As a bright-eyed young teenager in the late 80s (revealing my age), one of the great movies of the time, Back to the Future II, revealed some pretty ‘crazy’ predictions on the technologies and products that would be available in the future – the future back then being the year 2015. One of the key dates in the movie was 21st October 2015 and when this date actually arrived plenty of stories popped up revealing many of the predictions in the movie in fact, had come true.
Hands free gaming consoles (Xbox Kinect, Microsoft) and video conferencing (Facetime, Apple) are a couple of noteworthy mentions. Nike even decided to release shoes with self tying laces, as seen in the movie! Equally, there were plenty of predictions that didn’t come true – for example, self-drying clothes and flying cars, and some technologies that were not even imagined by the movie such as smartphones! Despite some of the inaccuracies, the movie certainly captured the theme that technology would play a significant part in our day-to-day lives by 2015. This has certainly transpired, as my colleague Mai demonstrated in her recent blog, Reflections of a technology addict.
Due to the growth in the ETF industry, investors who have a particular view about the growth of a particular sector or theme, such as technology, are now able to do so with ease.
Thematic investing is a top-down approach which allows investors to gain exposure to broad macroeconomic themes which they believe can capitalise on future trends or structural changes, and provide long-term growth potential. Investors seeking to implement a thematic investing approach typically aim to get exposure to a portfolio of companies within the specified theme or sector, rather than trying to identify a specific company that may become the future leader in the space. Australian investors can now invest thematically by using the expanding range of Sector and Thematic Exchange Traded Funds available on the ASX.
BetaShares has recently launched a new series of Global Sector ETFs in this growing segment of the market, comprising:
- Healthcare (ASX: DRUG)
- Agriculture (ASX: FOOD)
- Cybersecurity (ASX: HACK)
- Banks (ASX: BNKS)
- Gold Miners (ASX: MNRS)
- Energy (ASX: FUEL)
One additional thematic exposure we offer, the Nasdaq 100 ETF (ASX: NDQ), gives Australian investors the chance to invest in many of the world’s most innovative companies that continue to revolutionise our everyday lives and which therefore provides significant exposure to the global technology sector. Investors who thought back in 1989 that, as Back to the Future II wildly imagined, technology would be of such importance to our future, and decided to back their view and invest in the Nasdaq 100, would have experienced close to 19x growth on their original investment to date. Not bad for some ‘crazy’ predictions on technology and its importance in our day-to-day lives. Now, can Marty McFly jump back into that DeLorean and give us a taste of what we might expect to see further into the future….
What themes do you think will be significant in the future?