The Global X Internet of Things Thematic ETF (SNSR), the first exchange traded fund dedicated to the Internet of Things (IoT) investment theme, is up more than 22%, reflecting the robust growth expectations associated with the sprawling IoT market.
SNSR is considered a thematic ETF. Thematic strategies tend to be alpha-seeking, have a long time horizon and are growth oriented. The thematic investments also transcend classic sector, industry and geographic classifications as many overlap.
SNSR, which is two years old, targets the Indxx Global Internet of Things Thematic Index. IoT “includes the development and manufacturing of semiconductors and sensors, integrated products and solutions, and applications serving smart grids, smart homes, connected cars, and the industrial internet,” according to Global X.
Logistics is one market where IoT is expected to see exponential growth.
A recent report “predicts the global internet of things (IoT) in logistics market to grow with a CAGR of 13.6% over the forecast period from 2018-2024,” according to Research and Markets.
More Tailwinds For SNSR
SNSR, which debuted in September 2016, is a global ETF with exposure to 10 countries with the U.S. accounting for about two-thirds of the geographic weight. The ETF holds 46 stocks, most of which hail from the technology sector.
Software is another market with significant IoT potential and that could mean opportunity for investors considering SNSR.
“IoT is a complex ecosystem that integrates Information technology (IT) with operations technology (OT) to generate data that can be analyzed to increase revenues and improve business productivity,” notes Research and Markets. “From big data & analytics to ubiquitous connectivity to artificial intelligence and computing, IoT touches every technology and industry.”
For investors looking for satellite, thematic positions, SNSR makes sense now because of the rapid pace of growth in the IoT market being forecast for the next several years.
“The combined markets of the Internet of Things (IoT) will grow to about $520B in 2021, more than double the $235B spent in 2017,” according to Forbes. “Data center and analytics will be the fastest growing IoT segment, reaching a 50% Compound Annual Growth Rate (CAGR) from 2017 to 2021.”
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