Top ETFs for Future Investments

Top ETFs for Future Investments

Table of Contents:

  1. Introduction
  2. Robotics and AI 2.1 Advancements in AI and machine learning 2.2 Fourth Industrial Revolution and AI 2.3 Leading ETFs in Robotics and AI sector
  3. Esports and Digital Entertainment 3.1 Growth of the gaming industry 3.2 Comparison of Esport ETFs 3.3 Other ETF options in this category
  4. Fintech and Crypto 4.1 Disruption of legacy banking system 4.2 Rise of digital banking apps and robo advisors 4.3 Top Fintech ETFs 4.4 Crypto and blockchain technology 4.5 Crypto ETFs
  5. Cloud Computing and Cyber Security 5.1 Importance of cloud computing 5.2 The need for cybersecurity 5.3 Top ETFs in Cloud Computing and Cyber Security sectors
  6. Conclusion

Investing in the Sectors of the Future: A Comprehensive Guide

In today's ever-changing world, identifying the sectors of the future to invest in can be challenging. With rapid advancements in technology and evolving consumer preferences, it is crucial to stay ahead of the curve. In this article, we will explore four key sectors of the future and discuss the ETFs that can provide exposure to these sectors. So, fasten your seatbelts as we take a trip to the year 2050 and dive into the exciting world of future investments.

1. Robotics and AI

The first sector we will Delve into is Robotics and AI, which focuses on companies dedicated to advancements in AI and machine learning technology. According to recent studies, the demand for AI products and services is expected to increase by 40% annually, with the global AI market projected to reach nearly a trillion dollars by 2028. The Fusion of AI and robotics is a crucial aspect of the fourth industrial revolution, which promises exceptional growth in the coming years. Investing in this sector offers exposure to cutting-edge technology with the potential to revolutionize various industries. Additionally, the prospect of having robots assisting us in our daily lives is an exciting and enticing concept.

Some of the leading ETFs in this sector include Global X's Robotics and AI ETF (BOTZ). This ETF, despite having a higher expense ratio, has delivered an average return of 20% since its inception in 2016. It focuses on industry-leading companies in the robotics and AI sector, with notable holdings such as Nvidia and Intuitive Surgical. Other ETF options in this category include iShares Robotics and AI ETF (IRBO) and Kathy Wood's ARK Autonomous Tech and Robotics ETF (ARKQ). While this sector may not have received as much hype as semiconductors and electric vehicles, the future holds great potential for robotics and AI technologies, making them a worthy investment.

2. Esports and Digital Entertainment

The next sector that deserves our Attention is Esports and Digital Entertainment. With over 3.2 billion gamers worldwide, the gaming industry is experiencing unprecedented growth. A recent survey predicts that more than half of the U.S population will identify as gamers by the end of this year. Gamers spent over $44 billion on software and services in the previous year alone. As the future of gaming continues to rise, investing in this sector can be highly lucrative.

Two prominent ETFs focusing on Esports and Digital Entertainment are the VanEck Gaming and Esports ETF (ESPO) and the Global X Gaming and Esports ETF (HERO). These ETFs offer similar expense ratios and returns. Despite facing challenges due to supply chain and chip shortages, many companies within these ETFs have reported growth. It is important to note that there is some overlap in holdings, so thorough research is essential to identify the differences when considering investment in these ETFs. For those interested in niche options, Roundhill offers the Bitwise Crypto Industry Innovators ETF (NERD) and the Sports Betting and iGaming ETF (BETS).

3. Fintech and Crypto

Another sector poised for significant disruption is Fintech and Crypto. Digital banking apps and robo-advisors are gaining substantial market share from traditional brick-and-mortar banks. According to a Gartner survey, 80% of heritage banking services will go out of business by 2030, with millennials and Gen Zers being twice as likely to use robo-advisors compared to older Americans. The convenience, lower fees, and improved customer service offered by fintech companies make them attractive alternatives to traditional banking.

Two notable ETFs in the Fintech space are the ARK Fintech Innovation ETF (ARKF) and the Global X FinTech ETF (FINX). Both ETFs hold industry leaders in the digital financial space, such as Square and PayPal, which consistently outperform earnings and demonstrate sustained growth. Additionally, the rise of cryptocurrencies presents a unique investment opportunity. While crypto assets can be volatile and complex, the Bitwise Crypto Industry Innovators ETF (BITQ) provides exposure to companies directly involved in blockchain projects, exchanges, and hold crypto assets. This ETF includes holdings like Coinbase and MicroStrategy, has a year-to-date return of 25%, and eliminates the risk associated with holding individual cryptocurrencies.

4. Cloud Computing and Cyber Security

The increasing reliance on cloud computing and the growing threat of cyber attacks make the Cloud Computing and Cyber Security sector vital for every business. As companies embrace multi-cloud strategies and leverage cloud apps, the need for robust cybersecurity measures becomes paramount. IBM estimates that 81% of enterprises have already incorporated a multi-cloud strategy, while cyber attacks and data breaches Continue to evolve in complexity and frequency.

In this sector, the First Trust Cyber Security ETF (CIBR) stands out with an expense ratio of 0.6% and an average yearly return exceeding 16% since its inception in 2015. Other similar ETFs worth exploring include the Global X Cybersecurity ETF (BUG) and the iShares Cybersecurity and Tech ETF (IAJK). These ETFs focus on industry leaders within the cybersecurity space, and their holdings can provide exposure to the companies at the forefront of protecting against cyber threats.

When it comes to cloud computing, the First Trust Cloud Computing ETF (SKYY) and the Global X Cloud Computing ETF (CLOU) are two prominent options. SKYY, which has been available since 2011, boasts a slightly lower expense ratio and has seen an average annual return of over 17%. On the other HAND, CLOU, despite being around for only two years, has an impressive average yearly return of over 30%. Both ETFs prioritize significant players in the cloud computing sector, such as Akamai Technologies. Additionally, the ARK Next Generation Internet ETF (ARKW) and the WisdomTree Cloud Computing Fund (WCLD) offer alternative choices within this sector.

5. Conclusion

As we conclude our Journey into the sectors of the future, it is evident that investing in these areas holds immense potential. From Robotics and AI to Esports and Digital Entertainment, Fintech and Crypto, and Cloud Computing and Cyber Security, each sector presents unique opportunities for investors. It is important to conduct thorough research, considering factors such as expense ratios, holdings, and historical performance when selecting ETFs in these sectors. By staying informed and positioning oneself in the sectors shaping the future, investors can potentially reap significant rewards in the long run.

FAQ:

Q: What are the sectors of the future? A: The sectors of the future include Robotics and AI, Esports and Digital Entertainment, Fintech and Crypto, and Cloud Computing and Cyber Security.

Q: Which ETFs should I consider for investing in Robotics and AI? A: Some leading ETFs in the Robotics and AI sector are Global X Robotics and AI ETF (BOTZ), iShares Robotics and AI ETF (IRBO), and ARK Autonomous Tech and Robotics ETF (ARKQ).

Q: How can I invest in Esports and Digital Entertainment? A: You can consider ETFs like VanEck Gaming and Esports ETF (ESPO) and Global X Gaming and Esports ETF (HERO) for exposure to the Esports and Digital Entertainment sector.

Q: What are the options for investing in Fintech and Crypto? A: ARK Fintech Innovation ETF (ARKF) and Global X FinTech ETF (FINX) are notable ETFs for investing in the Fintech sector. For exposure to crypto-related companies, the Bitwise Crypto Industry Innovators ETF (BITQ) is an option.

Q: Which ETFs focus on Cloud Computing and Cyber Security? A: First Trust Cyber Security ETF (CIBR), Global X Cybersecurity ETF (BUG), and iShares Cybersecurity and Tech ETF (IAJK) are some ETFs focusing on Cyber Security. First Trust Cloud Computing ETF (SKYY) and Global X Cloud Computing ETF (CLOU) are prominent ETFs in the Cloud Computing sector.

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