This year it felt as though AI was the megatrend that captured all the headlines while investors glossed over some of the others. That doesn’t diminish the importance of other megatrends. And some of those could be primed for redemption stories in 2025.
Should that outlook prove accurate, the ALPS Disruptive Technologies ETF (DTEC ) is among the exchange traded funds that could benefit next year. It provides exposure to 10 transformative themes. One of those is AI, and that’s helped the ETF see solid YTD performance. Due to a variety of factors, next year could bring a widening of the megatrend investment style with contributions from other sources beyond AI.
That doesn’t imply that AI enthusiasm is going to wane, but other themes represented in DTEC could gain momentum in the new year. Those include clean energy, cybersecurity, and fintech, which has been resurgent of late.
DTEC Could Shine in 2025
Cybersecurity, the third-largest megatrend represented in DTEC, could be front-and-center in 2025. Unfortunately, that’s because cyber attacks aren’t going anywhere. In fact, bad actors are increasingly emboldened. They are deploying AI in nefarious ways to do their bidding.
“Defense budgets are ballooning, with the US expected to exceed $1 trillion in defense spending in 2025. Investments are flowing into advanced military technologies, missile systems, and cybersecurity, areas that are critical for national security,” noted deVere Group CEO Nigel Green.
Clean energy and smart grid technology equities account for almost 10% of the DTEC roster. They could also be among the 2025 rebound candidates and AI explains why. AI is creating significant new power demands. And many AI enablers are looking for ways to power the technology with clean sources.
Fintech could be among the themes represented in DTEC that could be in store for impressive 2025 showings. AI has a hand in that. That’s because many fintech companies are using AI to streamline the customer application processes. They’re also using AI to assess the creditworthiness of borrowers.
As for AI, that disruptive technology isn’t going anywhere. It’s likely to expand its footprint next year, potentially boding well for DTEC.
“The companies building the infrastructure to support AI’s expansion will drive the next phase of market gains. This is a long-term play, and investors who position themselves now will benefit immensely. While there is always talk of bubbles, the reality is that AI’s transformative potential is only beginning to unfold,” concluded deVere’s Green.
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