Municipal Bonds
When you see the latest hospital, school, highway, or airport alongside the road, you might not immediately imagine that it was likely partially financed with municipal bonds. In fact, two out of three infrastructure projects in the U.S. are financed with municipal bonds, according to a report by New York Life Investments.
Municipal bonds have a long history; the first was established in 1812 in New York City to raise money to build a canal. These days, they are still a tool used to help fund large, high profile projects. In 2018, for example, “the Denver International Airport issued $2.5B in bonds to finance capital improvements, the largest airport revenue bond in municipal bond history.” In 2016, “the New York State Thruway Authority issued $850 million in bonds to finance a portion of the new NY Bridge Project.” So, while municipal bonds might sound boring, they are helping communities to accomplish big things.
Not only do municipal bonds (also called muni bonds) make many new infrastructure projects possible, they can generate passive, tax-free income for investors.
While municipal bonds were initially hit hard by the COVID-19 pandemic, they have since recovered with robust Federal Reserve support. According to BlackRock, because COVID-19 is likely to drive higher government spending and record deficits which is in turn likely to drive higher taxes for investors, tax-free income vehicles like municipal bonds are likely to be more attractive than ever in the years to come.
Here’s what investors should know.
What Are Municipal Bonds?
Municipal bonds are financial vehicles for communities to build schools, fix highways, improve water systems, maintain bridges and tunnels, upgrade hospitals, and more.
Municipal bonds are a means for investors to loan money that funds local infrastructure and public works programs. In short, when a municipality needs to raise money for an infrastructure project, they often issue bonds. These bonds fund a project over a designated period of time. During that scheduled period of time, investors are paid interest (typically semi-annually) until the bond matures, at which time they receive their initial principal back.
There are two types of municipal bonds, a general obligation (GO) bond and a revenue bond. A GO bond is usually backed by a municipality’s local government and carries an unconditional promise of repayment. GO bonds generally pay investors via a general fund or through a dedicated local tax. Revenue bonds fulfill debt obligations via raised money. For example, a bridge that collects a toll or a sporting facility that raises money via ticket sales.
Municipal bonds are unique from many other bonds in that they are mostly tax-exempt at the federal level, and in many cases, at the state level as well. They have enjoyed their tax-free status since 1913. According to the National Association of Counties (NACo), “the tax-exemption of municipal bond interest from federal income tax represents one of the best examples of the federal-state-local partnership.” The tax-exemption applies to earned interest. So, while corporate bonds might offer a higher earned interest rate, because corporate bonds are taxed, their take-home earnings might actually be less than their municipal counterparts.
Municipal bonds also tend to outperform other vehicles like CDs, although municipal bonds have a slightly higher associated risk. Nonetheless, municipal bonds still have a relatively low default rate (lower than the corporate bond default). Between 1970 to 2011, there were only 71 municipal defaults, compared to 1,784 corporate defaults during the same time period, according to Moody’s analysis.
One possible drawback is that municipal bonds tend to be less liquid than even their corporate counterparts, which investors should consider before investing.
Why Invest in Municipal Bonds?
Municipal bonds tend to help buffer portfolios as the stock market fluctuates. Municipal bonds are unique in that they offer both tax-exempt income and high credit quality. They have particular appeal for income-oriented investors in higher tax brackets who want to reduce federal and state income tax bills. The municipal bond tax exemption makes them attractive enough that investors often choose them over their corporate counterparts.
Regarded as a conservative investment, municipal bonds tend to fluctuate less than stocks. They typically pay a predictable amount twice per year. They also offer a low chance of default, especially considering that they are usually backed by taxes and fees generated by essential services.
Perhaps even more appealing, municipal bonds allow investors to invest their money locally. These bonds offer investors the opportunity to be a part of building their city’s newest football stadium or their community’s newest school facility, for example.
Not only that, municipal bonds help to keep infrastructure decision-making power with state and local leaders in partnership with their residents, according to NACo.
Investors should note that municipal bonds with a shorter duration often offer lower yields than longer duration bonds. Nonetheless, with either type, investors can anticipate getting their initial investment back and then some.
Municipal bonds are a tangible way for investors to support infrastructure. Not only do they offer a range of benefits for investors, they benefit the communities where projects that they help to fund are built. For those reasons, they should be on every investor’s radar.
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The information and data are as of the January 28, 2021 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Artificial Intelligence
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Consider that in 2002, i-Robot released the Roomba, an autonomous robot vacuum that cleans while avoiding obstacles. While that might have seemed like a miracle back then, it’s pretty standard today— selling for under $300 at a variety of major retailers.
But, while in the near and far past many thought that artificial intelligence (AI) would present itself as robots, today it’s really more about smart computer programs and capabilities that are taking hold across industries.
“AI is happening whether we like it or not. It’s a reality. And we can either lay victim to it, or we can invest in it,” according to Howard Brown, CEO of Ring DNA, in an interview with Yahoo Finance.
According to Brown, AI is less about robots and more about “what we can do to augment the human experience.”
Today companies across industries are focused on improving their digital operations. According to a recent survey of CIOs from large enterprises around the world, “89% of CIOs said their digital transformation has accelerated in the past 12 months, and 58% said this will speed up in the next year.”
Still, there is a lot of room for AI implementation. According to the same survey, “70% of CIOs said their teams spend too much time doing manual tasks that could be automated, yet only 19% of all repeatable IT processes have been automated.”
Artificial intelligence is showing up everywhere from online chat bots to your local fast-food drive thru. Here’s what investors should know before they miss out.
What is Artificial Intelligence?
Artificial intelligence (AI) is a “wide-ranging branch of computer science concerned with building smart machines capable of performing tasks that typically require human intelligence.”
AI is remarkable because it involves machine learning and deep learning. Machine learning essentially programs a machine to learn through a variety of algorithms. The more involved deep learning feeds data into an Artificial Neural Network (ANN), or “a very compute intensive network of mathematical functions joined together in a format inspired by the neural networks found in the human brain.”
The learning function of AI means that it has a “self-improving nature,” can reduce expenses and offer a predictive advantage; all of which is lending to an increase in the adoption of AI in a myriad of ways.
While robots can be programmed to learn, so can applications that identify and prevent fraud, personalize shopping, improve medical diagnosis and treatment, predict transportation issues, and much more.
Why Invest in Artificial Intelligence?
From the advent of self-driving cars to spam filtering to smart voice assistants to detecting water leaks, artificial intelligence is becoming increasingly common, whether we choose to notice it or not.
AI’s power to improve industry processes is driving change in the ways companies do business across industries. According to PriceWaterhouseCoopers in its 2018 report Smart Money: AI Transitions From Fad to Future of Institutional Investing, “…from back office procedures to front office decisions, AI is becoming the preferred tool for gaining a competitive edge.”
Market leaders in AI include Alphabet (the umbrella company for all Google products which includes the Google search engine), Tesla and NVIDIA. Tesla collects data from its on-road autopilot vehicles to advance deep learning and hone outcomes in edge cases. In addition, Tesla is designing its own AI chips. NVIDIA sells about 80% of all GPU (graphics processing unit) chips, a product used for deep learning.
In Japan the government is investing in an AI powered matchmaking program to help change the trajectory of plummeting birth rates.
The list goes on and it’s growing by the day.
So, it’s no surprise that markets are anticipating that AI is expected to cause major disruptions in industries including healthcare, customer service and experience, banking, financial services, insurance, logistics, retail, cybersecurity, transportation, marketing, defense, and lifestyle by 2030.
In the lending industry alone AI is enabling faster loan assessment, quicker response to fraud, reduced costs and time associated with executing strategies and financial reports, improved advisory services, streamlined client access, optimized trading strategies, and increased efficiency overall.
As AI is increasingly adopted in the most innocuous and transformative ways, there is broad opportunity.
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The information and data are as of the January 11, 2021 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
eSports
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The last 12 months have been challenging for the sports industry. Canceled seasons, empty stadiums and ever-changing schedules for many leagues in 2020.
It has become the perfect growth opportunity for eSports, aka video game competitions.
Even before the pandemic, eSports was a growing industry which saw $4.5 billion in investment in 2918, according to Deloitte. That’s a notable increase from $490 million in total investment in 2017. And it’s still just beginning. According to a Newzoo figure on Statista, eSports industry revenue is expected to reach $1.6 billion by 2023.
More traditional “sports” genre varieties of eSports that are growing in popularity include eNascar sim racers (which set a new record in March 2020 to become the highest-rated televised eSports event ever), the FIFAe World Cup, and the NBA 2K League, whose broadcasts on Twitch increased nearly 70% year over year. That’s not to mention the Madden 21 Club Championship which is scheduled to return in 2021 with a prize pool of $750,000.
According to the eSports Industry Report by Pillsbury, year-over-year eSports industry growth is expected to reach 26.7% this year and traditional leagues are taking notice. But e-versions of traditional sports aren’t the only kinds of eSports, which also offer more traditional gaming competitions.
What Are eSports?
As a category, eSports is basically “competitive gaming at a professional level.” To be sure, however, they look a lot different than traditional sports.
The many genres of eSports include Real-Time Strategy, Multi-player Online Battle Arena (MOBA), First-Person Shooter (FPS), and Sports. Across genres, eSports don’t involve physical activity like sports in the traditional sense (although some eSports teams have personal trainers that help players to stay fit). It’s video gaming.
Even so, pro-gaming is serious business, with gamers practicing for 10 hours or more each day. Like more traditional sporting “practice,” activities might include studying previously completed games to determine ways to improve, informal competitions against other teams, and even analyzing opponents’ play styles and strategies. Pro teams even have coaches and managers.
Typically, professional gamers are paid a base salary by their team or company before bonuses or prize winnings. eSports teams make money through sponsorships, advertising, merchandise, tournament winnings, league revenue sharing, ticket sales, and broadcasting rights. Top tournaments and leagues beyond ones that resemble traditional sports include the Overwatch League, League of Legends Championship Series, Fortnite World Cup, and Dota 2: The International.
A major difference between traditional sports and the eSports industry is that the games played in eSports are owned by their game/developers and publishers. Publishers are considered “the most powerful group in the eSports ecosystem,” according to Pillsbury. Even if a publisher isn’t handling a tournament, it can still generate licensing revenue.
Tournament organizers can also make large sums of money, even if they license from game publishers. The Electronic Sports League (ESL), for example, is one of the world’s largest eSports companies.
So, who is watching? It’s a young and well-off demographic.
According to Deloitte, “the eSports industry had a global fan base of 380 million in 2018 with 37% representing males ages 21 to 35, and 16% representing females ages 21 to 35.” In the United States, 61% of eSports viewers earn more than $50,000 per year.
Viewers aren’t limited geographically to the U.S. Nearly half a billion people worldwide consume eSports content, and most of those audience members are under the age of 35—one of the most important and profitable demographics for brand awareness. In China, South Korea, and Europe as well as in the U.S. competitive gaming has established mass popularity. Its popularity is also growing in Eastern Europe and South America. That’s much different than the markets for traditional sports (think NFL football) that are predominately tied to domestic audiences.
Why Invest in eSports?
If there’s any indication about the future of eSports, it’s the acknowledgement from the broader sports world that this segment of the industry is here to stay. ESPN, for example, broadcast League of Legends, NBA 2K, and Formula 1 in 2020. Not only did that catch the eyes of its followers, but it also introduced new viewers to the eSports category.
According to Deloitte, “the eSports ecosystem offers a variety of different investment opportunities across a range of subsectors.” These include team organizations, developers, event coordinators, media, eSports viewership platforms and advertising, and consumer products.
Viewership platform Twitch, for example, is owned by Amazon and streams a massive portion of eSports events. In November 2020, Twitch reported a record 1.7 billion hours watched. And Twitch isn’t alone. According to Riot Games, League of Legends Worlds 2020 also set a new record, achieving an average minute audience of 23 million. Other streaming platforms include Huya and Douyu, two of the largest streaming platforms in China.
With more than 2.5 billion gamers around the world, the eSports industry has an “unparalleled potential for growth” especially in a pandemic and post-pandemic world. And, with the diversity of stakeholders involved, there is ample opportunity for investment.
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The information and data are as of the January 7, 2021 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Nuclear Power
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Nuclear power is a growing force “intrinsically tied to National Security” according to the U.S. Department of Energy, making it a force in global economics, politics and beyond.
In recent decades, the U.S. has ceded its competitive advantage in nuclear energy to China and Russia— something that politicians and industry leaders alike seem motivated to rectify. That’s a big deal considering that the global market for nuclear power could triple by 2050. Much of this growth is anticipated to come from increased demand from emerging markets.
The opportunity in engaging emerging markets with exported nuclear energy extends beyond financial. Nuclear agreements can translate to long-term strategic relationships, which is no surprise when you consider that the construction, operation and decommissioning of a nuclear facility can take years.
If the U.S. can take a leading role in developing these markets, it could both help to ensure national security and a leading role in the global energy marketplace.
But, Russia and China are both vying for the same position, increasing their nuclear production and developing relationships around the world. China, for example, has added 21 reactors in the past 5 years, with 19 more in the works. China also recently revealed its first domestically developed nuclear reactor. According to the China National Nuclear Corporation, the reactor can generate 10 billion kilowatt-hours of electricity each year and cut carbon emissions by 8.16 million tons.
Nuclear power is a highly competitive industry with long-lasting implications. Here’s what investors should know.
What Is Nuclear Power?
To understand the importance of nuclear power, it’s important to understand the basics of how nuclear energy is generated. According to the U.S. Energy Information Administration:
“Nuclear energy is energy in the core of an atom. Atoms are the tiny particles in the molecules that make up gases, liquids, and solids… An atom has a nucleus (or core) containing protons and neutrons, which is surrounded by electrons. Protons carry a positive electrical charge, and electrons carry a negative electrical charge. Neutrons do not have an electrical charge. Enormous energy is present in the bonds that hold the nucleus together. This nuclear energy can be released when those bonds are broken. The bonds can be broken through nuclear fission, and this energy can be used to produce (generate) electricity.”
Nuclear power plants conduct nuclear fission, which splits atoms apart to release energy. (Uranium is commonly used for this process.) The energy that is released in this process presents itself in the form of heat and radiation.
Nuclear energy is notably different from chemical burning, which produces carbon output.
Why Invest in Nuclear Power?
Nuclear power has long found opposition from environmentalists specifically because of the challenges associated with disposing radioactive waste. Even so, it’s anticipated that nuclear energy may play an essential role in a no or low-carbon energy future.
That’s right, nuclear energy is arguably more sustainable than natural gas and other fossil fuels.
In recent years, moving energy sources from coal to natural gas has been a key step toward decarbonizing. Switching from coal to nuclear power, however, is more “radically decarbonizing.” In fact, the only greenhouse gases released in the production of nuclear power are those associated with the “construction, mining, fuel processing, maintenance, and decommissioning” of a plant.
Another perk of nuclear power plants is that they offer a much higher capacity (that is, a greater percentage of time that the power plant spends producing energy) than both renewable energy sources and fossil fuels.
Consider that in the United States in 2016, “nuclear power plants, which generated almost 20 percent of U.S. electricity, had an average capacity factor of 92.3 percent, meaning they operated at full power on 336 out of 365 days per year” (with many of the days not in operation used for maintenance). This is much different than other power sources including U.S. hydroelectric systems, which delivered power only 38.2 percent of the time (138 days per year); wind turbines, which delivered power only 34.5 percent of the time (127 days per year); and solar electricity, which delivered power only 25.1 percent of the time (92 days per year), according to information provided by the U.S. Energy Information Administration. Coal and natural gas plants generally only generate power about 50 percent of the time.
In this sense, nuclear energy generation is more reliable and efficient.
So, do fewer carbon emissions and greater capacity outweigh radioactive waste? It can.
First it’s worth mentioning that non-nuclear energy, like coal, actually releases some radiation. Secondly, radioactivity decreases over time, unlike the waste products of other energy-production methods. Currently, interim storage facilities are used to manage nuclear waste until its radioactivity is decreased such that it can be disposed of. Storage containers, age, however, and when they do, they can leak toxic materials.
But, new technology is offering better storage solutions. Specifically, storage of waste in deep geological repositories is more secure and environmentally friendly. In Finland, the world’s first ever deep geological repository for spent fuel is under construction. The repository, named Onkalo, “is a game changer for the long-term sustainability of nuclear energy,” according to Director General Rafael Mariano Grossi.
The facility is roughly 450 meters below ground level and will collect all of the spent fuel from Finland’s nuclear power reactors for thousands of years. This is remarkable considering that sustainably developing nuclear power is anticipated to be an important step in preventing climate change.
Investors should know that even in a politically divided America, both “congressional Republicans and Democrats have shown their support for a robust domestic reactor fleet and for a strong civil nuclear export program,” according to EnergySource. As the U.S. ramps up its efforts to meet climate change goals, investors have the assurances of a growing and evolving nuclear energy market.
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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the January 4, 2021 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer or custodial services.
Insurance Technology
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Insurance companies often face fierce competition with each other for many of the same customers. In the U.S., the car insurance market, for example, is dominated by a handful of major players. The 10 largest companies in the industry control approximately 72% of the market, according to Value Penguin by Lending Tree.
The winners and losers of each year are determined by which companies pick up more market share. In 2019, Progressive notably gained more than a percentage point of the market share in the auto insurance industry.
Insurance, however competitive, is an industry that seems entrenched in archaic processes.
This might not be the case for long, though – the insurance industry is expected to change dramatically in the next five to ten years, according to McKinsey. The firm expects the industry to shift as customer expectations and technology rapidly evolve.
Insurance technology i.e. insurtech, or the innovative use of technology in the insurance industry, seeks to bring greater value to customers and companies. And it’s not going unnoticed. According to PricewaterhouseCoopers, “insurtech has become a powerful driver of change in the insurance industry.”
In fact, the number one risk facing the global insurance industry is technology modernization, according to PwC. To remain competitive, companies need to keep their tech improving and their processes modernizing.
What Is Insurance Technology?
Insurtech “is a term used to refer to technology designed to enhance the operations of insurance firms and the insurance industry as a whole.” Insurance technologies include big data, artificial intelligence, consumer wearables, and smartphone apps, which are ushering out the old processes of insurance for new ones.
These new technologies are extremely valuable to insurance companies; insurtech companies offer pay-per-use and an emphasis on loss prevention and restorative services, according to PwC.
According to Duck Creek Technologies, there are 8 top technology trends in insurance.
Predictive analytics: Predictive analytics analyzes data to make predictions about the future. In insurance, technology is most used for: (1) pricing and product optimization; (2) claims prediction and timely resolution; (3) behavioral intelligence and analytics to predict new customer risk and fraud; (4) uncovering agent fraud and policy manipulation; (5) optimizing user experience through dynamic engagement, and (6) big data analysis.
Artificial Intelligence (AI): In the insurance industry, like in many industries, artificial intelligence is helping companies to personalize experiences and make business processes more accurate and expedited.
Machine learning: Machine learning is the ability of a program to learn through a variety of algorithms. Machine learning is helping to improve and even automate the claims process by utilizing pre-programmed analysis.
Internet of Things (IoT): Sharing data from smart devices can save customers money on policies. In 2019, 34.8 million homes in the U.S. were considered smart homes. Because smart home features increase safety and decrease energy usage, insurance companies can use them to better assess risk and reduce costs for consumers.
Data: In the insurance industry, social media is more than a tool for marketing. Not only can social media analytics be used to increase sales, it can also be used to improve loss ratios.
Telematics: Do you plug a device that monitors your car’s use and speed to get a better price? Telematics are like a “a wearable device for your car.” Telematics are thought to help both insurance companies and insurance customers by encouraging better driving habits, lowering claims costs for insurance, and making carrier to customer relationships more proactive than reactive.
Chatbots: Chatbots are a growing phenomenon. Insurance companies can use bots to help customers apply for insurance or file a claim, freeing up employees to help with more complicated needs. For example, Geico offers Kate, a virtual assistant that can quickly help customers with information like the current balance on an auto insurance policy, the date of a next payment, or by providing access to policy documents 24/7.
Drones: While it might be easier to imagine drones dropping off packages for customers than administering insurance, drones are gaining a role in insurance. For example, how does a virtual visit to assess risk or damage sound in the COVID-19 pandemic? That’s what programs like the Remote Visit application offered by FM Global are doing. Another example, Farmers’ Kespry drone program, was launched in 2017 to review roof damage following weather events, leading to faster assessment turnaround and increased safety for claims reviewers.
Why Invest in Insurance Technology?
The insurance industry is ripe for innovations of all kinds.
According to PwC, Global insurance technology investments in 2018 totaled $4.15 billion. 2020 expedited the adoption of technology in the insurance industry. This is no surprise considering that insurtech facilitates things like virtual sales, virtual claims interactions and expense reduction, according to Deloitte.
Despite the pandemic-induced economic uncertainty, “insurtech industry investments in the aggregate appear to be as robust as ever,” according to Deloitte. $2.2 billion in investments in insurtech were recorded in the first half of 2020 alone.
It’s not just disruptors to the industry to be on the lookout for. Legacy carriers that successfully adopt technology internally will also benefit in the long term.
According to Sam Friedman, insurance research leader at the Deloitte Center for Financial Services in an interview with Insurance Business America: “I don’t see a behemoth insurtech out there that’s going to essentially end the insurance business as we know it, and take over massive amounts of market share….Where insurtech is having a huge impact is in helping insurers become better at what they do.”
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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the January 4, 2021 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer or custodial services.
Aquaculture
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When you are shopping in the grocery store or picking out dinner in a restaurant, do you insist on wild-caught fish? Do you care if your fish is farm raised? Turns out, most people don’t. According to the United Nations, about 47 percent of the world’s total fish supply comes from aquaculture. This translates to a global aquaculture market that is expected to grow to more than $52.4 billion by 2026.
According to the Food and Agriculture Organization of the United Nations (FAO’s) 2020 report, “The State of World Fisheries and Aquaculture 2020,” per capita fish consumption grew from 9 kilograms in 1961 to 20.5 kilograms in 2018, equating to around 1.5% growth each year. Per the report, in 2017, fish consumption accounted for 17% of the world population’s intake of animal proteins, and 7% of all proteins consumed.
That’s a lot of fish, and a huge opportunity for the aquaculture industry.
The market is responding to huge demand growing fast, with annual fish production expected to expand from 179 million tons in 2018 to 204 million tons by 2030. According to the FAO, aquaculture production specifically is projected to reach 109 million tons in 2030, representing an increase of 32% compared to 2018.
Still, most people might be surprised to learn that the “the number of fish eaten from fish farms is roughly even with the number of wild fish consumed, especially as the demand for fish has grown,” according to UC Santa Cruz researcher Anne Kapuscinski.
Here’s what investors should know about the aquaculture industry.
What Is Aquaculture?
Simply put, aquaculture is the breeding, rearing, and harvesting of fish, shellfish, algae, and other organisms in all types of water environments, according to the National Oceanic and Atmospheric Administration (NOAA).
Aquaculture often takes place in coastal marine waters and the open ocean. Aquaculture in the US produces numerous species including oysters, clams, mussels, shrimp, seaweeds, and fish such as salmon, black sea bass, sablefish, yellowtail, and pompano. In addition to producing food, aquaculture restores habitat, replenishes wild stocks, and rebuilds populations of threatened and endangered species, according to NOAA.
According to the Agricultural Marketing Resource Center, the top five fish producing countries in 2019 were China (63.7 million metric tons), Indonesia (16.6 million metric tons), India (5.7 million metric tons),Vietnam (3.6 million metric tons) and Bangladesh (2.2 million tons). Asia accounted for 89 percent of world aquaculture production by volume, most of which was produced by China.
Why Invest in Aquaculture?
The world’s appetite for fish isn’t anticipated to slow down anytime soon. By 2030, the FAO anticipates that the global human population will eat 30 million tons of fish.
In part, that’s because the world is demanding more protein than ever. Two strong drivers of the growing aquaculture industry include an increasing population growth and protein consumption per capita. Where this growth can potentially leave oceans overfished and depleted, aquaculture offers a creative solution.
According to Forbes, the fish industry “is a decade or more behind all other production animals with respect to innovation — and thus is one of the more attractive opportunities…for agtech investors and startups alike.”
The industry, however, is not without challenges. From bacterial and viral infections among densely populated fish to environmental impacts, aquaculture isn’t perfect.
There is, however, ample opportunity for scientific solutions. For investors, this means investment opportunities in everything from improved vaccines to fish food to genetic engineering of fish that are more resilient and adaptable. According to Global Market Insights, the global aquaculture vaccines market alone will reach $290 million by the year 2025. Even more, supplying nutrients to the aquaculture industry is a $60 billion opportunity.
Investment in fish farming is happening now, and happening here. In November 2020, the company Pure Salmon announced that it will build a large indoor fish-farming operation in Virginia. Pure Salmon will invest about $228 million in the equipment and facility, which according to the news release, would be the “world’s largest vertically integrated indoor aquaculture facility.”
While aquaculture is lauded as more sustainable by comparison to the practice of overfishing, for example, there are some doubts about the ethics of it. To name a few, wild fish are often caught to feed farmed fish, questioning the efficacy of the system. Additionally, fish waste in densely populated open ocean farms can deplete oxygen in the surrounding marine environment. That’s not to mention genetic engineering, the living conditions of farmed fish, or other considerations.
For investors interested in environmental, social and governance (ESG) issues, the Coller FAIRR Protein Producer Index can help. The Coller FAIRR Protein Producer Index is the world’s only comprehensive assessment of the largest animal protein producers on critical ESG issues.
The market demand for fish isn’t expected to slow down. And as such, aquaculture is expected to grow as a crucial industry that helps to feed the world’s population. According to the FAO, “to ensure a food secure future for all, the fisheries and aquaculture sector is key.” This means that there is ample opportunity for investors as the fish farming market continues to grow and develop.
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The information and data are as of the December 21, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Precious Metals
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Nicknamed the “crisis commodity,” gold is an investment that people flock to when the world seems uncertain. And it’s no surprise— gold has been long associated with the gods, immortality, and wealth itself.
In the midst of geopolitical and macroeconomic uncertainty, gold also provides portfolio stability. On the more recent historical record, gold has performed well in the worst of times, including the 2008 financial crisis and during the market fluctuations in the 1970s. This is in part because of the fact that, as the value of the dollar drops, the demand for gold tends to increase.
Geopolitical and macroeconomic uncertainty seem to describe 2020 well enough. So, it’s no surprise that these days, the demand for gold and other precious metals is up.
But precious metals like gold are more than old forms of currency or components of jewelry. They are also used in car engines, dental work, our phones, as components of medical equipment and much more. Here’s why you should consider adding precious metals to your portfolio.
What are precious metals?
Metals like gold were historically a form of currency but they also have industrial applications in dentistry and electronics. For example, gold is used in computer memory chips, electronic components for cell phones and other devices, dental filling including crowns and bridges, surgical instruments, medical treatments, telecommunication satellites, and specialized glass.
It might be surprising to learn that while China, Australia and Russia are the world’s major producers of gold, the U.S. is the fourth-largest gold-producing nation. In 2019, the U.S. produced 6.1% of the world’s total gold production for the year coming from states including Nevada, Alaska, Colorado, California, and Arizona.
While gold is the best-known precious metal for investment, it isn’t the only one. Investors should also consider silver,platinum, and palladium.
Like gold, silver has historically functioned as currency. Unlike gold, however, silver tends to play a stronger role as an industrial metal. Whereas only about 10% of the demand for gold is driven by industrial use, about 60% of the annual demand for silver is driven by industrial use. That said, the gold market is larger than that of the silver market.
Silver today is used in batteries, solar panels, cell phones and other electronic devices, nuclear rods, antifreeze, ointments, mirrors, specialized glass, engine bearings, water filtration systems, dental fillings, as well as for silver inputs to industrial items including electrical appliances and medical products.
Platinum, another precious metal, is even more rare than gold, which often drives its prices higher than that of gold. An industrial metal, platinum is most notably used for automotive catalysts. Catalytic converters are exhaust emission control devices that minimize pollutants, and they are in growing demand. The automotive industry is the world’s largest consumer of platinum.
Palladium is an even lesser-known precious metal but it is found in Russia and South Africa, as well as in the U.S. and Canada. Palladium is approximately 30 times as rare as gold. In such high demand that exceeds supply, palladium, like platinum, has exceeded the price of gold in recent years.
Palladium is used for a variety of things, from catalytic converters (like platinum) to dentistry, medicine, chemical applications, jewelry, and groundwater treatment. Increasingly stricter environmental laws and pollution restrictions mean that manufacturers are required to increase the amount of palladium in catalytic converters.
Why invest in precious metals?
Precious metals offer investors much-needed diversification. Because precious metals aren’t very closely correlated with stocks, bonds, or real estate, they help buffer portfolios in times of uncertainty. For this reason, some advisors suggest putting 5 to even 10% of an investor’s portfolio with precious metals, depending on their circumstances and goals.
The performance of precious metals in today’s unpredictable market isn’t disappointing. In August 2020, the price of gold hit an all-time high, up more than 36% from the start of 2020. While it hasn’t held that all-time value, its jump demonstrates that gold is a relatively safe bet when the markets are in flux.
While buying bullion might seem like an obvious and safe bet (the investor owns physical gold or silver), it’s not for every investor. It requires a safe storage site, for example, with investors often choosing to keep their valuables at a bank, which can be costly. It also often entails the seller taking a cut on the sale.
Unlike the markets for gold and silver, the market for palladium is small, with only a handful of companies that offer exposure to palladium. And while treasure chests are great, precious metals (especially in the cases of platinum and palladium) have practical applications that drive their demand.
Investing in precious metals isn’t an end-all, be-all answer, but it is a path for diversification that many investors choose, especially with the world in flux.
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The information and data are as of the December 15, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer or custodial services.
Wearables
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How many steps have you gotten today? For many of us, that question might cause us to automatically glance at our wrists.
Smart watches, fitness trackers, high-tech clothing, glasses, and more— wearables have gone from a futuristic idea for health and wellness to the new normal.
While the big names including FitBit, Apple Watch, and Samsung lead the way, they aren’t the only players in the market.
WHOOP, for example, is a Boston-based digital fitness company that closed a $100 million Series E financing round in late October. Whoop, a sponsor of many athletes across sports, is designed to help athletes determine whether they need to rest or push themselves. The company is now valued at $1.2 billion, giving it unicorn status.
From sleep monitoring to calorie tracking and beyond, more and more people are opting to wear devices that collect health data and metrics and connect to each other.
These devices are advancing fast from simply counting steps. Apple’s Apple Watch, for example, enables users to perform an electrocardiogram heart reading. Matrix PowerWatch Series 2 can charge itself from solar power or body heat, instead of electricity.
Here’s what investors need to know about the current state of the wearable market and what its potential looks like.
What Are Wearables?
While wearables might seem new, they aren’t even a 21st century idea.
It’s thought that Leonardo da Vinci developed the first pedometer in the 15th century as a means to track the distance a soldier walked. Later, in the 18th century, Thomas Jefferson created the first pedometer in the US and introduced it to the American public. Beyond pedometers, most believe that a tiny abacus worn as a ring in the 17th century in China is the world’s oldest smartwatch of sorts.
These days, modern wearable technology quantifies human movement and records physiological metrics. Diagnostic wearable medical devices “monitor, control, and track an individual’s vital signs at regular intervals.” Different wearables measure different physiological information, including blood pressure, body temperature, respiratory rate, glucose quantity, heart rate, blood oxygen saturation, heart rate, muscle activity, or calories burned during exercise. These devices typically work autonomously and come in a variety of forms.
When did wearables get so popular, again? FitBit launched its first device in 2009, a wireless device that clipped onto clothing. The first model wasn’t smartphone connected. And while 2012 models linked directly to smartphones, it wasn’t until 2013 that FitBit released a wrist worn tracker. In 2015, FitBit sold 21.4 million devices and in 2016, it sold 22.3 million devices.
That’s not to mention smartwatches, which are technically wearable computers. Apple, Samsung, and FitBit dominate the smartwatch market today, which is anticipated to reach a market value of $130.55 billion by 2024 from $48.14 billion in 2018, indicating significant growth.
Wearables are getting smarter and smaller. Smart jewelry, as of 2020, includes the smart ring by OURA. A company named Joule is even working on a smart earing backing. Larger pieces have advantages, however. Smart clothing, for example, covers a larger area of the body and so can detect even more information. For example, Samsung has a patent for a shirt that can detect breathing issues and lung disease.
Another type of wearable, called “hearables,” is on the rise too.
According to Scotland’s National Health Service (NHS), “devices that are primarily intended to allow streaming of media to the device but that also offer a hearing enhancing function not dissimilar to a hearing aid.” The hearables market is estimated to grow to a $93 billion dollar market by 2026.
But wearables aren’t just… worn.
For instance, the first ingestible digital health feedback system, developed by Proteus Digital Health, was approved by the FDA in 2012. Wearables come in many shapes and sizes, and have an increasing number of uses and potential uses (and users).
Why Invest in Wearables?
In a world dealing with obesity and other chronic health conditions, wearables have the potential to shift medicine from the intervention stage to prevention.
According to the Centers for Disease Control and Prevention (CDC), 6 in 10 adults in the US have a chronic disease, such as heart disease, cancer, chronic lung disease, stroke, Alzheimer’s disease, diabetes, or chronic kidney disease. Lifestyle choices that influence chronic disease include tobacco use, poor nutrition, lack of physical activity, and excessive alcohol use.
That’s where wearables come in. By tracking personal habits, the user is able to make changes before things get out of hand.
While wearables are wildly popular, they have yet to tap the potential in the world of remote medicine. In fact, although remote monitoring tools have enormous potential for patients with chronic illnesses, they remain vastly underused. Case in point: “ninety-one percent of the patients who use wearables identify as an athlete, compared to the only 21 percent who said they have a chronic illness.” Nonetheless, wearable technology is a promising tool in the fight against chronic disease.
Wearables offer a myriad of potential health solutions, from monitoring key health indicators to minimizing touch on shared surfaces. Wearables can open doors in office buildings, for example. Wearables can also monitor and flag changes in body temperature. Over time, wearables can determine trends and track performance, offering increasingly personalized feedback and training opportunities.
Increased adoption of wearable devices and market potential in medicine make wearables a worthy investment.
FitBit has close to 500,000 subscribers to FitBit Premium, with the pandemic strengthening business as consumers seek ways to stay healthier from home. As part of its growth plan, FitBit plans to continue to promote subscriptions that foster engagement, as well as develop telemedicine potential. For example, the company may promote add-on devices such as a connected thermometer or an otoscope that can lessen the need for in-person doctor visits. It’s also conducting research to determine how effective the technology can be in detecting COVID-19 early.
Apple also has its eye on health, specifically monitoring key indicators in senior citizens.
The wearable market isn’t expected to slow down anytime soon. While wearables have shown significant growth thus far, they have loads of potential, especially as it relates to increasing integration with healthcare in a world riddled with chronic disease and reeling from a pandemic.
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Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the November 17, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Magnifi Names Broadridge Executive as Chief Product Officer
Investment in talent comes on the heels of stellar market adoption since launch earlier this year
BOULDER, Colo., November 17th, 2020 - Magnifi, a TIFIN Group company, and the world's first natural-language powered investment marketplace today announced the appointment of Broadridge Financial veteran, Tom Van Horn, to serve as the company's first Chief Product Officer. Tom brings deep experience from leading various technology and innovation roles within the financial services industry and will lead the evolution of Magnifi’s platform through its next stage of growth.
On-trend with tenured executives departing financial services and technology incumbents to lead innovative FinTech start-ups, Tom’s arrival at Magnifi coincides with high-velocity market adoption. As of November 1st, 2020, Magnifi’s retail and professional users influence over $320B in Assets with over 150K users actively searching for investments on Magnifi. Founded by Dr. Vinay Nair, Chairman of The TIFIN group and a serial FinTech entrepreneur, Magnifi launched early in 2020 and has since been featured on national broadcast and financial trade media. Andrew Ross Sorkin of CNBC Squawk Box called Magnifi “The Google for Investments: The start-up changing the way investors access investment ideas.”
“Magnifi is unlike anything I have seen in the wealth and asset management industry during my career in FinTech,” said Van Horn. “With its foundational elements of patented natural language recognition and robust investment intelligence, the platform breaks down the opaqueness of investment products and makes them more accessible for individual and professional investors. I could not be more energized to engrain myself with such a talented group of professionals changing the investment marketplace as we know it.”
Van Horn brings almost 20 years of experience across different product, technology, and executive roles to Magnifi. He was most recently Vice President of Product Management at Broadridge Financial where he led product growth, innovation, and execution for Broadridge’s wealth management segment. In this role, Tom has built a track record of innovation and product execution across the largest North American wealth management firms and Broker-Dealers ranging from front to back-office wealth management solutions. Prior to his role with Broadridge Tom was Senior Vice President of Operations with leading portfolio management company FinFolio and Chief Compliance Officer/Director of Operations for a leading wealth management RIA firm in Denver, Colorado.
“We are delighted to have Tom join Magnifi’s leadership team. When top industry talent like Tom decides to come on board, it is a wonderful validation of our traction and potential ” said Rick Hurwitz, Chief Executive Officer of Magnifi. "With Tom’s deep industry roots and track record of shaping successful products, we are well-positioned to enhance the Magnifi platform to best serve our clients.”
About Magnifi
Magnifi is a financial search platform that is changing the way people shop for investments. The world's first semantic search engine for finance, the platform helps financial advisors, portfolio managers, and everyday investors find, compare, and act on investment options. In an era with thousands of ETFs, mutual funds, stocks, and model portfolios to choose from, Magnifi demystifies and simplifies investing, providing insights and information that save time and help investors make smarter decisions. Learn more at www.magnifi.com
About the TIFIN Group
The TIFIN Group is a FinTech studio that starts and operates companies focused on shaping the future of investor experience to create better outcomes for investors. TIFIN companies combine the power of modern technology, investment science, and behavioral design to advance themes of interest to investment managers, advisors, and investors.
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Niharika Shah
Chief Marketing Officer
The TIFIN Group
[email protected]
Nanotechnology
The term nanotechnology might seem like something reserved for a science lab, but it is as close as the latest pregnancy announcement that you may have heard.
That’s right, the second pink line on a pregnancy test only appears if the hCG hormone is present. If the tester is pregnant, gold nanoparticles tagged with a specific antibody attach to the hCG on the second strip.
And nanotechnology is doing more than telling women they are pregnant. Advances are improving bulletproof vests, making plastic beer bottles possible, and coating products to make them better— from flame resistant furniture to fortified glass surfaces to antimicrobial bandages.
The global nanotechnology market is projected to reach $2.23 billon by 2025 according to a study by Allied Market Research. This growth is credited to increasing applications across industries, including communication, medicine, transportation, agriculture, energy, materials and manufacturing, and consumer products.
What is Nanotechnology?
A nanometer is the microscopic measurement of one billionth of a meter. For perspective, consider that one sheet of paper is roughly 100,000 nanometers thick.
According to the National Nanotechnology Initiative, nanotechnology is, “the study and application of extremely small things and can be used across all the other science fields, such as chemistry, biology, physics, materials science, and engineering.” In other words, it’s the ability to manipulate and create matter, enhancing it for the purpose it will serve, at the molecular level.
Why Invest in Nanotechnology?
Nanotechnology is an exciting investment opportunity because of its growing, impactful applications across industries.
Nanotech innovation and their applications have a range of biomedical potential. In medicine, specifically, nanotechnology is solving real-world health challenges by innovating from prevention to diagnostics to treatment.
For example, antibiotics have long been a standard treatment for infection. However, the overuse of antibiotics has resulted in increasingly drug-resistant bacteria. According to the Centers for Disease Control and Prevention (CDC), there were an estimated 119,247 cases of drug-resistant Staphylococcus aureus bloodstream infections and 19,832 associated deaths nationwide in 2017.
As an alternative to antibiotics, novel nanomaterials can combat pathogens, not only offering a more targeted delivery of medicine and therapeutics, but also a more targeted treatment.
The potential for nano-driven solutions to public health issues is not lost on big investors.
Novo Holdings REPAIR Impact Fund, recently invested EUR 7 million in Mutabilis, a company developing novel antibacterials for drug-resistant bacteria.
And nanovaccines against both bacteria and cancerous tumors are also in the works, according to a recent report from the Advanced Materials “Biomimetic Nanotechnology toward Personalized Vaccines.” Not only can nanotechnology “increase the potency of vaccines,” it can personalize applications of both vaccines and treatments with the potential for tremendous social and economic impact.
Nanotechnology is also helping patients suffering from endometriosis, a condition that affects 10% of childbearing-age women.
The traditional treatment for the condition was to surgically remove lesions, which often recur after surgery and require multiple invasive surgeries. Using nanotechnology, scientists instead employ tiny polymeric materials packed with a specialized dye. The tiny materials fluoresce to show where the lesions are (essentially providing imaging) and then kill the lesion cells by flaring to 115 degrees Fahrenheit upon exposure to near-infrared light, helping to remove the lesions.
Nanotechnology is also improving cardiovascular care by reducing the size and improving the effectiveness of instruments used for cardiac surgery.
There’s even the potential for nanorobots to operate within the human body, analyzing and reporting on specific tissues.
Nanotech also has broad potential beyond the healthcare field.
Nanotechnology is constantly improving electronics, which, as they become smaller and smaller, also become increasingly harder to manufacture. Nanotech can shrink these technology tools so that they fit in our pockets while also making them better at processing data, increasing memory space, making wearable tech lighter and more portable, and improving functionality overall.
Nanotechnology is also responsible for the lithium-ion battery. Offering a minimum power draw and high-energy-density, these now commonplace batteries weren’t on the market until the 1990s. Since then, they’ve become increasingly more powerful and less expensive.
And yet, the innovation hasn’t stopped. The world is now taking stock of graphene, a single, thin layer of graphite. Although graphene shares the same atoms as graphite, its properties are extremely different because the atoms are arranged differently.
Nanotech Energy, a battery and graphene technology startup, recently secured $27.5 million in funding, according to the company. Founded in 2014, the company plans to release a non-flammable, environmentally friendly lithium battery that charges much quicker than those currently on the market in the coming year.
How to Invest in Nanotechnology
The growth potential for nanotechnology is impressive, but the sector doesn’t come without risk. Although nanotech has been around for years, it is still considered an emerging field and the industry is still sorting out where the best, most profitable applications lie. This can make investing in individual nanotechnology companies a risky proposition.
However, a search on Magnifi indicates that there are a number of ETFs and mutual funds available to give investors broad exposure to this industry without concentrating their bets on any one company.
Unlock a World of Investing with a Magnifi Account
Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the June 8, 2021 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.