Multiple mega-trends are emerging as the technology sector rapidly evolves, but that can make it difficult for investors to which trends fit their portfolio needs. The ALPS Disruptive Technologies ETF (DTEC) solves that conundrum by providing equal-weight exposure to 10 disruptive themes.
DTEC tracks the Indxx Disruptive Technologies Index, which identifies companies using disruptive technologies across ten thematic areas, including Healthcare Innovation, Internet of Things, Clean Energy and Smart Grid, Cloud Computing, Data and Analytics, FinTech, Robotics, and Artificial Intelligence, Cybersecurity, 3D Printing, and Mobile Payments.
That’s an effective methodology for investors that want the convenience of leveraging multiple disruptive themes under one umbrella and that could prove to be an ideal way of doing things in the current environment.
“A number of megatrends are driving some of the better-performing themes and find a number of stocks that are likely to outperform, being exposed to multiple themes at the same time,” Simon Powell, Jefferies’ equity strategist, said in a note.
Covering a lot of Bases
Several of the themes favored by Jefferies are accessible via DTEC, including artificial intelligence, cloud computing, and fintech.
“Artificial intelligence is increasingly being used in many sectors including health care, finance, and education, Jefferies said,” reports CNBC.
Tech continues to thrive in a world fueled by innovation as Covid-19 continues to permeate into business processes. Financial technology is one of those areas that will see further strength and an industry that could scale up to $22.6 billion by 2025.
Fintech companies are shifting financial services and economic transactions to technology infrastructure platforms, ultimately revolutionizing financial services by creating simplicity and accessibility while driving down costs.
“These companies also play an important part in the transformation of finance and banking or fintech,” reports CNBC, citing Jefferies.
The cloud computing arms race isn’t relegated to the tech giants like Google and Amazon. Organizations around the world are opening up their wallets and spending more on cloud computing technology to fortify their core businesses, resulting in record spending in 2019 and those spending records could be shattered this year, a theme DTEC is heavily levered to. The themes are benefiting DTEC as the fund is higher by 11.39% year-to-date.