. That mental framework doesn't just disappear because a new product shows up with lower fees.

Testing the Waters Without Going All In

If you're a Boomer who's curious about ETFs but hesitant to make the jump, there's no need to overhaul everything at once. Start small by adding a single broad-market ETF alongside your existing mutual fund holdings. Compare the fees, performance, and flexibility over time. See how it feels.

If you work with a financial advisor, have them walk you through the specifics. Ask about tax implications, cost differences, and whether an ETF could replace a more expensive fund you're already holding. The point isn't to abandon what's worked for you. It's to see if there's a better tool for the job without taking on unnecessary risk or complexity.