Industry

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The information and data are as of the December 4, 2019 (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.

DIA

First assembled in 1896, the Dow Jones Industrial Average is a stock market index that tracks the performance of 30 “blue chip” companies across a range of industries on U.S. exchanges. It is not weighted by market cap or arithmetic mean, though it is price weighted and does offer a broad snapshot of the performance of U.S. stocks at any given moment. The SPDR Dow Jones Industrial Average ETF Trust (DIA) is designed to follow the performance of this index.

DIA holds 30 companies across nine sectors, including Industrials (making up 20.35% of the portfolio), Information Technology (19.69%), Financials (14.91%), Consumer Discretionary (13.62%), Health Care (11.76%), Consumer Staples (8.89%), Communication Services (4.80%), Energy (4.77%) and Materials (1.20%). Its top 10 holdings are Boeing (9.58%), Home Depot (5.84%), Apple (5.64%), UnitedHealth (5.47%), McDonald’s (5.40%), Goldman Sachs (5.22%), Visa (4.33%), 3M (4.14%), Travelers (3.74%) and IBM (3.66%).

DIA’s gross expense ratio is 0.17% and it currently has about $275 billion in assets under management.

Rationale

The most direct way to gain exposure to the holdings in DIA is to buy its listed shares. But there are a number of good reasons for investors to reconsider that approach. Unlike total market ETFs, DIA is weighted to mirror the Dow Jones Industrial Average, rather than broader weighted indexes like the S&P 500. This potentially ties investment outcomes to the Dow’s weightings, limiting returns from a broader index. Rather than buying DIA shares themselves, investors interested in gaining exposure to the Dow components might consider buying funds that provide exposure to its top-weighted sectors, including Industrials, Information Technology and Financials. After all, the return drivers that will benefit DIA might also benefit other funds that are even more diversified.

Investing in DIA

A search on Magnifi suggests that investors can gain access to the Dow Jones Industrial Average 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.]

IBM (IBM)

Few companies have been as successful at reinventing themselves and their businesses over the years as IBM(IBM), which got its start as International Business Machines in the first half of the 20^th century, selling early computing machines, eventually expanding out to include mainframes, personal computers and more. It is also a major research organization, holding the record for more U.S. patents generated by a business for the last 26 years, including such innovations as the ATM machine, floppy disk, UPC barcode, magnetic stripe reader and more.

Today IBM develops computer hardware and software, offers business consulting services, cloud computing services and more. Its subsidiaries include PwC Consulting, The Weather Company and Red Hat, a maker of open-source software.

IBM currently employs more than 350,000 people across 170 countries and its revenue for 2018 was $79.5 billion.

Rationale

The most direct way to gain exposure to IBM is to buy its listed shares. But there are a number of good reasons for investors to reconsider that approach. As a multinational conglomerate in the large and competitive information technology industry, IBM must continually innovate in order to stay ahead of the ever-evolving market for computer technology and services. What’s more, IBM has gone through a number of different evolutions in recent decades – most notably a pivot to consulting services in the 2000s – in order to remain competitive. It has done well so far, but longevity in such a competitive space is never guaranteed.

However, rather than buying IBM shares themselves, investors interested in gaining exposure to the information technology sector might consider buying funds that provide exposure to IBM and its competitors. After all, the return drivers that will benefit IBM might also benefit other similar companies in information technology, computing, and business consulting. 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 IBM through these types of funds.

Investing in IBM

A search on Magnifi suggests that investors can gain access to IBM via a number of different funds and ETFs, including those shown below.

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General Electric (GE)

It’s been a long and winding road for General Electric (GE), one of the first 12 companies to be included as part of the Dow Jones Industrial Average when the list was first launched in 1896. Founded by none other than Thomas Edison, who created the Edison Lamp Company in the late 1880s to market his newest innovation, the electric lightbulb, GE as a company was formed in 1889 by Edison’s financial backers, including J.P. Morgan and the Verderbilt family, as a way to support all of the various applications for electricity that were emerging at the time. In the early days, those applications included everything from railroads, to radio, to power generation and more.

Today GE is one of the largest conglomerates in the world, with interests in aviation, healthcare, renewable energy, additive manufacturing, financial services and, of course, electric lighting.

For 2018, GE’s worldwide revenue was more than $121 billion, placing it 18^th on the Fortune 500 list of the largest U.S. companies by revenue. It employs more than 230,000 people across 130 countries.

Rationale

For more than a century, the most direct way to gain exposure to General Electric has been to buy its listed shares. But lately there have been a number of good reasons for investors to reconsider that approach. For one thing, GE was delisted from the Dow Jones Industrial Average in 2018 after its enterprise value was nearly cut in half in 2017 following years of disappointing financial results. Between 2016 and 2018, the company lost 74% of its market cap, due in large part to bad moves in its power generation business.

However, investors interested in gaining exposure to the sectors that General Electric competes, rather than buying GE shares themselves should consider buying funds that provide exposure to General Electric and other conglomerates. After all, the return drivers that will benefit GE might also benefit other similar companies in aviation, manufacturing, consumer staples and more. 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 General Electric through these types of funds.

Investing in GE

A search on Magnifi suggests that investors can gain access to GE via a number of different funds and ETFs, including those shown below.

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General Motors (GM)

Once the largest automotive manufacturer in the world, General Motors (GM) today remains the largest U.S. carmaker, producing more than 8.3 million cars and trucks annually. The company traces its roots back to the Durant-Dort Carriage Company, which was the country’s leading manufacturer of horse-drawn vehicles by 1904, when it merged with the Buick Motor Company to take on the then-new market for gas-powered vehicles. By 1962, more than half of all cars sold in the U.S. were produced by General Motors.

Today the company, headquartered in Detroit, designs, manufactures, markets, and distributes vehicles and vehicle parts, in addition to financial services. It has facilities in 37 countries and owns brands including Chevrolet, Buick, GMC and Cadillac, as well as overseas brands such as Holden, Wuling, Baojun and Jiefang.

GM’s worldwide sales volume reached 10 million vehicles in 2016 and the company reported $147 billion in revenue in 2018.

Rationale

A direct way to gain exposure to General Motors is to buy the listed shares. But that can be a risky approach, given GM’s bumpy business history and the current state of the U.S. auto industry as a whole. GM famously declared bankruptcy in 2009 following years of declining sales and was later bailed out by the government in 2014 through the Troubled Asset Relief Program.

A solution that can dampen some of that volatility is to buy funds that provide exposure to General Motors and other similar firms, rather than GM shares themselves. After all, the return drivers that will benefit GM might also benefit other similar firms in automotive, manufacturing, and financial 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 GM through these types of funds.

Investing in GM

A search on Magnifi suggests that investors can gain access to GM via a number of different funds and ETFs, including those shown below.

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Tesla (TSLA)

Few companies capture the spirit of innovation as it exists today as Tesla (TSLA), the California-based maker of electric cars, advanced battery systems, solar panels and other world-changing inventions. Founded in 2003 by engineers Martin Eberhard and Marc Tarpenning, Tesla was soon thereafter joined by current CEO Elon Musk, who invested in the company’s Series A round.

And the rest is history.

As of 2019, Tesla is producing three models of its all-electric vehicles — the Model S liftback sedan, the Model X SUV, and the Model 3 affordable sedan — and has new versions in development including the Model 3 crossover SUV, Roadster sports car and the Semi battery powered Class 8 semi-trailer truck. The company also produces solar panels and solar roof tiles via its SolarCity subsidiary, as well as whole-home rechargeable lithium ion battery systems the Powerwall and Powerpack and the Megapack, a Lithium-ion grid energy storage battery.

As of 2018, Telsa controlled 12% of the global market for plug-in electric passenger cars, with more than 245,000 vehicles delivered, making it the world’s best selling builder in its category.

Rationale

A direct way to gain exposure to Tesla is to buy the listed shares. However, this can be a volatile approach, given the company’s early stage and ongoing growing pains. A solution that can dampen some of that volatility is to buy funds that provide exposure to Tesla and other similar firms, rather than TSLA shares themselves. After all, the return drivers that will benefit Tesla might also benefit other similar firms in their industry, including those making electric vehicles as well as components and infrastructure for the industry.

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 Tesla through these types of funds.

Investing in TSLA

A search on Magnifi suggests that investors can gain access to Tesla via a number of different funds and ETFs, including those shown below.

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Military & Defense

[Today’s warfare is virtual as well. Here’s what you need to know about Cybersecurity]

How to Invest in the Future of Military Technology

It’s been said that the only guarantees in life are death and taxes, but there is another fact of life that has remained constant for much of human history: war. For millennia, people have fought with one another — over land, over titles and even over resources — and these conflicts eventually lead to the development of new weapons, military technologies and a worldwide industry dedicated to supporting these efforts.

We saw it around 400 BC, when Athens and Sparta, two of the most powerful city-states in ancient Greece, went to battle with each other in the Peloponnesian War.

We saw it again during the Roman conquest of Britain, which lasted until 400 AD.

And, of course, we saw it more recently during the American and French Revolutions in the 18th century.

In each of these instances, the outcome of these wars not only radically shifted the world’s power structure at the time, they also led to the development of new weapons and tactics. Battles that had once been fought with rocks and spears eventually moved on to bronze swords and arrows, then primitive cannons and firearms, to aircraft, today’s drones and more.

Over the last 3,000 years, the entire concept of war has evolved and today the military and defense industries are among the largest and most profitable on the planet. According to the Aerospace Industries Association (AIA), the U.S. aerospace and defense industry generated a total of $62.6 billion in federal and state tax receipts in 2015, the most recent year that data is available. That figure was up 2.9% from $60.9 billion in 2014 and $60.6 billion in 2013.

Overall, the defense industry posted more than $604 billion in sales in 2015, with end-use buyers (such as militaries, defense contractors and others) accounting for 58% or $349 billion of that total, followed by the industry’s supply chain (parts suppliers going to larger manufacturers) with the remaining 42% or $256 billion. Direct sales brought in an additional $181 billion in the U.S. alone.

By 2018, defense spending totaled $622 billion, accounting for about 3.1% of U.S. GDP.

And military technology is a strong job creator as well. Per the AIA report: “The U.S. Aerospace and Defense (A&D) industry is the world’s leading innovator and producer of technologically advanced aircraft, space and defense systems and supports one of the largest high-skill and high-wage workforces in the nation. Indeed, in 2015, the U.S. A&D industry supported nearly 1.7 million jobs in companies producing products and services for the industry’s commercial aerospace and defense manufacturing sectors. Of the jobs supported, 697,000 or 42 percent, were attributable to firms producing end-use goods and services, such as aircraft, space systems, land vehicles, ships and armaments, while 965,000, or 58 percent were attributable to the industry’s extensive supply chain. Combined, these jobs accounted for approximately two percent of the nation’s total employment base and 13 percent of the nation’s manufacturing workforce.”

What Is the Defense Industry?

At the highest level, Webster’s dictionary defines the term “military” as anything “relating to soldiers, arms, or war or relating to armed forces.” This can include both ground and air forces as well as naval forces as well as the work “performed or made by armed forces.” Simply put, military forces and the related defense industries are those dedicated to fighting wars and working toward national defense, regardless of country.

The industry that supplies the world’s militaries, as well as its defense contractors and private security forces, is broadly included in the defense industry, which manufactures and sells weapons and military technology. This includes everything from firearms, to military aircraft, vehicles, software, tactical clothing and more, as well as the servicing of military material, equipment and facilities and other logistical and operational support.

Defense and aerospace companies are involved in the development, production and marketing of “guns, artillery, ammunition, missiles, military aircraft, military vehicles, ships, electronic systems, night-vision devices, holographic weapon sights, laser rangefinders, laser sights, hand grenades, landmines and more.”

Notable companies in the military and defense sector include Boeing, EADS/Airbus, United Technologies, Raytheon, Northrop Grumman and General Atomics Aeronautical Systems. Symantec, McAfee, Trend Micro and EMC are among the industry’s key security software and technology providers.

Why Invest in Military and Defense?

To put it mildly, defense is one of the world’s largest, most stable industries. As long as there is conflict, as long as there is war, there will be demand for new weapons systems and technology.

That’s one reason why Deloitte, in its 2019 Global Aerospace and Defense Industry Outlook said: “In 2018, the global aerospace and defense (A&D) industry recuperated and experienced a solid year as passenger travel demand strengthened and global military expenditure continued to rise. The industry is expected to continue its growth trajectory in 2019, led by growing commercial aircraft production and strong defense spending.”

Among the growth catalysts cited by Deloitte are intensifying geopolitical tensions all over the world, changes to international trade agreements that have the potential to disrupt the global supply chain as well as M&A activity that’s sweeping across the industry as suppliers look to cut costs while also increasing production. All of these factors are expected to drive new demand for military equipment and defense spending in markets all over the world.

And that’s to say nothing about the new technologies that are redefining the space. Deloitte cites intelligence, surveillance, target acquisition and reconnaissance (ISTAR) technologies, as well as cybersecurity and new types of unmanned aircraft as key growth levers for military spending going forward.

How to Invest in the Military

Of course, it’s impossible for investors to participate in the military activities that are controlled by national budgets. But profits can still be found in the companies that are the direct recipients of that military spending, including weapons manufacturers, technology providers and more.

A search on Magnifi suggests that there are a number of different ways for investors to get involved in Military & Defense.

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The information and data are as of the November 13, 2019 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.

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Driverless Cars

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Uncovering New Opportunities in Autonomous Vehicle Technology

It still might sound like science fiction, but driverless cars are already on the road around the world. While the leader of the pack, Google’s Waymo, has logged over 10 million autonomous miles, it’s not the only car driving itself around as of 2019. Russia’s Yandex just announced that its self-driving cars have driven 1 million miles. And Tesla’s autopilot miles top 1.2 billion.

That’s a lot of ground covered.

And, it’s not just single-driver cars. Beep, an autonomous mobility solutions service, piloted a public self-driving shuttle earlier this year in Florida. And Beep, while unique because it’s public, isn’t alone. Waymo officially joined California’s Autonomous Vehicle Passenger Service pilot program this past summer, allowing it to offer Waymo employees and their guests shuttle rides. Waymo is one of four companies in California, including AutoX, Pony.ai, and Zoox, that operates driverless vehicles. In addition to California, Pony.ai also operates out of a headquarters in Shanghai.

In other words, driverless car technology is in use from coast to coast and around the world.

What Is a Driverless Car?

Although most of us are likely still driving our cars to work rather than reading a book or catching up on emails, it won’t be long until that’s no longer the case. For instance, if you’ve recently purchased a car, you likely opted for the latest safety features— the automatic braking, the blind spot detection, parking assistance, and so on. And, if you did so, you aren’t alone. The increasing consumer adoption of advanced driver-assistance systems (ADAS) is paving the road toward more full-featured autonomous technology.

Consumer buy-in of ADAS technologies also incentivizes car companies to invest their further development. Hyundai, for example, recently announced plans to invest $35 billion in self-driving and electric vehicles. No company wants to be left behind in the race for fully autonomous vehicles, especially given the present consumer demand for ADAS features.

Beyond increased buy-in, the technology is also becoming less expensive for manufacturers, with the cost of light detection and ranging sensors dropping by a factor of ten over the last five years.

Why Invest in Driverless Cars?

All that said, the applications of driverless technologies are nearly endless, and they will be increasingly in-demand as traffic continues to plague growing metro areas and logistics costs rise.

One possibility for how the technology might show up in our day-to-day lives is the concept of robo-taxis. People have already adopted ride-sharing, priming consumers for easy adoption into this new driverless transport option. Uber is already working on this, securing $1 billion in funding earlier this year to work on its own self-driving cars.

A second possibility is platooning— using one vehicle that transports goods as the leader of one or more trucks doing the same. The lead truck, potentially with a driver, will provide the driverless trucks following it with predictability.

Even more, if driverless cars are mixed with infrastructure adaptations, it could lead to radically effective traffic solutions. According to a recent study published in Science Daily, driverless vehicles have the potential to improve overall traffic flow by at least 35%. One possibility is for congested cities to create a driverless car lane— like an HOV lane—that allows speeds higher than previously thought possible. Driverless technology can also be used to streamline public transportation.

How close is all of this today? Closer than many might think.

Researchers are continuing to help driverless cars improve their decision-making in edge cases, or situations that are not black and white. This might mean recognizing a pedestrian that’s carrying something large across the road or adjusting course when a pedestrian forgets something and quickly changes direction in the road.

But still, even though driverless vehicle technology faces challenges, the research dollars are hard at work and the technology is imminent. When it comes to society going driverless, it’s a matter of when, not if.

How to Invest in Driverless Car Technology

So what’s the best way for investors to get involved as autonomous technology starts to hit the mainstream? A search on Magnifi suggests that there are a number of different ways to profit from the driverless trend as a whole.

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The information and data are as of the October 25, 2019 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.

Big Data

[Climate change is one of the primary challenges of our time. Here’s how investors are supporting the technology that’s making a difference.]

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. <a href="https://magnifi.com/">Try it for yourself today</a>.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.]

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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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.