Blockchain
It seems as though every time we turn on the news there are new stories about enormous data breaches.
There was the massive 2013 Yahoo breach in which all 3 billion user accounts were compromised, and then there was the 2017 Equifax breach that exposed the personal information of 147 million people.
Data breaches are becoming more widespread and impactful, with 2019 set to be the worst year on record. It is perhaps not surprising that, according to the Pew Research Center, 70% of Americans feel that their personal information is less secure than it was just five years ago. Businesses and governments are tasked with securely storing mountains of complex and highly-personal data, and they are beginning to turn to a novel technology known as “blockchain” to help.
Blockchain is a technology solution that solves some of the problems associated with data storage and security. When an organization is solely responsible for maintaining its database, valuable information may be lost in the event of a breach or disaster. A freak hurricane could damage vital data centers (as happened in 2012 during Hurricane Sandy), or an adept hacker could detect a vulnerability in a government’s website and hold critical data hostage (as happened in 2019 in Baltimore, Maryland). With blockchain, data is securely shared across a distributed network in which all parties have access. The nature of the technology is such that damage to one part of the network does not compromise the rest. For this reason, among many others, businesses and governments are turning their attention – and investments – to blockchain.
For those interested in the investment potential of this innovative technology, there are a few important points to understand.
What Is Blockchain?
According to the software company SAP, blockchain is most simply defined as a “reliable, difficult-to-hack record of transactions – and of who owns what. Blockchain is based on distributed ledger technology, which securely records information across a peer-to-peer network.”
The “block” in blockchain describes the data that is entered into the network, while the “chain” in blockchain refers to the chronological sequence in which blocks are entered. Data is approved for entry via consensus of other network participants, and once entered it cannot be changed. In this way, there is a complete, sequential, and verifiable record-keeping of the network’s data that is available to all participants.
At first glance, this may not seem like a revolutionary concept, but it is important to note that the decentralized nature of blockchain is highly novel and has far-reaching applications.
An unknown person (or persons) going by the name Satoshi Nakamoto invented the blockchain concept and shared it with the public in a groundbreaking 2008 paper about a proposed digital currency system. That currency system became known as Bitcoin, and the spread of blockchain technology gave rise to a vast ecosystem of other cryptocurrencies.
While most people only associate blockchain with Bitcoin and cryptocurrency, the technology has much broader applications across a variety of industries. For instance, logistics firms are turning to blockchain technology to modernize their supply chains. Danish shipping company Maersk recently launched a blockchain-powered logistics platform called TradeLens, which it says will provide improved visibility into the movement of shipments around the world.
Healthcare is another sector that stands to benefit tremendously from the adoption of blockchain technology. As any adult in the U.S. can attest, healthcare records are notoriously scattered from provider to provider. Implementing blockchain technology has the potential to make critical health data more accessible and secure while eliminating barriers that currently stifle communication between doctors, patients, and insurers.
Data is at the core of any modern organization, and it seems likely that blockchain will be an increasingly important tool in the modernization of data management practices.
Why Invest in Blockchain?
Blockchain is an extremely valuable technology with significant investment potential.
As noted by James Wester, Research Director at International Data Corporation (IDC): “Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase.”
IDC estimates that global spending on blockchain solutions will reach nearly $2.9 billion in 2019, an increase of nearly 88% from 2018. IDC expects annual spending to climb to $12.4 billion by 2022, with a 76% annual growth rate between 2018 and 2022.
Investment in private blockchain companies is also quite robust. In the U.S., for instance, investments reached about $1.1 billion in 2019 – a healthy figure considering recent corrections in cryptocurrency markets.
Big technology companies understand blockchain’s potential and are adjusting their services accordingly. Companies such as IBM, SAP, and Oracle offer blockchain-as-a-service to help businesses create their own blockchain networks. Companies that are prepared to offer innovative blockchain solutions are well-positioned for the coming changes to the data management landscape, and startups researching blockchain solutions are likely to garner significant interest from established companies. These market dynamics are likely to create a rich environment for outside investment.
Governments around the world are also taking notice of blockchain’s enormous potential. The U.S. Department of Homeland Security is investing heavily in blockchain startups because of the technology’s cybersecurity advantages in making digital systems more resilient. The Republic of Georgia recently partnered with Bitfury, a Netherlands-based blockchain technology company, to digitize and migrate the country’s land registry onto a blockchain-based network. Meanwhile, Chinese President Xi Jinping recently announced that China will make blockchain a top priority in the country’s new innovation push, a move that may galvanize more investment and research in the West.
In this space where both business and government recognize blockchain’s potential, savvy investors are well-positioned to capitalize on novel applications of this innovative technology.
How to Invest in Blockchain
But, despite all of this potential and recent growth, blockchain remains a very early-stage technology. It has only existed in its current form since 2008, and the industry that has sprung up around it is even younger than that. With that youth comes volatility, which investors are seeing in the prices of pure-play blockchain stocks. However, investing in a mutual fund or ETF that offers exposure to blockchain can be a way to temper some of this volatility. A search on Magnifi suggests that there are a number of funds available today for those investors interested in investing in blockchain technology without buying shares in the associated companies themselves.
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The information and data are as of the January 9, 2020 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Mobile Payments
When is the last time you wrote a check to pay for something or left the house with a set amount of cash in your wallet for errands? For a growing number of people worldwide, it is entirely possible that they may not be able to recall. In the U.S., the use of credit and debit cards have largely replaced the use of checks, and carrying cash is increasingly seen as unnecessary and inconvenient. This dramatic transformation of our payment practices can be explained in part by the emergence of mobile payment technology for smartphones in recent years.
The rise of mobile payments has transformed the way we pay for everyday items and simplified how we share money with one another.
With smartphones in almost everyone’s pockets and apps that transfer money digitally in seconds, the days of frantically searching for an ATM or cursing yourself for leaving your wallet at home are coming to an end. Who needs a checkbook when you can quickly transfer your friend that $25 you owe them with a few taps on your smartphone?
What Are Mobile Payments?
According to Square, a leading mobile payment technology company, mobile payments are defined as “regulated transactions that take place digitally through your mobile device.”
Most mobile payments are conducted through a mobile wallet or mobile money transfer. A mobile wallet is a smartphone app that securely stores credit or debit card information. This information can be digitally communicated to a business’s point-of-sale system by holding the smartphone near the business’s payment reader.
Popular mobile wallet apps include Apple Pay, Samsung Pay, and Android Pay, and companies that provide businesses with software and devices to accept mobile payments include Square, SumUp, and PayPal.
In the case of mobile money transfers (also sometimes referred to as “peer-to-peer” or “P2P” payments), funds are transferred between users on an app. Typically, a user creates an account on the app, links their bank account, debit card, and/or credit card information with the app, and “adds” accounts of other individuals who use the app. Money may then be requested from or sent to the accounts of these individuals.
Popular money transfer apps include Venmo, WorldRemit, and Azimo.
Mobile payment companies monetize the services they offer in a variety of ways. Square, for instance, charges businesses a fee ranging from 2.5% to 3.5% for each transaction (with a flat fee of 10 cents added to each transaction fee). Venmo, on the other hand, charges its users a 3% fee for sending money via credit card instead of debit card. Both companies offer expedited access to transferred funds for a fee. Since its November 2015 IPO, the stock price for Square has risen from about $8 per share to about $65 per share (as of November 2019). Since its July 2015 spinoff from eBay, the stock price for PayPal (Venmo’s parent company) has risen from about $40 per share to about $103 per share (as of November 2019).
A Fast Growing Market
According to a 2018 report by GSMA, 143 million new mobile payment accounts were opened worldwide in 2018, bringing the total number of accounts to 866 million. Approximately $1.30 billion was processed every day via mobile payment in 2018, and a typical active user moved an average of $206 per month.
The speed, efficiency, and security offered by mobile payments help explain why this technology has become so popular across the globe. The rise in this technology is also providing people who have traditionally been excluded from formal banking systems with access to life-changing financial services.
According to the World Bank, “Financial inclusion is a building block for both poverty reduction and opportunities for economic growth, with access to digital financial services critical for joining the new digital economy.”
Why Invest in Mobile Payments?
For those interested in investing in this rapidly-growing sector, however, there are a few important points to understand.
The mobile payment companies mentioned thus far are undeniably successful. Square’s total net revenue in the third quarter of 2019 was $1.27 billion, which is a 44% increase over 2018’s third quarter earnings. PayPal’s total net revenue for the same quarter was $4.38 billion, with Venmo accounting for $400 million (double the $200 million from the third quarter in 2018). With steady growth and a seemingly-unlimited appetite for disrupting the value of traditional financial institutions, there has never been a better time to consider investing in companies offering mobile payment solutions.
While Square and Venmo may be the first that come to mind with respect to mobile payments in the U.S., there are many other companies that have arisen in recent years in other parts of the world that are just as innovative and, in terms of active users, arguably more successful. Whether it’s WeChat Pay in China, Paytm in India, or M-PESA in Kenya, entrepreneurs across the globe have known about the transformative potential of mobile payments for years.
The acceptance of mobile payments as a trusted and valued financial tool has occurred at a faster rate and to greater effect in the developing world than in the U.S. For instance, an eMarketer report found that in 2019, approximately 80% of smartphone users in China regularly use mobile payments, while only about 30% of smartphone users in the U.S. regularly make mobile payments.
It may seem as if there would be no room for growth with 80% of users currently accounted for in China’s market, but it is important to note that the 20% of smartphone users not regularly making mobile payments represent about 135 million people.
Not to mention, the 70% of smartphone users in the U.S. not regularly making mobile payments represent about 138 million people. Smartphone users in the U.S. have been slow to adopt mobile payments en masse, due in part to a widespread perceived risk regarding the security of digitally-transferred funds. As the population in the U.S. ages and more accurate information about the security and convenience of mobile payments filters out, it is likely that a much higher percentage of the population will adopt the technology.
In the meantime, companies at the cutting edge of mobile payment innovation will continue to reimagine and redefine how we think about our finances.
How to Invest in Mobile Payments
A search on Magnifi suggests that there are a number of different ways for investors to get involved in the fast growing Mobile Payments sector.
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The information and data are as of the November 20, 2019 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
QQQ
Another of the oldest exchange traded funds (ETFs) on the market, the Invesco QQQ ETF (QQQ) was launched in 1999 as a way for investors to track the tech-focused NASDAQ-100 index. Now, two decades into its run, QQQ remains in the top 1% of all NASDAQ-focused ETFs in terms of assets under management. As of 2019, QQQ has maintained a top 1% ranking in the Lipper’s Large-Cap Growth Category for the past 10 and 15 years and is the second-most traded ETF in the U.S. based on average daily volume.
QQQ’s holdings are broken down into six categories, each weighted differently. Information technology gets 44.44%, Communications 21.40%, Consumer Discretionary 16.90%, Healthcare 7.98% Consumer Staples 6.07% and Industrials & Utilities 2.83%. Its top holdings include Microsoft (11.21%), Apple (9.95%), Cisco (2.84%), Intel (2.60%, Adobe (1.74%), Paypal (1.63%), Broadcom (1.38%), Texas Instruments (1/31%), Nvidia (1.21%) and Qualcomm (1.12%).
QQQ’s expense ratio is 0.20% and it currently has about $82 billion in assets under management.
Rationale
Naturally, the most direct way to gain exposure to the holdings in QQQ is to buy its listed shares. But there are a number of good reasons for investors to reconsider that approach. There are a number of different versions of the QQQ approach, each with slightly different weightings, and for good reason. The tech-focused NASDAQ is famously volatile, so ETFs that track it generally try to smooth out these ups and downs through more active management and different weightings. Rather than buying QQQ shares themselves, investors interested in a technology ETF that’s either more conservative or more aggressive might consider buying funds that provide exposure to its top-weighted sectors, in order to spread out their investments even more broadly than QQQ does. After all, the return drivers that will benefit QQQ might also benefit other funds that are even more diversified.
Investing in QQQ
A search on Magnifi suggests that investors can gain access to the NASDAQ-100 via a number of different funds and other ETFs, including those shown below.
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This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. 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, custodian, investment advice or related investment services.]
SPY
Exchange traded funds (ETFs) are now one of the most popular publicly-traded investment vehicles on the market, with nearly $3.5 trillion in assets under management across all ETFs as of 2018, and it all started with the SPDR S&P 500 ETF Trust (SPY), which launched as the first-ever ETF on January 22, 1993. Named for the Standard & Poor’s Depositary Receipts, SPY tracks the S&P 500 stock market index and is today the largest ETF in the world with roughly $280 billion in assets under management.
The S&P 500 Index holds large cap U.S. companies across all 11 GICS sectors, and SPY is designed to mirror that weighting, effectively tracking the broad U.S. stock market. SPY’s top holdings include (in order): Microsoft (4.43%), Apple (4.37%), Amazon (2.81%), Facebook (1.85%), Berkshire Hathaway Class B (1.66%), JPMorgan Chase (1.61%), Alphabet (1.53% Class C and 1.52% Class A), Johnson & Johnson (1.37%) and Visa (1.22%).
The ETF’s gross expense ratio is 0.0945% and each share is designed to be worth 1/10 of the cash S&P 500’s current level.
Rationale
Naturally, the most direct way to gain exposure to the holdings in SPY is to buy its listed shares. But there are a number of good reasons for investors to reconsider that approach. SPY is weighted to directly mirror the S&P 500, with a heavy focus toward technology, but it is worth considering if that is the correct approach going forward. Rather than buying SPY shares themselves, investors interested in gaining exposure to the broad S&P 500 Index might consider buying funds that provide exposure to its top-weighted sectors, including information technology, healthcare and energy, in order to spread out their investments even more broadly than SPY does. After all, the return drivers that will benefit SPY might also benefit other funds that are even more diversified.
Investing in SPY
A search on Magnifi suggests that investors can gain access to the S&P 500 via a number of different funds and other ETFs, including those shown below.
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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.
This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. 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, custodian, investment advice or related investment services.]
Advanced Micro Devices (AMD)
Advanced Micro Devices (AMD) isn’t a household name for many people, but that doesn’t mean the company hasn’t has a massive impact on the daily lives of billions of people around the world. AMD is the second-largest supplier of microprocessors in the world, behind only Intel (INTC) in terms of market reach, and today is produces a wide range of microprocessor chips (for computers as well as mobile devices), motherboard chipsets, embedded processors and graphics processors for services, workstations, personal computers, mobile devices and more.
It’s also active in the market for graphics processes after acquiring ATI in 2006. Today it is number-two in graphics process unit sales after only Nvidia (NVDA). In 2018, AMD’s revenue was $6.48 billion and its market cap was about $45 billion.
Rationale
All that said, there are reasons for investors to think twice about investing directly in AMD. The most direct way to gain exposure to Advanced Micro Devices is to buy its listed shares, of course, but its participation in the extremely competitive computer hardware market might make many reconsider that approach. Companies like AMD must constantly innovate and find new ways to drive revenue as both technologies and consumer needs change and evolve. This can be extremely lucrative for those can stay ahead of the trends, but those fortunes can change quickly when a new technology or need is overlooked or claimed by a competitor. What’s more, as the number-two competitor in both of its primary markets – microprocessors (behind Intel) and graphics processing units (behind Nvidia) – Advanced Micro Devices is at the mercy of its larger competitors and is often forced to compete on price rather than its own innovations.
However, for investors interested in gaining exposure to the microprocessing sector, rather than buying AMD shares themselves should consider buying funds that provide exposure to Advanced Micro Devices and other similar firms. After all, the return drivers that will benefit AMD might also benefit other similar tech firms. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like Advanced Micro Devices through these types of funds.
Investing in AMD
A search on Magnifi suggests that investors can gain access to AMD via a number of different funds and ETFs, including those shown below.
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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. Try it for yourself today.
This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. 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, custodian, investment advice or related investment services.]
Visa (V)
Visa (V) is a financial services company that oversees a worldwide network of electronic fund transfers, through its Visa-branded credit cards, debit cards and prepaid spending cards. The company is an intermediary, working with banks and other financial institutions to offer Visa-branded financial services products for their customers. It was created in 1958 as a Bank of America spinoff, which first introduced the idea of an all-purpose credit card that could be used at a variety of merchants, rather than the revolving credit accounts that were popular at the time but limited in their use.
Visa’s products generally break down into three categories: debit cards, credit cards and prepaid cards. It also operates the Plus network of ATM machines as well as the Interlink EFTPOS point-of-sale network. In addition, Visa provides direct commercial payment solutions for a range of B2B users and, in 2014, partnered with Apple to support the iPhone maker’s Apple Wallet spending feature.
Visa operated the world’s largest card payments network until 2015, when it was surpassed by UnionPay, a Chinese credit card processor. Today the company has operations worldwide and processes more than 100 billion transactions every year. As of 2018, its revenues were more than $20 billion on a $280 billion market cap.
Rationale
The most direct way to gain exposure to Visa is to buy its listed shares. But investors have good reason to reconsider that approach given Visa’s exposure to the global financial system as a whole. As the second-largest financial services network operator in the world, V grows alongside overall global growth. But, when that consumer spending slows, so does Visa’s long-term growth plans.
However, for investors interested in gaining exposure to the financial services sector, rather than buying V shares themselves should consider buying funds that provide exposure to Visa and other similar firms. After all, the return drivers that will benefit V might also benefit other similar firms in financial services that are better diversified. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like Visa through these types of funds.
Investing in V
A search on Magnifi suggests that investors can gain access to Visa via a number of different funds and ETFs, including those shown below.
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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. Try it for yourself today.
This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. 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, custodian, investment advice or related investment services.]
AT&T (T)
Innovation is an American tradition, and few modern companies are as directly tied to that spirit as AT&T (T), the multinational holding company that can trace its roots back to the Bell Telephone Company, founded by telephone inventor Alexander Graham Bell in 1877. Today it is the world’s largest telecommunications company, the largest mobile services provider and the largest network operator in the U.S.
AT&T currently operates DirecTV, AT&T Mexico and a long list of other subsidiaries including Ameritech, BellSouth, Pacific Telesis and SBC Communications. It is also the parent company of mass media conglomerate WarnerMedia.
AT&T reported $170 billion in revenue in 2018. For the second quarter of 2019, it generated $35 billion from its communications business, accounting for roughly 80% of revenue. The company employs more than 250,000 and operates worldwide, including voice service in 225 countries and data service in 210 countries.
Rationale
The most direct way to gain exposure to AT&T is to buy its listed shares. But investors have good reason to reconsider that approach given AT&T’s long-term growth prospects and its current price. Much of T’s revenue is driven by landline service, which is dying out around the world. Although it is expanding into mobile communications service and other offerings, it is still tied to a fading technology.
However, for investors interested in gaining exposure to the communications sector, rather than buying T shares themselves should consider buying funds that provide exposure to AT&T and other similar firms. After all, the return drivers that will benefit T might also benefit other similar firms in communications that are better diversified. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like T through these types of funds.
Investing in T
A search on Magnifi suggests that investors can gain access to AT&T via a number of different funds and ETFs, including those shown below.
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a 14-day free trial of Magnifi Pro+
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. Try it for yourself today.
This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. 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, custodian, investment advice or related investment services.]
Alphabet (GOOG)
You know you’re one of the largest, most successful companies in the world when you can change your name and still not miss a beat in terms of investor interest. But that’s exactly what the conglomerate Alphabet (GOOG) did in 2015 when it was created as part of Google’s corporate restructure. Today, Alphabet is the parent company of Google as well as a number of its subsidiaries. The idea was to create a structure with “greater autonomy” and allow Google to expand into other businesses beyond simply internet services.
In addition to Google, Alphabet’s subsidiaries include Calico, DeepMind, GV, CapitalG, X, Google Fiber, Jigsaw, Makani, Sidewalk Labs, Verily, Waymo, Wing and Loon. It also oversees former Google projects such as YouTube, the Android mobile operating system and more.
Alphabet reported more than $110 billion in total revenue in 2017, 86% of which comes from advertising via Adsense and Google’s AdWords products, 53% of which operates outside of the U.S.
Rationale
The most direct way to gain exposure to Alphabet is to buy its listed shares. But investors have good reason to reconsider that approach given GOOG’s long-term growth prospects and its current price. What was once a high-growth internet startup is now a well-established digital enterprise, and the creation of Alphabet as the Google holding company only solidified that fact. GOOG itself is no longer a growth holding.
However, for investors interested in gaining exposure to the internet sector, rather than buying GOOG shares themselves should consider buying funds that provide exposure to Alphabet and other and other similar firms. After all, the return drivers that will benefit GOOG might also benefit other similar firms in internet services. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like GOOG through these types of funds.
Investing in GOOG
A search on Magnifi suggests that investors can gain access to Alphabet via a number of different funds and ETFs, including those shown below.
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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. Try it for yourself today.
This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. 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, custodian, investment advice or related investment services.]
Apple (AAPL)
Apple (AAPL) is a Silicon Valley legend. Literally founded in a garage – in this case, belonging to Steve Jobs’ parents in Los Altos – Apple got its start in 1976 when cofounders Jobs and Steve Wozniak began building the very first Apple personal computers by hand, shipping them in handmade wooden cases. Always the showman, Jobs later said that the company’s name was a nod to a “fruitarian” diet he was on at the time. He had just come back from an apple farm, and thought the name sounded “fun, spirited and not intimidating.”
That was then.
Today Apple produces far more than just Apple computers, including such products as the iPhone, Apple Watch, Apple TV, iPad, AirPods and much more, including a wide variety of Macbook laptops and Mac desktops.
Apple is among the world’s most valuable companies, with a net worth of more than $1 trillion and annual revenues of $265 billion in 2018. It is the world’s largest technology company by revenue and employs 123,000 full-time employees and maintained 504 retail stores in 24 countries as of 2018. There are currently more than 1.3 billion Apple products in use worldwide, ranking it as the world’s most valuable brand.
Rationale
A direct way to gain exposure to Apple is to buy the listed shares. But that can be a risky approach, given Apple’s focus on the consumer market. Consumers can be finicky, and what sells today (like iPhones) may not sell as strongly tomorrow or next year. As such, Apple is forced to constantly innovate in hopes of finding the next big tech trend. The company has done this successfully for more than 40 years, but the innovation cycle is accelerating.
A solution that can dampen some of that volatility is to buy funds that provide exposure to Apple and other similar firms, rather than AAPL shares themselves. After all, the return drivers that will benefit Apple might also benefit other similar firms in consumer electronics, computer hardware and personal entertainment. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like Apple through these types of funds.
Investing in AAPL
A search on Magnifi suggests that investors can gain access to Apple via a number of different funds and ETFs, including those shown below.
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Big Data
Big Opportunities in Big Data
We create an astonishing amount of data every day. From the photos we upload to social media, to the swipe of a card when we hop on the bus, the average person produces tremendous amounts of data at every turn. Delving into this collective ocean of data to find discrete patterns and trends may seem impossible, but innovative analytics are making it a reality thanks to Big Data.
Organizations across the globe are beginning to recognize the value in unlocking information imbedded in large, complex data sets.
Whether it’s hospitals using algorithms to catch infections early, researchers developing cutting-edge tools to map the furthest reaches of our universe, or the NHL deploying “smart pucks” to capture live data and enhance fan experience, our world is increasingly shaped by our relationship to data. Innovators at the leading edge of big data analytics stand to gain tremendously as technology improves and novel applications are discovered in the coming years.
For those interested in investing in this rapidly-growing sector, however, there are a few important points to understand.
What is Big Data?
Big Data refers to large, complex data sets that are difficult to process using traditional analytics. Included in this definition is the process of storing and analyzing the large, complex data sets.
According to IBM, a leader in big data analytics: “Analysis of big data allows analysts, researchers and business users to make better and faster decisions using data that was previously inaccessible or unusable. Businesses can use advanced analytics techniques such as text analytics, machine learning, predictive analytics, data mining, statistics and natural language processing to gain new insights from previously untapped data sources independently or together with existing enterprise data.”
And where does this data come from? Increasingly, it’s coming from internet-connected devices that we interact with every day. This growing network of sensors, relays and more is known as the Internet of Things (IoT).
Why Invest in Big Data?
According to the International Data Corporation (IDC), global revenues for Big Data analytics are forecast to reach $189.1 billion in 2019, a 12.0% increase over 2018 revenues. IDC also predicts the annual growth rate increasing to 13.2% throughout the next five years, with 2022 revenue reaching $274.3 billion.
Focusing in on specific sectors, the trend becomes even more pronounced. The value of big data analytics in the healthcare sector is projected to grow at an annual rate of 19.1% between 2018 to 2025, and the value of big data analytics in law enforcement is projected to grow at an annual rate of 17.5% between 2015 and 2022.
Organizations of all sizes are investing in big data solutions to address challenges and increase competitive advantage.
In a recent survey of executives at industry-leading firms, 92% responded that they are accelerating the pace of investment in big data and AI. Analytics are also becoming more affordable, bringing the technology within the range of small and midsize businesses. According to the IDC, roughly one quarter of global revenues for big data analytics in 2019 will come from businesses with less than 500 employees.
And 2019 has already been marked by a number of notable acquisitions in the data analytics market. Salesforce acquired Tableau for $15.7 billion on August 1, and Google is in the process of acquiring Looker for $2.6 billion.
As noted by Amir Orad, CEO of Sisense, a business analytics software company: “The value of the data analytics market can’t be ignored. The Looker and Tableau acquisitions demonstrate that even the biggest tech players are snapping up data analytics companies with big price tags, clearly demonstrating the value these companies have in the larger cloud ecosystem.”
In 2015, it was estimated that the possible value of intangible assets, including data, in the United States alone was roughly $8 trillion. As organizations increasingly come to view their data as capital, it will become more and more of a strategic imperative to put that capital to work.
This presents a unique opportunity for investment. As enterprises invest in big data analytics, so too should savvy investors consider the companies supplying the analytics.
How to Invest in Big Data
What’s the best way for investors to get involved in this growing tech sector? Big Data crosses over a number of different specialty areas, including cloud storage, data science and analytics, but a search on Magnifi suggests that there are a number of different ways to profit from the big data trend as a whole.
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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 October 23, 2019 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.