Long before technology behemoths like Facebook, Netflix, Google, and Apple dominated the sector and became household names, a number of investors saw certain growth potential in these budding enterprises. Those who invested US$1000 in Netflix on January 15th, 2007 had earned over US$110,000 as of April 16th, 2019 (CNBC). Peter Thiel, one of Facebook’s early investors turned his initial investment of US$500,000 into more than US$1 billion in just 8 years.
What are the key factors that these investors took note of that got them skyrocketing returns?
In this constantly evolving competitive landscape, it is important to pay attention to key insights (like market techniques, changing trends) and look out for reliable methods to help you understand and predict the future market leaders.
Identifying future leaders can be both an exciting process, and a potentially rewarding one as well. As the entire world anticipates what the “new normal” holds for us, it is crucial to remember past trends, be on the lookout for emerging consumer trends, and invest in future opportunities.
Who’s Going to LEAD?
With ongoing COVID-19 vaccine research and new drugs entering the market, the healthcare industry is undoubtedly growing at an exponential rate. The healthcare sector comprises several different industries including pharmaceuticals, medical diagnostics, health insurance companies, genomics and biotechnology.
Stryker Corp (NYSE: SYK), a leading medical technology enterprise, succeeds at solving the hurdles in the healthcare sector. Be it robotic-assisted knee surgery or complex neurotechnology that removes blood clots in the brain, Stryker is one among many companies, leading the way with innovative future ideas in the healthcare industry.
Intuitive Surgical Inc (Nasdaq: ISRG), is the maker of robotic-assisted technologies, tools and services for surgery. Last year, the company generated revenue of close to $4.5 billion and made a profit of $1.4 billion. ISRG is not only transforming the robotic surgery landscape with evolutionary products but is also driving competitors like Johnson & Johnson to expand their research in robotic surgery and as a result, driving the overall sector growth.
The global financial sector is scaling its adoption of digital technologies with specific services such as banking, investing, and insurance. In 2018 the global fintech market was valued at $127.66 billion and is forecast to grow to over $309 billion by 2022, an estimated 25% annual growth rate.
Whether it’s Intuit Inc. (Nasdaq: INTU), with their simple solution to making tax filing efficient and affordable, or Mastercard (NYSE: MA), which has profited from a growing cashless society, these companies are poised to maintain their market leadership and continue to be the future leaders in their respective markets.
Technology is an exciting sector with constantly evolving trends including, artificial intelligence (AI), self-driving automotive technologies and the growing Internet of Things (IoT). Investing in the right tech companies that show promise could be a lucrative decision.
In August, 2020, tech giant Apple (Nasdaq: AAPL) became the first US company with a market cap exceeding $2 trillion. AAPL reached the milestone just two years after becoming the world’s first trillion-dollar company in 2018.The iPhone-maker’s shares have leaped more than 50% this year, despite the coronavirus crisis forcing it to shut retail stores.
The U.S. semiconductor industry is also going through a transformation, driven both by a wave of corporate transactions and a pandemic that has supercharged demand for certain chips. In October 2020, AMD (Nasdaq: AMD), one of America’s leading manufacturers of semiconductor processors, bought its rival company Xilinx (Nasdaq: XLNX) for $35 Billion in an effort to be one of the largest companies in its sector.
There is a growing dependence on technology in our daily lives and for many investors, this is transitioning over to their investment portfolios.
4. Media and Entertainment:
A comprehensive study from PwC on the consumption of entertainment and media predicts that the market in the U.S. will reach $792.3 billion by 2022. In Canada, Internet Protocol TV (IPTV) is predicted to be the only platform to grow over the next five years to 2.9 million households in 2023. Casual games like Candy Crush and Clash of Clans continue to be the fastest-growing sector of the Canadian video games market. The free-play sector is forecast to increase to US$1.5 billion by 2023, having made up over 50% of Canada’s total video games revenue since 2015.
While globally we see a radical increase in consumption of content on OTT (Over the Top) media and gaming, there are new and trending players in the entertainment industry.
With a community of over 3.1 million subscribers, Peloton (Nasdaq: PTON) is the largest interactive fitness platform in the world. The platform merges fitness and entertainment by enabling remote fitness through internet-connected technology and the streaming of immersive, instructor-led boutique classes.
Roku (Nasdaq: ROKU) manufactures a wide range of digital media players for video streaming. The company has an advertising business and licenses its hardware and software to other firms as well. Despite a weak advertising market, where digital ad spending was down across all segments in the second quarter, Roku reported strong growth in its advertising business. The firm’s advertising business experienced a 346% increase year over year in the last quarter.
Companies like Peloton and Roku help shape the audience behavioural shift that is occurring in the entertainment industry due to the pandemic. Experts also indicate this behaviour may continue after the pandemic ends and such innovative companies may continue to benefit as a result.
Investing in future leaders with LEAD ETF
The Evolve Future Leadership Fund (TSX Ticker: LEAD) provides investors with access to current bluechip companies and the future leaders of tomorrow through four distinct categories: healthcare, finance, technology, media and entertainment. This actively managed exchange-traded fund (ETF) invests in a multitude of leading global companies where clear trends are accelerating future growth. Take the LEAD in your portfolio by investing in the future.
For more information about LEAD ETF or any of Evolve ETFs’ lineup of exchange-traded funds, please visit our website or contact us through email@example.com.