The digital future is one that is increasingly lived online. As such, the companies that succeed are the ones that not only know how to collect and organize deep, high-quality sets of data, but that can also refine that data into meaningful, actionable insight.
In 2020, approximately 64 zettabytes — or 6.4 trillion gigabytes — of data were created, an amount that would be utterly impossible to sift through and make sense of without the help of algorithms and AI, according to a research overview of big data refiners by ProShares.
That need for big data processing is only anticipated to grow, reports Expert Market Research. In 2020, the big data and business analytics market reached $208 billion; by 2026, it is forecast to grow to $450 billion, experiencing a compound annual growth rate of 10% each year.
In a NewVantage Partners survey made up of Fortune 1000 companies, 92% of corporate executives reported that their investments into AI and big data had increased, with 81% reporting that they were optimistic regarding the potential and future of AI and big data in their companies.
On-Demand Industry Projected for Growth
The COVID-19 pandemic altered a lot of habits for people who were suddenly homebound, and accordingly, the on-demand market saw a surge as more people were streaming a variety of services, from music and games to videos. On-demand services such as ride sharing also continued to grow.
ProShares estimates that the on-demand market is anticipated to grow to $604 billion by 2023, up from $403 billion in 2020. This number has been boosted by COVID-19 changes, but growth is anticipated to continue within the space on an upward velocity even after the effects of the pandemic subside.
With so many options for streaming services and so many devices available, the amount of time spent streaming videos has skyrocketed. Last year saw on-demand video streaming increase nearly 75%, with the amount of subscribers in the U.S. doubling between the beginning of 2019 and the end of 2020. A Fortune Business Insights report that the global market for on-demand video services will grow to $160 billion by 2027; in 2019, the market had a valuation of $54 billion.
In a world that is increasingly plugged in and generating enormous amounts of data based on consumption habits, analyzing how people are spending their time online or viewing media will be a crucial element for not only targeted advertising, but also in formulating meaningful growth for digital companies. The power of big data refiners to sift through massive amounts of information and glean helpful and meaningful insights will prove make-or-break for companies whose businesses depend on understanding and capitalizing on consumer habits.
Investing in Big Data and Digital Consumption
The ProShares Big Data Refiners ETF (DAT ) invests in companies that work to assist other businesses in processing large amounts of data and pulling insightful information from the data collected. DAT seeks to track the FactSet Big Data Refiners Index, an index that is made up of companies that create the infrastructure and analytics to manage and extract information from the high-volume data sets being created constantly.
Companies within the index must derive 75% of their business from providing analytics, software, hardware, and other infrastructure that can manage and also pull information from large structured and unstructured data sets. If 25 companies that meet these requirements are not found within the sub-industries used to construct the index, the revenue threshold will be lowered to 50%.
Securities within the index are weighted based on their market cap up to a max of 4.5% for any singular company, and securities that meet market cap and liquidity requirements can come from U.S. and non-U.S. developed and emerging markets.
DAT carries an expense ratio of 0.58% and contains companies such as Datadog Inc at 7.17%, Mongodb Inc at 6.45%, and Dynatrace Inc at 5.99%.
The ProShares On-Demand ETF (OND ) is the first ETF to invest in companies focused solely within the on-demand market, an industry that encompasses services such as video streaming and ride sharing.
OND seeks to track the FactSet On-Demand Index, an index that is comprised of companies that provide on-demand products and services in digital media, e-gaming, food delivery, fitness, ride sharing, or virtual reality experiences. Companies within the index must derive 75% of their business from products or services from one of 15 sub-industries that FactSet has classified as “on-demand.” If 25 companies that meet these requirements are not found within the sub-industries used to construct the index, then the revenue threshold will be lowered to 50%.
Companies contained within the index are weighted according to their market cap, with a max of 4.5% for any single security, and companies that meet market cap and liquidity requirements can come from U.S. and non-U.S. developed and emerging markets.
OND carries an expense ratio of 0.58% and contains companies such as Doordash Inc (DASH) at 7.05%, Netflix Inc (NFLX) at 6.99%, and Spotify Technology (SPOT) at 6.43%.
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