{"id":3236,"date":"2023-11-29T23:46:23","date_gmt":"2023-11-29T23:46:23","guid":{"rendered":"http:\/\/blog.valuengine.com\/?p=3236"},"modified":"2023-11-30T01:14:48","modified_gmt":"2023-11-30T01:14:48","slug":"using-emerging-internet-and-technology-etfs-to-identify-stock-buying-opportunities","status":"publish","type":"post","link":"http:\/\/blog.valuengine.com\/index.php\/using-emerging-internet-and-technology-etfs-to-identify-stock-buying-opportunities\/","title":{"rendered":"Using Emerging Internet and Technology ETFs to Identify Stock-Buying Opportunities"},"content":{"rendered":"

The \u201cMagnificent Seven\u201d has now replaced \u201cFAMANGs\u201d as the nickname for current market leadership.\u00a0 It is also a somewhat deridingly used term for the \u201coverpriced\u201d stocks hated by value managers.\u00a0 Holdovers include Apple, Amazon, Microsoft and Google.\u00a0 Gone is Netflix.\u00a0 New are Nvidia and Tesla while Facebook had a facelift to be renamed Meta. As tech has long been associated with leading growth, the nature of what constitutes tech will remain important in the future. The tech that will be commoditized and replaced is yet to be determined.\u00a0 Ask former owners of Digital Equipment Corporation, Cisco Systems and Hewlett Packard how quickly a tech company\u2019s leadership can fall from grace as new technologies take over.\u00a0 From a growth manager\u2019s perspective, the goal is to own the future Magnificent Seven, not the current one.<\/span><\/p>\n

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To delve into potential candidates for future magnificent seven type lists, this article examines three popular emerging technology ETFs, each targeting different investible universes.\u00a0\u00a0<\/span><\/p>\n

The ETFs, listed by ticker symbol, include:<\/span><\/p>\n

ARKW <\/b>– ARK Next Generation Internet ETF.<\/span>\u00a0 ARKW<\/b> is an actively-managed exchange-traded fund (“ETF”) that will invest under normal circumstances primarily (at least 80% of its assets) in domestic and foreign equity securities of companies that are relevant to the fund’s investment theme of next generation internet. The fund\u2019s managers are tasked with identifying companies they see as the next generation of Internet evolution. Investors need to be aware that many of the companies developing these advancements are huge corporations for which nascent technologies are only a small fraction of total revenues. Ark ETFs hold high-conviction portfolios. As such, most ARK ETFs have fewer than 40 individual securities.<\/span><\/p>\n

PSCT<\/b> \u2013 Invesco Small-Cap Information Technology ETF. <\/span>PSCT<\/b> tracks a market-cap-weighted index of US small-cap emerging technology companies, especially internet services, infrastructure, electronics, semiconductors, software, and communication technologies.\u00a0 The S&P 600 Small Cap Index, not the FTSE-Russell 2000, is used as the investable universe for selection.\u00a0\u00a0\u00a0<\/span><\/p>\n

EMQQ \u2013 <\/b>ETC Emerging Markets Internet and Technology ETF. <\/span>EMQQ<\/b> tracks a cap-weighted index of companies producing most of their revenue from internet or e commerce activity in emerging markets. The index includes common stocks trading on non-US exchanges, ADRs and GDRs.\u00a0 The index-based fund targets firms engaged in internet service, retail, broadcasting and media, and online advertising, gaming, travel, search engines and social networks. Firms must derive most of their revenue or assets in these industries in emerging markets to make the cut.<\/span><\/p>\n

The benchmark ETFs chosen for this portion of the review are:<\/span><\/p>\n

XLK<\/b> – Select Sector SPDR Technology Index ETF – <\/span>XLK<\/b> tracks an index of S&P 500 technology stocks.\u00a0 As such it is narrower than the Nasdaq-100.<\/span><\/p>\n

QQQ <\/b>\u2013 Invesco QQQ Trust ETF – <\/span>QQQ <\/b>is an exchange-traded fund based on the Nasdaq-100 Index\u00ae.<\/span><\/p>\n

 <\/p>\n231129 blog chart graphic<\/a>\n

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Observations:<\/b><\/p>\n

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