Featured Archives - Evolve ETFs

‘Big Six’ Canadian Banks Q3 2026 Earnings Roundup

Posted on August 27, 2026August 27, 2026 by Janice Leung

Canada’s Big Six banks all topped analyst expectations in the third quarter. The strength was broad-based, with most of the banks pointing to solid results across their core businesses. Capital markets was a common bright spot, helping drive the beats at Royal Bank of Canada, Bank of Nova Scotia and National Bank. The results came amid ongoing trade uncertainty and geopolitical tension.

Royal Bank of Canada

RBC beat expectations on the strength of its capital markets, commercial banking and wealth management businesses. Profit rose 11% to $6 billion, or $4.23 per share. Stripping out items such as HSBC Canada transaction and integration costs, adjusted earnings came to $4.28 per share, ahead of what analysts had looked for.

Toronto-Dominion Bank

TD had a strong quarter, with results across the business coming in better than expected as the bank keeps a lid on costs and works to fix the gaps in the anti-money-laundering processes in its U.S. arm. Profit climbed 38% to $4.62 billion, and adjusted earnings topped what analysts had forecast. The bank also plans to open 100 new branches in the United States by the end of 2028, pending regulatory approval.

Bank of Montreal

BMO beat analyst estimates on stronger-than-expected performance across its businesses, even though profit came in below where it stood a year earlier. Net income fell 25% from the same quarter last year to $1.75 billion, weighed down by a charge tied to the announced sale of its transportation and vendor finance business. Excluding those items, adjusted profit rose 19% and, at $3.96 per share, came in ahead of the $3.75 analysts had expected. The bank has been streamlining its operations and reshaping its balance sheet to improve profitability, particularly in its U.S. unit. It also announced plans to buy back 25 million of its common shares.

Bank of Nova Scotia

Scotiabank came in ahead of expectations, helped by capital markets and stronger performance across the rest of the business. Profit rose 17% to $2.95 billion, with adjusted earnings landing above what analysts had forecast. The bank is working to expand its domestic business by attracting lower-cost deposits and deepening its relationships with existing clients, though competition for deposits has intensified as lenders vie for customer cash. In the first quarter, Scotiabank said it expected to hit its 14% return on equity target in 2027, a year earlier than previously expected. In the third quarter, Scotiabank posted an adjusted return on equity of 14.2%.

Canadian Imperial Bank of Commerce

CIBC kept the sector’s streak of third-quarter beats going, winning more business from domestic clients while keeping loan losses in check. Profit rose 15% from a year earlier to $2.41 billion, and adjusted earnings came in ahead of forecasts.

National Bank of Canada

National Bank closed out the group with higher profit and a beat, carried by stronger results in personal banking, capital markets and wealth management. Profit rose 23% to $1.31 billion. Excluding items such as costs tied to the acquisition of Canadian Western Bank and transactions with Laurentian Bank of Canada, adjusted earnings came to $3.39 per share, again ahead of expectations.

Source:

https://www.theglobeandmail.com/business/article-canada-banks-earnings-third-quarter-results-2026/ (August 27, 2026)

DISCLAIMER

Published August 27, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. The Evolve Big Six Canadian Banks UltraYield Index ETF (“SIXY”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

Leverage increases risk.

The information contained herein is a general description and is not intended to be specific investment advice to any particular investor nor intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information contained herein is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, it is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found on the Evolve Funds Group Inc website at https://evolveetfs.com/

Certain statements contained herein are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

Certain information contained in this document is obtained from third parties. Evolve Funds Group Inc. believes such information to be accurate and reliable as of the date hereof, however, we cannot guarantee that it is accurate or complete or current at all times. The information provided is subject to change without notice.

Rising Threats, Rising Budgets: The Case for Cybersecurity

Posted on August 25, 2026 by evan kwan

Cybersecurity has never lacked for headlines, but this summer delivered two stories that stand apart. In July, an AI system carried out a cyberattack from start to finish, with no human directing it. Weeks later, hackers set their sights on some of the biggest money managers on Wall Street. For months, security leaders had warned, as CNBC reported, that artificial intelligence would reshape the threat landscape.¹ Now that it has, what does it mean for investors?

A Cyberattack With No Hacker Behind It

In mid-July, CNBC reported that OpenAI revealed its own models were behind an unprecedented cyber incident at Hugging Face, a popular open-source platform for AI developers. The models escaped a sandboxed testing environment and exploited a vulnerability to break into Hugging Face’s systems.²

According to Hugging Face, as reported by CNBC, the incident was unique because it was driven, end to end, by an autonomous AI agent system.² In the aftermath, CNBC reported, OpenAI turned to the cybersecurity industry, working with third-party advisors like CrowdStrike to validate what actions the models took.³

Hedge Funds in the Line of Fire

The second story hit closer to home for investors. In early August, hackers set out to breach some of the biggest names on Wall Street. Bloomberg reported that hedge fund giants Two Sigma Investments and Citadel were among the targets, along with several private equity firms.⁴

These attempts were not a one-off. Attacks on major financial institutions are routine, and Bloomberg reported that global companies are battling a surge in AI-powered cyberattacks.⁴

The Cost of Staying Protected

For businesses, the message is clear: the cost of being unprotected is rising, and that message is showing up in budgets. According to Gartner, global spending on information security is projected to reach $248.9 billion in 2026, with rising threats and the expanding use of AI among the main drivers.⁵ As those budgets grow, so does the demand for the companies supplying the protection.

Why Cybersecurity Belongs in a Portfolio

For investors, the takeaway extends beyond any single headline. Cybersecurity is an essential service in the modern economy, and demand for it does not depend on the market’s mood. What this summer showed is that the threats driving that demand are expanding,² reaching more sophisticated targets,⁴ and pushing security budgets higher.⁵ The result is a sector that pairs the stability of an essential service with a growth story tied directly to the rise of AI.

Diversified Exposure with CYBR

The Evolve Cyber Security Index Fund (CYBR) is an index-based, market-cap-weighted fund that provides diversified exposure to the global leaders in cybersecurity. With holdings spanning endpoint, cloud, network, and identity security, CYBR provides an easy way to invest in the cybersecurity story without betting on any single company.

Learn more about CYBR at https://evolveetfs.com/product/cybr/

Sources

https://www.cnbc.com/2026/08/01/open-ai-hugging-face-hack-cyber-warnings.html (Aug 1, 2026)
https://www.cnbc.com/2026/07/22/open-ai-cyber-models-hack-hugging-face.html (Jul 22, 2026)
https://www.cnbc.com/2026/07/30/open-ai-hugging-face-hack-latest.html (Jul 30, 2026)
https://www.bloomberg.com/news/articles/2026-08-05/major-hedge-funds-targeted-in-wave-of-attempted-cyberattacks (Aug 5, 2026)
https://axis-intelligence.com/cybersecurity-spending-statistics/ (Jul 9, 2026) [axis-intelligence.com citing Gartner Forecast: Information Security, Worldwide, 2Q26 (June 25, 2026)]

DISCLAIMERS

Published August 25, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Cyber Security Index Fund (“CYBR”) is offered by Evolve Funds Group Inc. and distributed through authorized dealers.

The information contained herein is for informational purposes only and is not intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information contained herein is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, it is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found on the Evolve Funds Group Inc website at https://evolveetfs.com/

Certain information contained herein is obtained from third parties. Evolve Funds Group Inc. believes such information to be accurate and reliable as of the date hereof, however, we cannot guarantee that it is accurate or complete or current at all times. The information provided is subject to change without notice.

From Data Centres to Defence Budgets: What’s Driving Global Materials in 2026

Posted on August 24, 2026August 24, 2026 by evan kwan

Materials and mining companies form the backbone of the global economy. They supply the copper in our power grids, the steel in our buildings, and the gold and specialty metals used in everything from electronics to jet engines. When the world builds, the sector benefits.

The sector is also unusually diverse. Copper responds to construction and technology cycles, gold to macroeconomic risk, steel to trade policy, and defence metals to geopolitics. That diversity matters in 2026, because all four of those forces are active at once, and each is telling a different story.

How The AI Boom Affects Copper

According to Kpler, copper held near record levels in mid-July, and much of that strength traces back to artificial intelligence.¹

The world’s largest cloud and platform companies are on course to spend roughly US$725-$750 billion of capital this year, most of it on data centres.¹ These facilities are copper-intensive. This year’s construction alone is using roughly as much copper as the entire annual increase in global demand.¹

Supply cannot respond quickly. Production in Chile, home to the world’s largest copper mine, has fallen for ten straight months, and a new mine can take fifteen to twenty years to reach production.¹ That imbalance explains partly why copper has stayed near record levels.

Gold is Down, But Central Banks Are Still Buying?

Gold has had a dramatic year. According to the World Gold Council, the metal climbed above US$5,500 an ounce intraday in January before sliding below US$4,000 in late June.² That is a significant swing, yet even after the pullback, gold remains one of the best-performing assets of the past twelve months.²

The most consistent buyers have also stayed in the market. Central banks have purchased an average of 1,000 tonnes of gold a year since 2022 and are expected to continue to buy over the next year.² The price came down, but the underlying demand for gold remains in place.

What Are Tariffs Doing to Steel Prices?

According to the Cato Institute, US steel prices reached a three-year high in late June and are up roughly 70% since tariffs on all steel imports were announced on February 10, 2025.³ American mills have lifted production, imports have fallen sharply, and domestic producers now face far less foreign competition in their own market.³ As long as the tariffs remain in place, conditions continue to favour U.S. steelmakers.

How Defence Spending is a Materials Theme

Europe’s defence build-up has largely been covered as a story about tanks, jets, and soaring defence stocks. What receives less attention is the raw material behind all of it.

According to Goldman Sachs, Europe’s rearmament is expected to lift the region’s demand for industrial metals by about 6% by 2027, with copper in particular running through nearly every military system.⁴ Defence budgets take years to spend, which makes this one of the more durable sources of demand in the sector today.

Why BASE? Diversified Exposure Across The Sector’s Driving Themes

What makes these four themes compelling together is how little they depend on one another. Copper is moving on the AI build-out, gold on macroeconomic risk, steel on tariff policy, and defence metals on geopolitics. When one part of the sector slows, the others do not necessarily follow.

The Evolve Global Materials and Mining Enhanced Yield Index ETF (BASE) is an index-based ETF that invests in global materials and mining companies through an ex-Canada portfolio, providing diversification beyond domestic names. The value of that structure is balance. The impact of any one company’s setback is diluted across the broader portfolio, which is designed to capture the sector’s direction rather than a single headline. The fund pairs an active covered call strategy on up to 33% of the portfolio designed to generate tax-efficient monthly income.

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter.

Sources:

https://www.kpler.com/blog/copper-the-perfect-squeeze. July 17, 2026.
https://www.gold.org/goldhub/research/gold-mid-year-outlook-2026. July 1, 2026.
https://www.cato.org/blog/steel-prices-rise-again-amid-persistent-us-tariffs. July 9, 2026.
https://www.euronews.com/business/2026/05/29/five-industries-benefiting-from-europes-defence-spending-boom. May 29, 2026.

DISCLAIMERS

Published August 24, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Global Materials & Mining Enhanced Yield Index ETF (“BASE”) is offered by Evolve Funds Group Inc. and distributed through authorized dealers.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated.

From Price Shock to Pipeline: Why Canadian Energy Is Back in The Spotlight

Posted on August 24, 2026August 25, 2026 by evan kwan

Energy investors have had no shortage of headlines this year. A war in the Middle East. The world’s most important oil chokepoint effectively shut. Gas prices making the news. And through all of it, a question that keeps coming back: where does reliable energy come from?

Increasingly, the answer may be Canada.

What Happened to Oil Prices This Year?

When war broke out in Iran in late February, oil markets felt it immediately. According to CNBC, Brent crude jumped 51% in March, one of the largest one-month price surges on record, as fears mounted over supply disruptions through the Strait of Hormuz.¹

Why does one waterway matter so much? Before the conflict, roughly a fifth of the world’s oil moved through the strait, according to CNBC.² It has remained functionally closed for months, cutting off millions of barrels and keeping markets on edge.¹

Since then, oil has traded on the news cycle. Signs of progress towards a deal pull prices lower, while renewed tensions in the strait push them back up. That tug-of-war has defined the year for oil.

Why Is Asia Buying Canadian?

Canadian crude loads on the Pacific coast and sails straight to Asia. It never goes anywhere near the Strait of Hormuz and buyers have started to take notice.

Reuters reported that in late July, Japan’s largest refiner purchased a cargo of Canadian crude for the first time in over a year.³ Reuters noted that India, Malaysia, and Singapore have also returned to buying Canadian oil since the war began, and the share of Vancouver’s exports heading to Asia has steadily climbed.³

It’s not just oil. Reuters reported that when the conflict forced Qatar, one of the world’s largest LNG suppliers, to halt production, Canada’s new LNG terminal in B.C. pushed toward full capacity to ship as much gas to Asia as it could.⁴

What Is Canada Building Next?

The momentum goes beyond existing pipelines. CBC reported that in early July, Alberta formally proposed a new oil pipeline to the southwest coast of British Columbia, designed for tanker export to Asian markets.⁵ The project is estimated to cost between $35.2 billion and $43.7 billion.⁵

For years, a new pipeline to the coast was just talk. Now there’s a real proposal on the table.

Where Do Things Stand Now?

The market hasn’t settled. CNBC reported that a pause in fighting in late July raised hopes for de-escalation, and oil prices eased.⁶ Days later, prices began climbing again on renewed conflict in the strait.⁷ For now, oil continues to trade on every headline.

No one knows when the strait will fully reopen, but buyers aren’t waiting around to find out. The shift toward Canadian energy is already underway.

Why OILY? One Ticker for Canadian Energy

Rising demand from Asia, new pipelines on the table, and a world paying up for reliable supply. Together, they make a strong case for Canadian energy right now. For investors who want that exposure without betting on any single company, the Evolve Canadian Energy Enhanced Yield Index Fund (OILY) offers a simple solution. OILY holds Canada’s ten largest publicly traded energy companies, from the producers pulling oil out of the ground to the pipelines carrying it to the coast. On top of those holdings, the fund applies an active covered call strategy designed to generate tax-efficient monthly income, along with modest leverage for enhanced exposure to the Canadian energy story.

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter.

Sources

https://www.cnbc.com/2026/04/21/oil-price-iran-war-middle-east.html. April 21. 2026
https://www.cnbc.com/2026/07/14/oil-prices-today-brent-wti-hormuz-trump-toll-iran.html. July 14, 2026.
https://www.reuters.com/business/energy/canadian-oil-heads-japan-first-time-over-year-iran-war-tightens-middle-east-2026-07-29/. July 29, 2026.
https://www.reuters.com/business/energy/lng-canada-ramps-up-output-iran-war-threatens-global-gas-supplies-2026-03-10/. March 10, 2026.
https://www.cbc.ca/news/canada/livestory/energy-proposal-ab-bc-west-coast-july-2-live-updates-9.7251535. July 2, 2026.
https://www.cnbc.com/2026/07/28/oil-price-today-wti-brent-us-iran-hormuz.html. July 28, 2026.
https://www.cnbc.com/2026/07/31/oil-prices-today-brent-wti-hormuz-trump-iran-.html. July 31, 2026.

DISCLAIMERS

Published August 24, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Canadian Energy Enhanced Yield Index Fund (OILY) is offered by Evolve Funds Group Inc. and distributed through authorized dealers.

The information contained herein is a general description and is not intended to be specific investment advice to any particular investor nor intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, and is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found at https://evolveetfs.com/

Leverage increases risk.

How One Dividend Cut Put the Canadian Utilities Story on Display

Posted on August 19, 2026August 19, 2026 by evan kwan

Utilities generate the power, move the natural gas, and carry the connections Canadians rely on every day. That essential-service revenue is why income investors have leaned on the sector for decades.

This year, Canadian utilities have given investors plenty to think about. One high-profile dividend cut grabbed the headlines. But it also put the whole sector on display, and what investors found underneath looks as strong as it has in years.

The TELUS Reset

In late-July, TELUS reset its quarterly dividend, cutting the payout by 55%. The move is expected to generate approximately $2.7 billion in cumulative savings through 2028, with cash being directed toward paying down debt.¹

A dividend cut is never welcome news. But look at what TELUS is doing with the money: paying down debt today to put the business on firmer footing tomorrow. The company itself framed the reset as a way to support deleveraging and fuel long-term growth.¹ That’s a deliberate trade-off, a smaller payout now in exchange for a stronger foundation later.

Elsewhere in The Sector, The Story is Growth

Fortis has increased its dividend for 52 consecutive years, a streak few companies in any sector can match, and expects that record to extend through the end of the decade.²

Pipelines are just as busy. Enbridge added another billion dollars to its secured project backlog this summer, bringing the total to approximately $41 billion.³ Enbridge calls it the best environment for growth in ten years.³

And this buildout is far from finished. To keep up with demand, annual worldwide grid investment will need to rise by roughly 50% by 2030.⁴

The Demand Story Is Just Getting Started

Why all the spending? The world needs more electricity. Data centres are pushing demand higher, and that climb is expected to continue through the end of the decade.⁴

The same story has been unfolding at home. Alberta’s grid operator now has more data centre proposals than it can connect in the short term.⁵ That gap between demand and supply will take years to close, and Canada’s power producers and pipelines sit on the right side of it.

Single Ticker Exposure to The Canadian Utilities Story: UTES

Canadian utilities offer what few sectors can right now: essential services, steady revenues, growing dividends, and a demand tailwind that is only building. The Evolve Canadian Utilities Enhanced Yield Index Fund (UTES) is an index-based ETF that invests in Canada’s major utility, pipeline, and telecommunications companies, the businesses that keep the country’s power, energy, and connections running. The value of that structure is balance. The impact of any one company’s setback is diluted across the broader portfolio, which is designed to capture the sector’s direction rather than a single headline. The fund pairs an active covered call strategy on up to 33% of the portfolio with modest leverage that seeks to amplify income and pays distributions monthly.

For investors seeking single-ticker access to the sector’s steady dividends and its growing role in powering that demand, UTES offers a straightforward way to participate.

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter.

Sources

DISCLAIMERS

Published August 19, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Canadian Utilities Enhanced Yield Index Fund (UTES) are offered by Evolve Funds Group Inc. and distributed through authorized dealers.

The information contained herein is a general description and is not intended to be specific investment advice to any particular investor nor intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, and is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found at https://evolveetfs.com/

Leverage increases risk.

FANGMA Q2 2026 Earnings Roundup: Cloud reaccelerates as memory costs push capex higher

Posted on August 12, 2026August 12, 2026 by evan kwan

Big Tech grew revenue across the board in the second quarter, but the reporting cycle belonged to capital spending. Rising memory prices account for much of the capex increase. Cloud growth reaccelerated across AWS,¹ Azure,² and Google Cloud,³ and a leadership transition arrived at Apple.⁴ Here is what each name brought to the table this quarter.

Microsoft (MSFT)

Microsoft closed its fiscal year with revenue up 18% and Azure growth accelerating to 43%, ahead of what analysts had expected. Full-year Azure revenue passed $100 billion for the first time. Capital expenditure and finance leases rose 69%, and free cash flow fell 23%. According to CNBC, Microsoft told analysts to expect capital spending to rise again in fiscal 2027, pointing to demand signals across its portfolio. Investors were satisfied with Microsoft’s performance, sending shares up 8% after hours.² Microsoft closed the following session 15.51% higher.⁵

Amazon (AMZN)

Amazon’s cloud business grew at its fastest pace since 2021. AWS revenue rose 37%, and the backlog of contracted work reached $496 billion. Amazon said its artificial intelligence and in-house chip businesses had each passed a $25 billion annual run rate. It also raised the 2026 capital spending forecast to $220 billion, attributing the increase to memory prices, and cautioned that even that figure would not cover existing demand. With surging cloud growth overcoming growing capital spending, Amazon shares rose more than 10% after hours.¹ In the following session, Amazon closed 15.32% higher.⁵

Meta (META)

Meta grew revenue faster than analysts expected, but the print was overshadowed by an earnings miss of more than a dollar a share. According to CNBC, the shortfall came from costs, which climbed 55% on legal charges and severance from the layoffs Meta began in May. Free cash flow fell to $784 million from $8.55 billion a year earlier. Meta also narrowed its full-year capital expenditure guidance. Attention turned to how the company intends to monetize its AI work. Earlier in the month, Meta had released Muse Spark 1.1, which the company described as its strongest model yet for agentic and coding tasks. Investors were unimpressed with a weaker-than-expected revenue forecast and earnings miss, sending shares lower in extended trading.⁶

Apple (AAPL)

Apple beat on both revenue and earnings, with iPhone sales up 22% and Mac well ahead of forecasts. Guidance for the quarter came in soft, held back by supply constraints, and services revenue fell short of expectations. Apple has paid more for memory in each of the past three quarters and expects to continue to pay more. The quarter also brought a leadership change. According to CNBC, the call was Tim Cook’s last before John Ternus takes over as CEO. Investors focused on the guidance rather than the beat, sending shares down more than 6% in extended trading.⁴

Netflix (NFLX)

Netflix’s quarter landed roughly in line with expectations, but its guidance fell short. Revenue rose 13%, and Netflix guided the third quarter a notch lower, to 12%, while trimming the top of its full-year outlook. Engagement dominated the call. Netflix described its own as healthy and cautioned that viewing hours and profit do not move in step. According to CNBC, Netflix will also publish its engagement reports less often. Investors focused on the forecast, sending shares lower after the close.⁷

Alphabet (GOOGL)

Alphabet grew revenue 24%, comfortably ahead of estimates, carried by an 82% surge at Google Cloud. However, the capital expenditure outlook overshadowed it. According to CNBC, Alphabet now expects to spend as much as $205 billion in 2026, well beyond the ceiling it had previously set. Alphabet’s CFO noted the company cannot bring computing capacity online fast enough to meet demand and that, throughout the third quarter, it will purchase third-party capacity. Shares sank in extended trading.³

FANGMA Exposure with TECH

Cloud growth reaccelerated across Big Tech this quarter, and the group is investing heavily to meet that demand. The Evolve FANGMA Index ETF (TECH) is an index-based, equal-weight solution holding each of the six names in this roundup: Alphabet, Amazon, Apple, Meta, Microsoft, and Netflix. For investors seeking single-ticker access to all six, TECH offers a straightforward way to participate.

For more information on TECH, visit the fund page at https://evolveetfs.com/product/tech/.

Sources

Amazon posts ‘booming’ cloud growth, hikes 2026 capex to $220 billion. July 30, 2026
Microsoft beats Q4 cloud expectations as full-year Azure revenue tops $100 billion. July 29, 2026
Alphabet earnings takeaways: Q2 revenue beats, GOOGL stock sinks on 2026 capex hike. July 22, 2026
Apple earnings: Revenue tops estimates, but supply constraints weigh on guidance. July 30, 2026
Bloomberg, as at July 31, 2026
Meta’s stock drops on disappointing guidance, dwindling free cash flow. July 29, 2026
Netflix stock falls as earnings forecast disappoints, company says it will give fewer engagement updates. July 16, 2026

Disclaimers:

Published August, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve FANGMA Index ETF (“TECH”) is offered by Evolve Funds Group Inc. and distributed through authorized dealers.

Large European Banks Remain Resilient Despite Economic Headwinds

Posted on July 16, 2026February 15, 2023 by Veronica Carlasuc

Banking stocks are generally considered some of the safest equities to hold, providing investors with great long-term capital appreciation, solid dividend growth, and robust share repurchase programs. That doesn’t mean there aren’t risks associated with banking stocks.

Banks rely on businesses and consumers to spend and borrow money. During recessions, discretionary spending tends to fall, with fewer people buying large ticket items like cars and houses or using their lines of credit. Moreover, if consumers cannot repay their debts, they are at risk of defaulting on their loans, which banks have to absorb.

One of the biggest ways that banks make money is by taking in deposits, lending the money, and making a profit from the difference in interest rates. As a result, banks make less money during low-interest rate environments and more when interest rates are on the rise.

How Are European Banks Doing?

In an effort to tame runaway inflation, central banks around the world have been raising their key lending rates. The Eurozone interest rate is at 2.5% and is expected to rise to 3.25% in 2023. The Bank of England’s base rate is 3.50% and the Swiss National Bank recently lifted its interest rates to one percent.

Despite economic headwinds and fears of a recession, European banks are doing very well, reporting strong profits, improved balance sheets, and strong liquidity. But investors remain nervous and concerned that rising defaults and a recession will cut into earnings and weigh down dividend payments and buybacks.

Their concerns may be misguided. U.S. banking giant Morgan Stanley predicts that European banks’ pre-provision profits will increase 16% in 2022 and a further eight percent in 2023. European banks are also expected to return at least €100 billion (CAD$1.45 billion) through dividends and stock buybacks.

Rising interest rates are helping fuel earnings growth through significant increases in net interest income, with the amount charged for loans rising faster than the rate paid out on deposits.

How Will European Banks Navigate Rising Interest Rates?

Generally, banking stocks do not do well during recessions. But the rising interest rate environment has positioned European banks for a strong 2023. Moreover, fewer analysts are calling for a European recession this year.

The fact is, some of Europe’s largest banks are posting stronger-than-expected profits, juiced in large part by higher interest rates. Interest rates were kept at near-record lows since the financial crisis, more than a decade ago. Now, with rates rising at their fastest pace in decades, banks are cashing in.

In Germany, Deutsche Bank AG reported third-quarter earnings that came in above estimates. Italy’s UniCredit SpA increased its 2022 earning guidance after third-quarter profits rose above forecasts. Meanwhile, Britain’s Barclays PLC and Standard Chartered PLC, and Spain’s Banco Santander SA also posted better than expected results.

These results are in contrast to the mixed results coming from big U.S. banks, where profits were down, largely as a result of a sharp decline in deal-making. European banks are less reliant on deals for revenue and profits than U.S. banks and have been benefitting from the rising interest rate environment.

As a result, European banks are more than resilient enough to handle the effects of rising interest rates. What they will need to prepare for, though, is the normalization of inflation and the return of lower interest rates. But again, European banks have thrived in an ultra-low interest rate environment since 2008.

How Will European Banks Perform in 2023?

On the surface, it may not seem like a great time to invest in European banks. Gross domestic product (GDP) growth has slowed across much of Europe with a potential recession increasing credit risks and the demand for energy creating additional headwinds.

Many believe a recession is all but inevitable in 2023.

Historically, recessions come after periods of monetary tightening approximately 80% of the time. A recession is loosely described as two consecutive quarters of negative growth. So technically, we could be at the start of a recession and not know it.

It’s a different story though for Europe, the world’s largest economic region, with economists at Goldman Sachs saying it doesn’t look like it is going to tip into a recession. Economists expect the Eurozone to contract in the fourth quarter of 2022 but expect it to rebound slightly in the first quarter of 2023. For the full year, Goldman expects the Eurozone economy to climb 0.6%, a big increase from the previous call of a 0.01% dip.

There are three primary reasons why Europe is expected to avoid a recession in 2023: the industrial sector has been resilient, natural gas prices are down, and the Chinese economy is reopening earlier than expected.

Some European economies will fare better than others in 2023. Germany and Italy are expected to flirt with a recession owing to their reliance on Russian gas imports. France and Spain, though, have more diversified energy sources and are also more service-sector intensive.

Worst-case scenario and Europe does enter into a recession in 2023, it is expected to be mild.

So far, the European banking sector has been more than resilient to the challenges it is facing. It has had more than 10 years of near-zero interest rates and other headwinds to help strengthen its balance sheet. The tide has turned, with interest rates on the rise, and European banks are thriving.

Looking to Invest in European Banks?

Those looking to invest in the largest European banks can do so through a number of different strategies. One way would be to purchase shares in each company. But that would be exceptionally costly.

Another option for investors to gain exposure to the biggest European banks is through an exchange-traded fund (ETF).

Investing in European Banks with EBNK ETF

The Evolve European Banks Enhanced Yield ETF (EBNK ETF) is an index-based ETF that invests in equity securities of the largest European banks on an equally-weighted basis, with the added value of a covered call strategy applied on up to 33% of the portfolio. Covered call options have the potential to provide extra income and help hedge long stock positions.

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Banks and Utilities: The Twin Pillars of Canadian Dividend Income

Posted on July 14, 2026July 14, 2026 by evan kwan

Income-focused Canadian investors have long leaned on two pillars: banks and utilities. Between them they anchor the country’s dividend culture, the banks for their century, plus payout records and oligopoly economics, the utilities for the steady, regulated cash flows behind the power, heat and connectivity Canadians use every day. Financials alone account for roughly 30% of the S&P/TSX Composite¹, the single largest sector in the benchmark, while regulated utilities sit at the defensive core of most income portfolios. Here is why these two sectors remain foundational for Canadian income – and how investors can add an income-enhancing overlay to both.

Canadian Banks and Lifecos: An Income Franchise Built to Last

Few sectors are as structurally advantaged as Canadian banking. The Big Six, Royal Bank, TD, Scotiabank, BMO, CIBC and National Bank, operate in a concentrated, heavily regulated market with high barriers to entry, giving them durable competitive moats across lending, wealth management and capital markets. Alongside them sit the country’s major life insurers, adding a complementary stream of insurance and wealth earnings.

That stability shows up in one of the most remarkable dividend records anywhere. Bank of Montreal has paid a dividend every year since 1829² – the longest unbroken streak of any Canadian company – and five of Canada’s largest companies, its major banks among them, have paid dividends for more than a century³, through wars, recessions and financial crises.

The sector’s resilience is underwritten by strict oversight from the Office of the Superintendent of Financial Institutions (OSFI). A key gauge of a bank’s financial strength is its Common Equity Tier 1 (CET1) ratio, which measures a bank’s highest-quality capital – chiefly common shares and retained earnings – against its risk-weighted assets; the higher the ratio, the more losses a bank can absorb before running into trouble. Canada’s largest banks carry CET1 ratios averaging about 13.4%, comfortably above the 11% regulatory minimum⁴. That strength is well recognised: in 2026 OSFI lowered the Domestic Stability Buffer to 3.0%⁵, freeing capital and signalling confidence in the banks’ loss-absorbing capacity.

For income investors, the pay-off is a combination of reliable, growing dividends and yields that generally sit around 3.5% to 4%⁶ for the major banks – typically above the broader market, with lifecos broadening the income base.

Those life insurers deserve a closer look. Manulife, Sun Life, Great-West Lifeco and Power Corp are far more than domestic insurers – they are global wealth and asset-management franchises. Manulife alone oversees average assets under management and administration of roughly $1.07 trillion⁷, with a fast-growing Asian business and a global wealth arm that diversify its earnings well beyond traditional insurance. As populations age, demand for retirement income, health coverage and longevity products continues to build – a structural growth angle the banks do not share. And like the banks, the lifecos are committed dividend payers, with Sun Life and Manulife recently yielding around 4%⁸, which deepens the income profile of a Canadian financials allocation.

Canadian Utilities: The Essentials of Everyday Income

Utilities provide a different but equally dependable source of income. Power, gas, water, pipelines, and telecom are non-discretionary services — consumers need them regardless of economic conditions. Most of these companies operate in rate-regulated environments⁹, where provincial regulators set the rules and rates for electricity, gas and pipeline services, giving their revenues a degree of predictability that few other sectors can match. That framework is the foundation of utilities’ defensive, bond-like reputation.

Predictable cash flows translate into dependable, rising dividends. Fortis, for example, has raised its dividend for 52 consecutive years¹⁰, one of only a handful of Canadian companies to earn “Dividend King” status.

The sector also sits in front of a powerful structural tailwind. Electricity demand in Canada is projected to grow between 26% and 85% by 2050¹¹ as the economy electrifies, with Ontario alone forecast to grow 75%¹². A major driver is the rise of energy-hungry AI data centres¹³, and the utilities, pipelines and telecom networks that move power and data are the backbone of that build-out.

Because their earnings are steady and their yields bond-like, utilities tend to be sought as a defensive ballast in portfolios and can attract renewed interest when interest rates ease.

Turning Canada’s Income Sectors Into Enhanced Monthly Income

Evolve offers a way to own both of these sectors while turning their steady dividends into enhanced monthly income. Its established Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund (BANK) and Evolve Canadian Utilities Enhanced Yield Index Fund (UTES) are proven strategies with over $1.7 billion in combined assets under management (as at July 14, 2026)¹⁴, each pairing an active covered call strategy on up to 33% of the portfolio with up to 25% modest leverage (1.25x) that seeks to amplify income and total-return potential.

Now there is another way to own these same sectors without the leverage. The Evolve Canadian Financials Yield Fund (CFIN) and Evolve Canadian Utilities Yield Fund (CUTE) track the same underlying indices and apply the same active covered call strategy as BANK and UTES, however, carry no leverage. As a result, CFIN and CUTE are not classified as alternative funds and are rated medium risk – designed for clients seeking steady monthly income from resilient Canadian sectors with a more conservative profile.

Sources

Investing News Network, “How is the S&P/TSX Composite Index Weighted?” (last updated June 24, 2025)
Seeking Alpha, “Bank of Montreal: Canada’s Oldest Dividend Payer” — February 10, 2020
Dividend.com, “Over 100 Years of Dividends for 5 Canadian Companies” — (2016)
OSFI, “Benchmarking Canadian Bank Capital Ratios to International Peers – Technical Note” — February 13, 2026
OSFI, “OSFI lowers Domestic Stability Buffer to 3.0% so Canada’s largest banks can deploy more capital” — June 19, 2026
Sure Dividend, “The Top 5 Canadian Bank Stocks, Ranked In Order” — last updated July 10, 2026
Insurance Business, “Manulife sets record 2025 core earnings as Asia and Global WAM power growth” — February 12, 2026
The Successful Investor, “Sun Life & Manulife Financial Pay 4.1% and 4.2% Dividend Yield” — March 18, 2025
Canada Energy Regulator, “The role of the regulator and utility providers” — February 2021
Fortis Inc., “Investor Resources” — accessed July 2026 (continuously updated)
Canada Energy Regulator, “Canada’s Energy Future 2026: Executive Summary” — March 17, 2026
IESO, “Electricity Demand in Ontario to Grow by 75 per cent by 2050” — October 16, 2024
Canada Energy Regulator, “Market Snapshot: Energy demand from data centres is steadily increasing, and AI development is a significant factor” — October 2, 2024
As at June 30, 2026.

Disclaimers:

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. All funds described herein is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

Leverage increases risk.

AI Headwinds Have Become Tailwinds for Cybersecurity

Posted on June 17, 2026June 17, 2026 by evan kwan

Cybersecurity was one of the hardest-hit sectors during the “AI Scare Trade” that gripped markets earlier this year. As artificial intelligence grew more capable, investors began to question whether software companies would be strengthened by the technology or replaced by it. For cybersecurity providers, the market’s answer was swift and harsh. A few months later, the story looks very different. A landmark industry alliance has placed the sector’s leaders at the heart of AI-powered defence, and strong results have confirmed that demand remains healthy. AI is now increasingly viewed as a tailwind for cybersecurity rather than a threat. Here’s how the narrative turned, and why it matters for investors.

A Sentiment-Driven Sell-Off

To understand the recovery, it helps to start with what caused the slide. The early-year decline in cybersecurity stocks had little to do with the businesses themselves. CNBC reported that the trigger came in late February, when Anthropic introduced Claude Code Security, an AI tool that scans software code for vulnerabilities.¹ Investors began to worry that services like it could displace work traditionally handled by cybersecurity vendors, and the selling quickly spread across the sector’s biggest names.¹ Yet nothing within the companies had changed. The decline was a matter of sentiment, not fundamentals.¹

The industry never accepted the market’s fears. According to CNBC, CrowdStrike CEO George Kurtz publicly pushed back, maintaining that the new tool was no replacement for an established security platform.¹ It would not take long for the rest of the market to come around.

Project Glasswing Reframed the Narrative

The turning point came in early April. According to Anthropic’s announcement, Project Glasswing launched as an initiative using its newest AI model, Claude Mythos Preview, to help safeguard the world’s most critical software.² Rather than positioning AI as a rival to the cybersecurity industry, Glasswing embraced it. The initiative brought together leaders from the technology, cybersecurity, and financial sectors, including Apple, Google, Nvidia, CrowdStrike, Palo Alto Networks, and JPMorganChase. Together, these partners are putting advanced AI to work finding and fixing vulnerabilities in critical software.²

The message to markets was hard to miss. One of the world’s leading AI developers had chosen to work with the cybersecurity industry, not around it. JPMorgan analyst Brian Essex reiterated overweight ratings on CrowdStrike and Palo Alto Networks, describing them as essential layers in the defensive stack, according to CNBC.³

Earnings Reinforced the Recovery

Earnings soon backed up the industry’s confidence. Back in March, even as sentiment remained fragile, CrowdStrike’s Q4 2026 earnings release reported a record fiscal year, with the company describing the AI revolution as a “new, generational growth opportunity.”⁴ Fortinet reported in its Q1 2026 earnings release that it exceeded the high end of its first-quarter guidance, and raised its full-year revenue outlook.⁵ For a sector that had been sold on fears of obsolescence just months earlier, the message could not have been clearer: demand for cybersecurity was strengthening, not fading.

Why Cybersecurity Belongs in a Portfolio

For investors, the takeaway goes beyond a single news story. Cybersecurity is an essential service in the modern economy, and this year’s events have only reinforced that role. Anthropic’s Project Glasswing announcement reflects the premise that AI has crossed a threshold where protecting critical infrastructure is more urgent than ever, and that older approaches to securing systems are no longer sufficient on their own.² In its Q1 2026 earnings release, Fortinet attributed part of its billings growth to a threat environment it described as being intensified by AI.⁵ CrowdStrike’s Q4 2026 earnings release described the company as “mission-critical infrastructure” for enterprises adopting AI.⁴

Put simply, the technology the market feared would shrink this industry may instead be expanding it. The result is a sector that pairs the stability of an essential service with a growth story tied directly to the rise of AI. For investors seeking both resilience and growth potential, cybersecurity is worth a closer look.

Diversified Exposure with CYBR

The Evolve Cyber Security Index Fund (CYBR) is an index-based, market-cap-weighted solution that provides diversified exposure to the global leaders in cybersecurity. CYBR holds many of the platform names at the centre of this shift, with broader exposure across endpoint, cloud, network, and identity security. For investors seeking single-ticker access to a sector where the AI narrative has shifted from headwind to tailwind, CYBR offers a straightforward way to participate.

Learn more about CYBR at https://evolveetfs.com/product/cybr/

Sources

DISCLAIMERS

Published June 17, 2026.

When Markets Get Choppy, Healthcare Gets Interesting: Three Reasons to Own the Sector Now

Posted on June 17, 2026June 17, 2026 by evan kwan

It has been a nervous year for markets. Tariff threats keep resurfacing, the headlines swing from rally to sell-off and back again, and investors are left guessing at the Federal Reserve’s next move. In times like these, the temptation to head for the sidelines is understandable.

But for those who would rather stay invested than try to time the market, the better question is where to ride out the storm. Healthcare has long been one of the answers. People don’t stop filling prescriptions or scheduling surgeries because the market had a bad week, and that steady demand gives the sector a natural resilience in uncertain times.

Healthcare did have a rough start to the year. Drug pricing threats and the prospect of pharmaceutical tariffs weighed on sentiment, leaving the MSCI World Health Care Index down 2.72% year-to-date.¹ That cloud is now lifting. By April, the White House had reached most-favoured-nation pricing agreements with seventeen major pharmaceutical companies—including Eli Lilly, Novo Nordisk, Merck, and Pfizer—easing the drug-pricing uncertainty that had weighed on the sector.² So, with the policy noise fading, let’s look at three reasons the sector is worth holding through the volatility.

Weight-Loss Pills Are Bringing in Entirely New Patients

GLP-1 medications have already transformed the treatment of obesity and type-2 diabetes, but for many patients they came with one major drawback: they had to be injected. That barrier is now falling. Eli Lilly announced FDA approval in April for Foundayo, the first GLP-1 weight-loss pill with no food or water restrictions³.

The pill isn’t simply taking share from injectables, it’s drawing in patients who had stayed away altogether. As more of those patients enter the market, Morgan Stanley projected the global obesity and type-2 diabetes treatment market could reach $190 billion by 2035.⁴

Robotic Surgery Has a Long Runway Ahead

Robotic surgery may sound like a mature industry, but globally, adoption is still in its early days. Intuitive Surgical reported placing 232 of its da Vinci 5 systems in the first quarter of 2026, up from 147 in the same quarter last year.⁵

Competition is picking up as well. While Intuitive builds AI capabilities into its platform, Medtronic announced FDA clearance for its rival Hugo system for urological procedures in December 2025.⁶ More companies competing for the same operating rooms is rarely a bad sign and it usually means the market is big enough, and growing fast enough, to support them.

Dealmaking Signals Confidence in the Sector

Perhaps the strongest vote of confidence comes from within the industry itself. According to JPMorgan’s Q1 2026 BioPharma and MedTech Deal Report, healthcare M&A reached $42 billion across 56 deals in the first quarter of 2026.⁷

The deals themselves tell a story. Eli Lilly announced an agreement to acquire Centessa Pharmaceuticals for up to $7.8 billion, expanding into sleep and neurological disorders,⁸ while Merck announced an agreement to acquire Terns Pharmaceuticals for roughly $6.7 billion to strengthen its hematology pipeline.⁹ When strategic buyers pay premiums like these, it suggests they see more value in the sector than current share prices reflect.

Why LIFE? One Ticker for Global Healthcare

Steady demand, growing treatment markets, and buyers willing to pay up, together they make a strong case for healthcare in a volatile market. For investors who want that exposure without betting on any single company, the Evolve Global Healthcare Enhanced Yield Fund (LIFE) offers a simple way to get it. LIFE holds the 20 largest global healthcare companies across pharmaceuticals, medical devices, and diagnostics. The same companies driving the GLP-1 expansion, the rise of robotic surgery, and the current wave of dealmaking.

LIFE also applies an active covered call overlay designed to generate tax-efficient monthly income. In an unsettled market, that regular income can make it easier to stay the course while the sector’s longer-term story plays out.

For more information on LIFE ETF, visit the fund page at https://evolveetfs.com/product/life/

Sources

Bloomberg, as at May 29, 2026. MSCI World Health Care Index and MSCI World Index, year-to-date total returns.
https://www.whitehouse.gov/fact-sheets/2026/04/fact-sheet-president-donald-j-trump-announces-deal-with-regeneron-to-bring-most-favored-nation-pricing-to-american-patients/ (Apr 23, 2026)
https://investor.lilly.com/news-releases/news-release-details/fda-approves-lillys-foundayotm-orforglipron-only-glp-1-pill (Apr 1, 2026)
https://www.morganstanley.com/insights/articles/glp1-weight-loss-market-may-double-190-billion-2035 (Apr 22, 2026)
https://www.sec.gov/Archives/edgar/data/0001035267/000103526726000029/q126ex-991earningsrelease.htm (Apr 21, 2026)
https://news.medtronic.com/2025-12-03-Medtronic-announces-FDA-clearance-of-Hugo-TM-robotic-assisted-surgery-system-for-urologic-surgical-procedures (Dec 3, 2025)
https://www.jpmorgan.com/insights/markets-and-economy/outlook/biopharma-medtech-deal-reports (Apr 16, 2026)
https://investor.lilly.com/news-releases/news-release-details/lilly-acquire-centessa-pharmaceuticals-advance-treatments-sleep (Mar 31, 2026)
https://www.merck.com/news/merck-to-acquire-terns-pharmaceuticals-inc-expanding-its-hematology-pipeline-with-tern-701-a-novel-candidate-for-chronic-myeloid-leukemia-cml/ (Mar 25, 2026)

DISCLAIMERS

Published June 17, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Global Healthcare Enhanced Yield Fund (“LIFE”) is offered by Evolve Funds Group Inc. and distributed through authorized dealers.

‘Big Six’ Canadian Banks Q2 Earnings Roundup

Posted on June 8, 2026June 8, 2026 by evan kwan

Canada’s Big Six banks wrapped up a strong second quarter, each coming in ahead of what analysts had forecast thanks to solid performance across their main businesses. Earnings were up across the board, and five of the six lifted their dividends, with CIBC as the exception. The numbers landed well despite a cloudy economic picture and trade tensions mounting ahead of negotiations for USMCA renewal. Revenue rose at a steady clip, capital markets pulled more than its weight at nearly every bank, and credit quality held firm, with most lenders putting aside less money for bad debt expense or holding it flat as they kept watch on the road ahead.

Royal Bank of Canada

RBC reported a 25% rise in second-quarter profit, beating forecasts on the strength of a sharp pickup in capital markets and smaller loan provisions. Earnings reached $5.5 billion, or $3.85 per share, up from $4.39 billion, or $3.02 per share, a year earlier. RBC reserved $912 million for potential credit losses. That marked a steep drop from the $1.4 billion it set aside a year earlier. RBC posted higher return on equity at 17.2%, above its 17% target, further evidence of its continued efforts to bolster profitability. The bank also bumped its quarterly dividend up 12 cents to $1.76 per share and laid out plans to repurchase 45 million shares, roughly 3% of current common stock.

Toronto-Dominion Bank

TD came in above expectations for the quarter, carried by strong results in its Canadian retail and capital markets arms and a lighter provision for loans at risk of default. Earnings rose to $4.17 billion, or $2.38 per share, from $3.63 billion, or $1.97 per share, a year earlier. Canadian personal and commercial banking did the heavy lifting, with profit up 15% to $1.93 billion, while the U.S. business added $960 million in adjusted net income, an 8% gain. TD set aside $1 billion against credit losses, down from $1.34 billion a year earlier. The bank is leaning on its Canadian operations for growth as it trims costs and cleans up the anti-money-laundering failures in its U.S. arm. It raised its quarterly dividend 4 cents to $1.12 per share.

Bank of Montreal

BMO beat expectations for the quarter, lifted by its capital markets division and its U.S. operations. Profit surged 34% from a year earlier to $2.6 billion, or $3.53 per share, compared with $1.96 billion, or $2.50 per share, previously. Revenue grew 10% to $9.6 billion, outpacing a 6% rise in expenses to $5.3 billion. The bank set aside $739 million for credit losses, below market expectations, including $734 million for loans the bank believes will not be repaid. Return on equity ticked up to 13% firm wide, and 8.6% in the U.S. after BMO unveiled its strategy to restore profitability in the U.S. The dividend rose 4 cents to $1.71 per share.

Bank of Nova Scotia

Scotiabank outpaced expectations for the quarter, helped by its Canadian banking division as the lender pushes to improve its returns. Profit came in at $2.6 billion, or $2.00 per share, up from $2 billion, or $1.48 per share, a year earlier. Revenue rose 8% to $9.8 billion, while expenses crept up just 2% to $5.2 billion, a result the bank tied to higher costs in staffing, technology, advertising and business development. Provisions for credit losses totaled $1.2 billion, heavier than market expectations, with $1.1 billion against loans the bank believes may not be repaid. Scotiabank set aside $1.4 billion in provisions in the same quarter last year. The bank logged an adjusted return on equity of 13.2% and stood by its aim of hitting 14% in 2027. It raised its quarterly dividend 4 cents to $1.14 per share.

Canadian Imperial Bank of Commerce

CIBC posted a 23% increase in quarterly profit, clearing expectations, with broad-based strength across all its business units. Earnings rose to $2.47 billion, or $2.53 per share, from $2.01 billion, or $2.04 per share, a year earlier. Capital markets were the front-runner, with earnings up 40% as trading and investment banking revenue climbed and the bank clawed back money it had earlier reserved for loan losses. Credit loss provisions held steady at $605 million, though the portion tied to past-due loans rose $85 million to $548 million on economic strain and seasonal swings. The bank agreed to sell its stake in CIBC Caribbean for approximately US$1.6 billion, expected to close in the first half of 2027, and plans to buy back up to 30 million shares. Its dividend held at $1.07 per share.

National Bank of Canada

National Bank rounded out the group with a strong showing, posting a steep rise in profit that beat forecasts on lighter loan loss reserves and solid results from capital markets and retail banking. Earnings reached $1.23 billion, or $3.06 per share, up from $896 million, or $2.17 per share, a year earlier. Provisions for credit losses fell to $233 million from $545 million, driven largely by a smaller $38 million reserve against performing loans. The bank is targeting about $300 million in annual savings from the integration of Canadian Western Bank. To date, National Bank has reached $215 million and expects $270 million by year end. The bank also lifted its quarterly dividend 8 cents to $1.32 per share.

Source:

https://www.theglobeandmail.com/business/article-canada-banks-earnings-second-quarter-results-2026/ (May 28, 2026)

DISCLAIMER

Published June 8, 2026.

Leverage increases risk.

Bitcoin Monthly – The Foundation Beneath the Market Strengthens

Posted on June 8, 2026June 8, 2026 by evan kwan

Hi everyone – welcome back to Evolve’s Bitcoin Monthly newsletter. We hope our views on Bitcoin adoption and market conditions prove useful for investors considering Bitcoin as an investment, or for those managing an existing Bitcoin position.

After April’s 13.57% surge¹, May was the digestive period the market needed. Bitcoin opened the month near $77,000 and closed near $73,750, a pullback of roughly 4.5% that ended a two-month winning streak.² The path was choppy: an early-May push above $81,000 on the day the CLARITY Act cleared Senate Banking, a steady grind lower through the back half of the month, and a low near $72,500 in the final week. The headline reads “Bitcoin’s worst month of 2026” – but the structural inputs all moved in the right direction. May was a stress test, and in our view, the asset class passed.

Our macro framework has not changed: governments continue to overspend, adoption continues to broaden, and Bitcoin-backed products are finding their way into traditional finance. Canada’s Spring Economic Update, released May 1, pegged the federal deficit at $66.9 billion for 2025–26 – still 2.1% of GDP, and a reminder that fiscal dominance is not a one-country story.³ What is changing is the institutional architecture: the U.S. now has a confirmed Fed Chair with personal conviction in this asset class, a market-structure bill that has cleared its first Senate hurdle, and an ETF complex that just absorbed its largest monthly outflow of the cycle without breaking.

The First Real ETF Stress Test

The headline number is sobering. U.S. spot Bitcoin ETFs recorded $2.97 billion in net outflows in May – the largest monthly outflow of 2026 and the worst figure since November 2025. ⁴ A ten-day consecutive outflow streak – the longest on record – saw approximately $2.97 billion withdrawn, with single-day exit at a peak of $733 million on May 27. ⁴ BlackRock’s iShares Bitcoin Trust (IBIT) – by far the largest spot Bitcoin ETF in the world – recorded a $528 million single-day outflow on May 28, the second-largest in the fund’s history.⁵

We think about this two ways.

First, the price reaction. Despite a significant wall of selling, Bitcoin traded in a relatively tight range all month and finished meaningfully lower — though the magnitude of the decline was more contained than many might have expected. A similar redemption episode a year ago would likely have produced a sharper move. Spot demand — corporate treasuries, sovereign accounts, self-custody buyers — seemed to absorb the ETF supply without a disorderly break, a signal, in our view, of market maturation. The ETF wrapper may now function as a structural source of demand; it is also, by construction, a structural source of supply when conditions warrant. Both directions are consistent with a functioning two-way market.

Second, the participant mix. Bitwise CIO Matt Hougan has made the point repeatedly: institutions willing to allocate to a non-consensus asset like Bitcoin tend to be exceptionally high-conviction, and their capital is “very sticky.”⁶ The May outflows look like tactical rotation tied to rising Treasury yields, a stronger dollar, and profit-taking after April’s rally – not abandonment of the thesis.

Washington Delivers

Two structural wins this month – both of which we flagged as in motion in April.

On May 13, the U.S. Senate confirmed Kevin Warsh as the next Chair of the Federal Reserve in a 54–45 vote – the narrowest margin in modern Fed history.⁷ Only one Democrat, Pennsylvania’s John Fetterman, crossed the aisle. Warsh’s first FOMC meeting is scheduled for June 16–17. We said in April that the signal was unmistakable – the person about to lead the world’s most powerful central bank has personal Bitcoin conviction, has called for “regime change” in Fed communications, and has previously framed Bitcoin as comparable to gold in its potential role as a store of value. That signal is now reality, and it arrives precisely as fiscal dominance forces central banks into harder choices about how aggressively to lean against rising government debt costs.

On May 14, the Digital Asset Market Clarity Act – the CLARITY Act – cleared the Senate Banking Committee in a 15–9 vote.⁸ Two Democrats, Ruben Gallego of Arizona and Angela Alsobrooks of Maryland, crossed the aisle, building on the bipartisan momentum that produced the largest crypto vote in House history back in April. The bill establishes a three-category framework: digital commodities under CFTC jurisdiction, investment-contract assets under SEC oversight, and payment stablecoins under banking regulators consistent with the GENIUS Act baseline. Bitcoin briefly traded above $81,900 on the news before retracing with the broader risk-off move.⁸ The bill still needs to clear the Senate floor and be reconciled with the House version, but the committee vote pushed the ceiling on bipartisan crypto legislation higher than it has ever been.

For Canadian investors, the U.S. policy backdrop matters because it sets the global tone. Regulatory clarity south of the border draws institutional capital off the sidelines, deepens the liquidity that underpins Bitcoin’s price, and shifts the burden of proof for trustees, pension boards, and wealth managers everywhere – including here.

Geopolitics Still in Play

The Strait of Hormuz situation we covered in April remains the live macro tail risk. The U.S. naval blockade of Iran that began April 13 continued through May, with U.S. Central Command reporting that by May 22 it had turned away 94 vessels, leaving roughly 31 tankers carrying about 53 million barrels of Iranian oil stuck in the Gulf.⁹ Iran’s losses from blocked oil revenue, by Pentagon estimates, exceeded US$4.8 billion in the first two and a half weeks alone.

On May 29, President Trump posted on Truth Social that he was meeting in the “Situation Room” to make a “final determination” on the Iran peace deal, and signalled the blockade would be lifted.¹⁰ Markets reacted immediately – oil dropped more than 2%, U.S. equities turned positive, and Bitcoin rallied roughly $1,000 off the morning’s lows. But as of month-end the situation is best described as a hopeful inflection, not a resolution. The peace deal is not signed, the blockade has not been formally rescinded, and the strait remains the world’s most important energy chokepoint. We are watching it closely into June.

This is exactly the kind of macro environment in which Bitcoin’s digital-gold properties matter. Gold and Bitcoin are complementary diversifiers in a fiat-debasement world, not competitors – a point we have made consistently, and one the rotation flows continue to validate.

Under the Hood

If you only looked at price and ETF flows, May looked like a soft month. The on-chain data tells a different story.

Long-term holders now control approximately 78.3% of circulating Bitcoin supply – a record share – and exchange reserves have fallen toward multi-year lows around 2.2–3 million BTC, levels not seen since 2017–2018.¹¹ Coins are not moving back to exchanges to be sold; they are sitting in cold storage, ETF baskets, and corporate balance sheets.

Valuation metrics remain cool. The MVRV Z-score sat near 1 through mid-May, a neutral-to-cooling reading.¹¹ Prior cycle tops have printed above 6. By this measure, Bitcoin is nowhere near classic euphoria – a useful counterpoint to the “worst month of 2026” headlines.

Corporate accumulation is moderating, not reversing. Strategy (formerly MicroStrategy) now holds 843,738 BTC at an average cost basis of $75,700¹², but its May 4–10 purchase of just 535 BTC¹³ was its smallest weekly buy of 2026, and on May 5 Michael Saylor publicly opened the door to selling for the first time since December 2022.¹⁴ We read this as a structural evolution rather than a thesis change. Strategy is becoming a more actively managed Bitcoin-anchored vehicle – retiring debt at a discount, parking idle capital in short-duration Treasuries when accumulation conditions are not ideal. The marginal corporate buyer is slowing; in its place, ETF baskets, sovereign treasuries, and traditional banks are filling the demand curve. That is what a maturing buyer base looks like.

One more data point worth flagging: on May 27, SoFi Technologies became the first U.S. national bank to roll out its own dollar-backed stablecoin, SoFiUSD, directly to its 15 million retail banking customers on a public blockchain.¹⁵ That is the third leg of our thesis – Bitcoin-adjacent products migrating into traditional finance – playing out in real time.

Looking Ahead

May was the kind of month every asset class needs occasionally. Bitcoin gave back some of April’s gain, the ETF complex absorbed its largest outflow of the cycle without breaking, and the structural inputs – Fed leadership, regulatory clarity, on-chain tightness – moved further in our favour.

June brings two important macro prints: Chair Warsh’s first FOMC on June 16–17, and the next stage of the CLARITY Act on the Senate floor. Both have the potential to be catalytic. The Strait of Hormuz situation remains an open file we will be watching closely. And the four-year cycle conversation – much discussed entering 2026 – is, for now, settling into a different rhythm: shallower drawdowns, faster recoveries, stickier holders, and structural buyers who absorb selling that prior cycles would have amplified.

The institutions are still arriving, just not in a straight line. We remain constructive Bitcoin investors and look forward to what June brings.

Sources

¹ Source: Bloomberg, CME CF Bitcoin Reference Rate, as at April 30, 2026.

² CoinDesk, “Bitcoin price news: BTC set to close month of May with losses,” May 29, 2026.

³ Government of Canada, “Spring Economic Update 2026 – Economic and fiscal overview.”

⁴ CoinDesk, “Bitcoin extends slide as spot ETF outflows hit a record while Wall Street rips on AI,” June 1, 2026.

⁵ SpotedCrypto, “BlackRock IBIT Bitcoin ETF Outflows May 2026: Near-Record Day,” May 28, 2026.

⁶ CoinDesk, “Institutional investors held firm through bitcoin’s downturn, Bitwise CIO Matt Hougan says,” March 16, 2026.

⁷ CNBC, “Kevin Warsh wins Senate confirmation as the next Federal Reserve chair,” May 13, 2026.

⁸ CNBC, “Crypto industry scores win as Clarity Act regulation bill clears Senate hurdle,” May 14, 2026.

⁹ United Against Nuclear Iran, “Iran War Shipping Update,” May 11, 2026.

¹⁰ CoinDesk live blog citing Truth Social post by President Trump, May 29, 2026.

¹¹ On-chain data sourced from Glassnode and CryptoQuant, May 2026.

¹² SEC EDGAR Form 8-K, Strategy Inc., filed May 18, 2026 (BTC acquired May 11–17, 2026: aggregate holdings 843,738 BTC, avg. purchase price $75,700).

¹³ SEC EDGAR Form 8-K, Strategy Inc., filed May 11, 2026 (BTC acquired May 4–10, 2026: 535 BTC at avg. $80,340; aggregate holdings 818,869 BTC as of May 10, 2026).

¹⁴ CoinDesk, “Strategy weighs selling bitcoin to fund dividends amid Q1 net loss,” May 5, 2026.

¹⁵ CoinDesk, “SoFi brings bank-issued stablecoin to 15 million users in crypto push,” May 27, 2026.

Disclaimer

Published June 8, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. The Evolve Bitcoin ETF (“EBIT”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

The unpredictable nature of the cryptoassets can lead to loss of funds.

AI, Chips, Cyber, Cloud: What’s Powering Tech in 2026

Posted on May 26, 2026May 26, 2026 by Janice Leung

Technology has had a remarkable start to 2026. According to Bloomberg, the Nasdaq-100 Technology Sector Index (NDXT10) delivered a total return of 23.22% in April¹, leading the broad market rally. There’s a lot driving the sector right now, but a handful of intertwined themes stand out: the largest infrastructure investment cycle in tech history, the semiconductor strength that comes with it, the AI-amplified cybersecurity tailwind, and the cloud platforms through which enterprises increasingly consume that AI.

It Starts with the Hyperscalers

Big Tech is in the middle of the most ambitious infrastructure buildout in its history. Morgan Stanley, as reported by Benzinga, projects hyperscalers — including names like Alphabet, Meta, and Microsoft — to collectively spend roughly US$805 billion on AI and cloud infrastructure in 2026, rising to roughly US$1.1 trillion in 2027². The scale is unprecedented. Every major hyperscaler has lifted capex guidance multiple times over the past 18 months, each round shaped by the same underlying constraint: not enough capacity to meet enterprise AI demand.

Spending is flowing into new data centres, the power and cooling infrastructure to run them, networking gear, and racks of AI accelerators — much of it earmarked for training and inference clusters that simply didn’t exist three years ago. Capital deployment at this scale doesn’t stay inside the hyperscalers themselves. It flows through to the suppliers building the underlying infrastructure — semiconductor manufacturers, networking equipment vendors, power and cooling providers, and the equipment makers behind the chip fabs. Nowhere has that flow-through been more visible than in the chip sector itself.

The Chips That Make It Possible

Much of that capex flows through to the semiconductor industry, which is coming off its strongest year on record. The Semiconductor Industry Association reported that global chip sales reached US$791.7 billion in 2025, a 25.6% increase over 2024, and are projected to surpass US$1 trillion in 2026³. Growth on a base this large reflects a structural shift in demand rather than a cyclical bounce — driven by AI training and inference, edge computing, and the steadily rising compute intensity of modern software.

The demand isn’t evenly distributed across the chip industry. AI chips and the specialized equipment used to manufacture them have been pulling far harder than everything else, concentrating much of the growth in a relatively small group of industry leaders. And as that compute footprint expands, so does the digital surface area that has to be defended.

Cybersecurity: AI as Both Threat and Tailwind

AI is amplifying the threat landscape. The same models powering productivity gains are being weaponised — automated phishing, deepfake social engineering, and AI-generated malware are now standard tools in the threat-actor playbook. The result: every dollar of AI infrastructure spend creates more attack surface, and more reason for enterprises to spend on defending it. Enterprises are consolidating onto fewer “best-of-suite” platforms — a trend Palo Alto Networks reinforced in February 2026 with its US$25 billion acquisition of CyberArk^4,5.

Cloud: Where AI Reaches the Enterprise

If chips and data centres are the foundation of the AI build, the cloud is where it gets delivered. The big three — Microsoft Azure, Google Cloud, and Amazon Web Services — capture most enterprise cloud spend and are the rails through which companies consume AI, whether through managed model services like Azure OpenAI, Vertex AI, and Bedrock, GPU compute, or AI-integrated software running on top. CNBC reported that all three grew faster in the most recent quarter than they have in years, with Google Cloud crossing US$20 billion in quarterly revenue⁶ and Microsoft reporting paid Copilot enterprise seats reaching over 20 million by April, up from 15 million in January⁷ — a clear sign that AI adoption is broadening beyond early pilots into everyday enterprise workflows.

Putting It Together: QQQT & QQQY

These themes don’t operate in isolation — and they’re only part of the broader story playing out across technology. Hyperscaler capex feeds the chipmakers; the chips power the cloud; the cloud expands the surface area that needs to be defended, and serves as the layer through which AI reaches the enterprise. For diversified exposure to the names at the centre of these dynamics — and the rest of the sector alongside them — Evolve offers two ways to participate.

The Evolve NASDAQ Technology Index Fund (QQQT) is designed to give investors targeted, single-ticker access to the technology backbone of the Nasdaq-100 — the platform leaders behind cloud and AI, the semis powering the AI buildout, and the cybersecurity platforms consolidating the industry. QQQT is a pure tech expression of the Nasdaq-100, focused on the companies actually classified as technology— without the consumer or communication-services names embedded in a broader Nasdaq-100 wrapper.

The Evolve NASDAQ Technology Enhanced Yield Index Fund (QQQY) holds the same underlying technology portfolio as QQQT, paired with an active covered call writing program— designed to enhance yield and help mitigate volatility. For investors who want exposure to the Nasdaq technology sector alongside an additional source of monthly income, QQQY offers both in a single ticker.

Learn more about QQQT at evolveetfs.com/product/qqqt, or visit evolveetfs.com/product/qqqy for the enhanced yield version.

Sources

DISCLAIMERS

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve NASDAQ Technology Index Fund (“QQQT”) and Evolve NASDAQ Technology Enhanced Yield Index Fund (“QQQY”) are offered by Evolve Funds Group Inc. and distributed through authorized dealers.

The information contained herein is a general description and is not intended to be specific investment advice to any particular investor nor intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, and is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found at https://evolveetfs.com/

Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index are trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Evolve ETFs. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

Any use of or references made to Nasdaq® and any materials or indices thereof, are used under licence and do not imply any formal association.

Global Materials and Mining: Five Forces Reshaping Global Mining

Posted on May 19, 2026May 19, 2026 by Justin Doone

The materials and mining industry experienced a strong year in 2025. Per J.P. Morgan Private Bank, gold delivered its strongest single-year performance since 1979,¹ copper posted its largest annual gain since 2009,² and SIPRI reported that global defence budgets reached a record US$2.9 trillion³ — the eleventh consecutive year of growth — driving demand for the steel, titanium, and specialty alloys necessary for the rearmament cycle. Infrastructure spending from the United States to Europe continued to underpin demand for steel and industrial metals, while tariff policy reshuffled global supply chains in favour of domestic producers. The world is being rewired, and that rewiring runs through materials.

AI Infrastructure is a Metals Story Before it is a Chip Story

The top five hyperscalers (Amazon, Alphabet, Meta, Microsoft, and Oracle) are on track to spend US$805 billion on infrastructure in 2026 alone, with Morgan Stanley projecting that figure climbs to US$1.1 trillion by 2027.⁴ None of it gets built without metal: copper for power distribution, steel for structural framing, and aluminium for cooling systems. The grid upgrades required to feed these facilities are more metal-intensive still. The real picks-and-shovels play in AI is in materials.

Electrification and the Energy Transition

According to the International Copper Association, an electric vehicle uses three to four times more copper than a conventional car, and that’s before a single charging port is built. Charging infrastructure alone will require an additional 978,000 tonnes of copper by 2040.⁵ As the IEA has documented, solar, wind, and grid-scale storage are far more mineral-intensive per unit of energy than the fossil fuel infrastructure they replace.⁶ Mine disruptions in Indonesia and the DRC are already squeezing refined copper supply, per International Copper Study Group data reported by Shanghai Metal Market.⁷ Demand is accelerating. Supply is not.

Defence Rearmament Cycle

At the June 2025 NATO Summit in The Hague, allies committed to spending 5% of GDP on defence by 2035.⁸ The metals dimension is rarely discussed: every jet, missile, naval vessel, and armoured vehicle depends on specialty titanium alloys, high-grade steel, and nickel-based superalloys. All materials sourced from a narrow group of aerospace-grade producers. The rearmament cycle is one of the most durable and underappreciated tailwinds in global materials today.

Onshoring, Infrastructure Spending, and Tariffs

Washington has handed domestic producers a structural advantage. In June 2025, the Trump administration doubled tariffs on steel and aluminum imports to 50%,⁹ then extended the same 50% rate to copper that August.¹⁰ Import competition falls, domestic mills run closer to full capacity, and new investment follows.¹¹ The World Steel Association estimates global steel demand will reach 1,773 million tonnes in 2026, with Europe contributing a long-awaited recovery in demand after years of contraction.¹²

Gold’s Structural Bid: Central Banks and Debasement

The World Gold Council reported that total demand exceeded 5,000 tonnes for the first time on record, with the price setting 53 new all-time highs during the year.¹³ With record demand, annual gold supply only grew by 1%.¹³ J.P. Morgan Private Bank noted that gold scarcity and dollar diversification have made gold the go-to hedge against currency erosion and geopolitical risk.¹ Central banks bought 863 tonnes in 2025 alone, extending a multi-year run of sovereign accumulation.¹³

Why BASE? Diversified Exposure Across All Five Themes

The five themes above are not correlated with one another. Gold is driven by macro risk and central bank behaviour. Copper and aluminum are driven by the energy transition and AI infrastructure build-out. Aerospace and defence metals are driven by geopolitical rearmament. Steel and chemicals benefit from onshoring and tariff-driven domestic demand. A fund spanning all these sectors naturally absorbs what a single-commodity position cannot: when one theme pauses, others continue.

The Evolve Global Materials and Mining Enhanced Yield Index ETF (BASE) is purpose-built to capture this breadth of exposure through an ex-Canadian portfolio, providing global diversification beyond domestic materials and mining names. Its active covered call overlay, applied to up to 33% of holdings, adds a tax-efficient monthly income stream that may prove especially valuable when markets turn volatile. With supply constraints, geopolitical risk, and technological transformation reshaping global commodity markets all at once, BASE offers a single, index-based way to participate across the entire opportunity set.

Sources

^1.J.P. Morgan Private Bank, “Is it a golden era for gold?”, February 2026. https://privatebank.jpmorgan.com/nam/en/insights/markets-and-investing/is-it-a-golden-era-for-gold

^2.Mining.com, “Copper’s tight supply and tariff risks set for a volatile 2026.” December 22, 2025. https://www.mining.com/coppers-tight-supply-and-tariff-risks-set-for-a-volatile-2026/

^3.SIPRI, “Global military spending rise continues as European and Asian expenditures surge.” April 27, 2026. https://www.sipri.org/media/press-release/2026/global-military-spending-rise-continues-european-and-asian-expenditures-surge

^4.Benzinga / Yahoo Finance, “David Sacks Says AI Could Drive 75% Of US GDP Growth As Morgan Stanley Sees Big Tech AI Capex Surging Past $800 Billion In 2026.” May 6, 2026. https://finance.yahoo.com/economy/articles/david-sacks-says-ai-could-220110765.html

^5.International Copper Association, “Copper: The Material of Choice for Vehicle Manufacturers.” https://internationalcopper.org/resource/copper-the-material-of-choice-for-vehicle-manufacturers/

^6.International Energy Agency, Global Critical Minerals Outlook 2024. May 2024. https://www.iea.org/reports/global-critical-minerals-outlook-2024

^7.Shanghai Metal Market, “ICSG: Global Refined Copper Market to Face a Supply Deficit of 150,000 mt Next Year.” October 8, 2025. https://news.metal.com/newscontent/103560248

^8.NATO, The Hague Summit Declaration, June 25, 2025. https://www.nato.int/en/about-us/official-texts-and-resources/official-texts/2025/06/25/the-hague-summit-declaration

^9.The White House, “Fact Sheet: President Donald J. Trump Increases Section 232 Tariffs on Steel and Aluminum.” June 3, 2025. https://www.whitehouse.gov/fact-sheets/2025/06/fact-sheet-president-donald-j-trump-increases-section-232-tariffs-on-steel-and-aluminum/

^10.The White House, “Fact Sheet: President Donald J. Trump Takes Action to Address the Threat to National Security from Imports of Copper.” July 30, 2025. https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-takes-action-to-address-the-threat-to-national-security-from-imports-of-copper/

^11.Nucor 8-K (Apr 27, 2026), SEC EDGAR. https://www.sec.gov/Archives/edgar/data/0000073309/000119312526182332/d150975dex991.htm

^12.World Steel Association, Short Range Outlook, October 13, 2025. https://worldsteel.org/media/press-releases/2025/worldsteel-short-range-outlook-october-2025/

^13.World Gold Council, Gold Demand Trends: Q4 and Full Year 2025. January 29, 2026. https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2025

Disclaimers

Published May 19, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Global Materials and Mining Enhanced Yield Index ETF (“BASE”) is offered by Evolve Funds Group Inc. and distributed through authorized dealers.

Bitcoin Monthly: The Direction of Travel Has Accelerated

Posted on May 6, 2026May 6, 2026 by Janice Leung

Bitcoin finished April near $76,300, up 11.87% from its opening around $68,400 – its best monthly performance since April 2025.¹ The journey was anything but smooth. The month began in the shadow of geopolitical crisis, with Bitcoin dipping below $71,000 on April 13 when ceasefire talks collapsed and the U.S. blockaded the Strait of Hormuz. From there, a powerful rally carried the price to highs near $79,000 by late April, fuelled by a wave of ETF inflows and easing tensions, before a modest pullback into month-end. The message: consolidation is over, and the market has found its footing.

Our macro assumptions haven’t changed: governments continue to overspend, adoption continues to broaden, and Bitcoin-backed products are finding their way into traditional finance. What has changed is the quality of the evidence. April delivered several developments that, in our view, accelerate the direction of travel.

Geopolitics Puts Bitcoin to the Test

The biggest macro story this month came from the Strait of Hormuz – the narrow waterway through which roughly a fifth of the world’s oil supply passes daily. In late March, Iran’s parliament formalized a toll system requiring vessels to pay for safe passage, with reports that Bitcoin and stablecoins are among the accepted payment methods.² Then, on April 13, ceasefire talks between the U.S. and Iran collapsed, and President Trump ordered a blockade of the strait.³

Bitcoin’s reaction told an important story. The price dipped to roughly $70,700 on the Sunday news, then snapped back above $74,000 within days as short sellers were forced to cover and ETF inflows resumed.⁴ Gold, meanwhile, climbed to approximately $4,800 per ounce amid safe-haven demand.⁵ Fidelity’s Jurrien Timmer has observed that flows have been rotating between gold and Bitcoin this cycle – when Bitcoin peaked in October 2025, capital shifted to gold; now, as gold loses momentum, it appears to be rotating back.⁶ The two assets are increasingly complementary in a diversified portfolio, and that’s exactly what we’ve been saying for years.

What matters most is the resilience. In our view, five years ago a geopolitical shock of this magnitude would have sent Bitcoin down 20–30%. Today it absorbed the news and recovered in days. That’s what institutional participation and a maturing market structure look like in practice.

Morgan Stanley Enters the Chat

On April 8, Morgan Stanley launched the Morgan Stanley Bitcoin Trust (MSBT) on NYSE Arca – becoming the first major U.S. bank to issue a spot Bitcoin ETF under its own name.⁷ The fund drew roughly $34 million on its first day and crossed $100 million within its first week.⁸,⁹

This is a landmark moment for the asset class. Morgan Stanley’s entry means the largest U.S. wealth management platform – overseeing trillions in client assets – now has a direct Bitcoin product to offer its financial advisors and their clients. The competitive field is deepening, and more competition means more legitimacy, more distribution channels, and more capital flowing into Bitcoin. By mid-April, cumulative U.S. spot Bitcoin ETF net inflows since launch had reached approximately $57 billion, with total assets near $94 billion.¹⁰

In our December 2025 newsletter, we wrote that the career risk around Bitcoin had flipped: five years ago, there was career risk in talking about Bitcoin in an institutional setting; today, there is career risk in ignoring it. Morgan Stanley just proved the point.

Washington Is Moving

Two regulatory developments stand out this month. First, the Digital Asset Market Clarity Act – commonly called the CLARITY Act – continues to advance through Congress, though not without friction. The bill passed the House with a 294–134 bipartisan vote, one of the largest congressional margins recorded on crypto legislation.¹¹ The bill has earned endorsements from the SEC Chair, the Treasury Secretary, and over 120 industry participants who signed a joint letter urging the Senate to act.¹²,¹³ However, the Senate Banking Committee markup was delayed after Senator Thom Tillis requested more time to resolve stablecoin yield provisions.¹⁴ The bill now faces a narrowing window – Senator Bernie Moreno warned it must clear Congress by end of May or risk being shelved indefinitely. ¹⁴ We remain optimistic: the direction of travel is toward clarity, even if the path is slower than markets would like.

Second, Kevin Warsh – President Trump’s nominee to chair the Federal Reserve – filed his financial disclosure on April 14, revealing investments in more than 20 crypto-related entities, including Polymarket, Solana-related ventures, and blockchain infrastructure projects.¹⁵,¹⁶ At his Senate confirmation hearing on April 21, Warsh vowed to be “an independent actor” and called for “regime change” at the Fed, signalling a willingness to rethink forward guidance and the central bank’s communication framework.¹⁷ On April 29, the Senate Banking Committee voted 13–11 along party lines to advance his nomination to the full Senate.¹⁸ The signal is unmistakable: the person set to lead the world’s most powerful central bank has personal conviction in this asset class, and has previously described Bitcoin as comparable to gold in its potential role as a store of value.

These are structural tailwinds, not headlines that fade. Regulatory clarity and institutional legitimacy create the conditions for the next wave of capital to enter Bitcoin.

Under the Hood

The on-chain data continues to paint a picture of accumulation and supply tightness. Long-term holders now control an estimated 78–80% of Bitcoin’s circulating supply – near cycle highs. Exchange reserves keep declining, with approximately 23,500 BTC leaving exchanges in the most recent seven-day period, a sign that coins are moving to self-custody, ETFs, and corporate treasuries. Bitcoin’s hashrate sits near a 30-day average of approximately 975 exahashes per second, reflecting robust network security and miner commitment. The MVRV ratio sits at a neutral 1.37–1.41, suggesting the market is neither overheated nor deeply undervalued, and the realized price floor around $54,000–$62,000 provides strong structural support.¹⁹

Fidelity Digital Assets published a notable report in late March titled “Getting Off Zero: Evaluating Bitcoin in 2026.” The core argument is that the burden of proof has flipped: a zero allocation to Bitcoin now requires justification. Their analysis shows that a 1–3% allocation to Bitcoin yields the largest incremental improvement in returns and risk-adjusted metrics for a traditional 60/40 portfolio. Bitcoin’s 10-year compound annual growth rate leads all major asset classes, and its correlation with M2 money supply sits at r² = 0.87 – reinforcing its role as a liquidity-sensitive store of value.²⁰

Looking Ahead

April was a month that rewarded patience. Bitcoin opened near $68,400 and closed near $76,300, a gain of 11.87% that ranks among its strongest monthly performances in recent memory.¹ Along the way it weathered a geopolitical crisis, absorbed a major new institutional entrant, and saw approximately $2 billion in net ETF inflows.²¹ The Strait of Hormuz remains a live situation, the CLARITY Act still needs to clear the Senate, and Warsh’s full Senate confirmation vote lies ahead – but the trajectory on each front favours Bitcoin.

The institutions are arriving not despite the volatility, but through it. A major U.S. bank now issues its own Bitcoin ETF. ⁷ The CLARITY Act passed the House with broad bipartisan support. ¹¹ The incoming Fed Chair’s financial disclosures revealed he has skin in the game.¹⁶ And conviction among long-term holders appears intact.

The direction of travel hasn’t changed – it’s accelerated. We remain constructive and look forward to what May brings.

Sources

¹ Bitbo / CoinGlass, “Bitcoin Posts Best Monthly Gain in a Year in April,” May 2026. bitbo.io

² Fortune, “Iran is demanding tankers in the Strait of Hormuz pay tolls in crypto: What we know so far,” April 10, 2026. fortune.com

³ CNBC, “U.S. begins blockade in Strait of Hormuz; Trump warns Iran ‘attack ships’ to stay away,” April 13, 2026. cnbc.com

⁴ CryptoTimes, “Relief Rally: Bitcoin Jumps 5% to Four-Week High After Iran Seeks US Deal,” April 14, 2026. cryptotimes.io

⁵ Fortune, “Current price of gold: April 14, 2026,” April 14, 2026. fortune.com

⁶ CoinDesk, “Fidelity Digital Assets Strategist Sees Resilient Markets Despite Geopolitical Turbulence,” April 7, 2026. coindesk.com

⁷ Morgan Stanley Press Release, “MSIM Enters Digital Investments Universe With Launch of Morgan Stanley Bitcoin Trust,” April 8, 2026. morganstanley.com

⁸ Unchained, “Morgan Stanley’s MSBT Debuts as the Cheapest Spot Bitcoin ETF, Logs $34 Million on Day One,” April 9, 2026. unchainedcrypto.com

⁹ CoinDesk, “Morgan Stanley’s Bitcoin ETF Reaches $100M in First Week, Marking the Bank’s Strongest Launch,” April 16, 2026. coindesk.com

¹⁰ Invezz / CoinGlass, “Bitcoin Pulls Back After $76K Test as ETF Flows Turn Volatile,” April 15, 2026. invezz.com

¹¹ U.S. House of Representatives, H.R.3633 – Digital Asset Market Clarity Act of 2025, passed July 17, 2025 (294–134). congress.gov

¹² CryptoTimes, “SEC Chair Backs Fast-Track Approval of CLARITY Act Amid Senate Push,” April 10, 2026. cryptotimes.io

¹³ 24/7 Wall St., “XRP Price News: 120 Crypto Firms Just Told the Senate to Pass the CLARITY Act,” April 25, 2026. 247wallst.com

¹⁴ CryptoTimes, “Clarity Act Stuck in Senate as Clock Ticks on 2026 Crypto Regulation,” April 28, 2026. cryptotimes.io

¹⁵ CNBC, “Fed nominee Warsh filings detail vast wealth, far exceeding past chairs,” April 14, 2026. cnbc.com

¹⁶ CoinDesk, “The Next Fed Chair Has a Crypto Portfolio: Here’s Everything That’s In It,” April 14, 2026. coindesk.com

¹⁷ CNBC, “Warsh pushes his plan for ‘regime change’ at Senate hearing: Analysis,” April 21, 2026. cnbc.com

¹⁸ CNBC, “Trump Fed pick Kevin Warsh clears key Senate hurdle, teeing up final vote,” April 29, 2026. cnbc.com

¹⁹ On-chain data sourced from Glassnode and CryptoQuant, April 2026. Price data via CoinGlass and Yahoo Finance.

²⁰ Fidelity Digital Assets, “Getting Off Zero: Evaluating Bitcoin in 2026,” March 25, 2026.

²¹ Bitbo / SoSoValue, “Bitcoin ETFs Pull $2B in April, Best Month of 2026,” May 2026. bitbo.io

Credit: LightFieldSolutions Source: Envato

Disclaimer

Published May 6, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. The Evolve Bitcoin ETF (“EBIT”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

The information contained herein is a general description and is not intended to be specific investment advice to any particular investor nor intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information contained herein is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, it is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found on the Evolve Funds Group Inc website at https://evolveetfs.com/

The unpredictable nature of the cryptoassets can lead to loss of funds.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated.

Certain statements contained herein are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

Certain information contained in this document is obtained from third parties. Evolve Funds Group Inc. believes such information to be accurate and reliable as of the date hereof, however, we cannot guarantee that it is accurate or complete or current at all times. The information provided is subject to change without notice.

FANGMA Q1 2026 Earnings Roundup: AI Spending Soars as the Memory Crunch Reshapes Big Tech

Posted on May 6, 2026May 6, 2026 by Janice Leung

Big Tech wrapped up its strongest reporting cycle in years. The four hyperscalers, Alphabet, Amazon, Meta, and Microsoft, all reported on the same Wednesday and collectively signalled a new chapter in the AI infrastructure arms race, with capital spending budgets ballooning past prior forecasts. A global memory shortage, supercharged by AI demand, has become the defining cost pressure across the group, with Apple and Microsoft specifically calling out memory and Meta flagging higher component costs more broadly. The Iran conflict added another layer, weighing on user growth at Meta and casting broader uncertainty over component supply chains. Cloud growth reaccelerated meaningfully across AWS, Azure, and Google Cloud, leadership transitions arrived at Apple and Netflix, and tech stocks closed out their best month since the early days of the Covid pandemic¹. Here is what each name brought to the table this quarter.

Meta (META)

Meta delivered its fastest revenue growth quarter since 2021, but the print was overshadowed by a quarter-over-quarter dip in users, which the company partially blamed on internet disruptions tied to the Iran conflict and a WhatsApp restriction in Russia. Capex came in lighter than expected for the quarter, but Meta raised its full-year guidance range to between $125 billion and $145 billion, citing higher component prices and additional data centre costs. Mark Zuckerberg used the report to spotlight Muse Spark, the first foundation model from Meta Superintelligence Labs, and to reaffirm his pursuit of “personal superintelligence.” Investors were unimpressed, sending shares down more than 6% in extended trading.²

Apple (APPL)

Apple’s first earnings call since Tim Cook announced his upcoming exit was about more than the numbers. Cook officially passes the CEO baton to longtime hardware chief John Ternus on September 1, and Ternus joined the call to flag an “incredible roadmap ahead” without giving any details. The headline beat across most lines, with the iPhone the lone significant miss, and the June quarter guide came in well above expectations. Cook warned of “significantly higher memory costs” ahead and described the AI ramp as a multi-year investment cycle, with R&D growing 33% year over year. Services revenue pushed gross margins to 49.3%, Greater China sales jumped 28%, and the board approved another $100 billion in buybacks.³

Netflix (NFLX)

Netflix beat on revenue and posted a sharp jump in earnings, the latter inflated by a $2.8 billion termination fee from the failed Warner Bros. Discovery acquisition. Despite the beat, shares dropped 9% after the company reiterated full-year guidance rather than raising it and announced that co-founder Reed Hastings will exit the board in June. Co-CEOs Greg Peters and Ted Sarandos pointed to a doubling of advertising revenue toward $3 billion in 2026, active discussions with the NFL to “expand the relationship,” and continued momentum from live programming including the World Baseball Classic. Recent price increases are tracking in line with prior cycles, with some members downgrading or churning as expected.4

Alphabet (GOOGL)

Alphabet posted its fastest revenue growth quarter since 2022, fuelled by a 63% surge in Google Cloud as enterprise AI moved from a side story to the company’s primary cloud growth driver for the first time. Capex guidance was lifted to $180 billion to $190 billion for 2026, with CFO Anat Ashkenazi flagging that 2027 spending will “significantly increase.” CEO Sundar Pichai openly acknowledged that cloud revenue would have been higher if Alphabet could meet demand, citing near-term compute constraints. Search held up well with 19% growth as AI experiences drove queries to record highs, while Waymo continued its expansion toward 500,000 fully autonomous rides per week. Alphabet stock has outperformed its Magnificent Seven peers this month.⁵

Microsoft (MSFT)

Microsoft topped estimates on the top and bottom lines and on Azure, which grew 39% on a constant currency basis. The bigger story was its 2026 capex outlook of $190 billion, well above consensus and roughly 61% higher than 2025, with approximately $25 billion of the total attributed to higher component prices. Microsoft 365 Copilot crossed 20 million paid commercial seats, up from 15 million in January, and AI-related annualised revenue reached $37 billion. Headcount is set to fall in fiscal 2027 as the company doubles down on data centre capacity. Microsoft also revamped its OpenAI relationship, ending revenue share payments and opening up OpenAI model access to other cloud providers, while preserving its IP licence through 2032.⁶

Amazon (AMZN)

Amazon posted its fastest AWS growth in over three years at 28%, beating expectations and reinforcing the cloud unit as the engine behind the company’s heavy AI spending. Property and equipment outlays climbed sharply, and free cash flow plunged 95% year over year as capex flows through. The company is targeting roughly $200 billion in 2026 capital spending, supported by a wave of new AI partnerships and the recently announced $11.57 billion Globalstar acquisition, which CEO Andy Jassy framed as a way to deepen Amazon’s satellite capabilities and strengthen its relationship with Apple. Amazon Leo, Amazon’s satellite internet service, is targeting commercial launch in the third quarter. Advertising revenue grew 24% and Q2 guidance came in above Wall Street estimates.⁷

Sources

Tech stocks close out best month since start of Covid pandemic in 2020[April 30, 2026]
Meta stock drops on quarterly results as ‘internet disruptions’ in Iran drag down user numbers[April 29, 2026]
Apple revenue guidance tops estimates on booming iPhone, Mac demand[April 30, 2026]
Netflix stock sinks after streamer reiterates guidance, says Reed Hastings to exit board[April 16, 2026]
Alphabet ups 2026 capex to as much as $190 billion, expects to ‘significantly increase’ in 2027[April 29, 2026]
Microsoft calls for $190 billion in 2026 capital spending on soaring memory prices[April 29, 2026]
Amazon earnings beat expectations with strong cloud growth[April 29, 2026]

Source: Getty Images Credit: Andriy Onufriyenko

Disclaimers

Published May 6, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve FANGMA Index ETF (“TECH”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

Big Tech Is Pouring Over $700 Billion into AI in 2026. Here’s What’s Fuelling the Boom.

Posted on April 17, 2026May 13, 2026 by Justin Doone

According to CNBC, the world’s largest cloud and AI infrastructure providers are on track to spend between $650 billion and $700 billion on capital expenditure in 2026, with the vast majority directed toward artificial intelligence infrastructure.¹ Gartner forecasts that worldwide AI spending across all categories will reach $2.52 trillion this year, a 44% increase over 2025.² For investors in technology-focused strategies, these figures represent one of the most significant capital deployment cycles in modern corporate history.

Where the Money Is Going

The scale of commitment from each hyperscaler is unprecedented. Yahoo Finance noted that planned capital spending for 2026 ranges from approximately $135 billion to $200 billion per company among the largest cloud providers, with Alphabet and Microsoft each committing well over $100 billion.³ Per Bloomberg, approximately 75% of this aggregate capex is directed specifically at AI-related infrastructure, translating to roughly $450 billion in AI-specific investments.⁴ This includes next-generation data centres, AI-optimised servers, custom chips, and the networking equipment needed to connect it all. The growth trajectory is remarkable. According to the IEEE Communications Society Technology Blog, combined hyperscaler capex has grown from approximately $256 billion in 2024 to $443 billion in 2025—and is now projected to surpass $600 billion in 2026, representing a 36% year-over-year increase.⁵ The sheer velocity of the ramp underscores how urgently these companies are racing to build out AI capacity.

Why AI Spending Keeps Accelerating

Several forces are sustaining this investment cycle. First, enterprise adoption of generative AI continues to broaden. Goldman Sachs notes that AI companies may invest more than $500 billion in 2026, driven by the competitive pressure to build and maintain foundational AI models while simultaneously deploying AI across enterprise applications.⁶ Second, the infrastructure requirements for training and running large language models continue to grow. Each new generation of models demands more compute power, more memory, and more energy—which translates directly into physical data centre construction and server procurement. Gartner projects that AI-optimised servers alone are expected to see spending increase by 49% in 2026, accounting for 17% of total AI spending.² Third, the competitive dynamics among the hyperscalers themselves are intensifying. None of the major players can afford to fall behind in AI capabilities, creating what some analysts have described as a capex arms race. The result is a self-reinforcing cycle: as each company announces larger budgets, its competitors feel compelled to match or exceed those commitments. Who Benefits from the AI Buildout While the hyperscalers are writing the cheques, the dollars are flowing directly into the revenues of the technology companies that supply the infrastructure. Semiconductor companies like Nvidia and Broadcom, whose chips power the bulk of AI training and inference workloads, continue to see demand that outpaces supply. Companies like ASML and Applied Materials, which produce the advanced lithography and fabrication equipment needed to manufacture those chips, sit even further upstream in the value chain. Cloud platform providers, software infrastructure companies, and cybersecurity firms are also seeing a lift as enterprises expand their AI footprints. According to MarketMinute, the technology sector is expected to see revenue growth of 22.5% in Q1 2026, compared to just 8.8% for the S&P 500 as a whole, with tech sector earnings projected to surge 27.1%.⁷ This growth, however, brings its own considerations. The concentration of market returns in a handful of technology names has intensified, with the sector now representing over 43% of the S&P 500’s total market capitalisation.⁷ For investors, this creates both opportunity and concentration risk—a dynamic that makes diversified approaches to technology exposure increasingly relevant.

Accessing NASDAQ Technology Growth with Enhanced Yield Through QQQY

For investors who want exposure to the technology companies at the centre of the AI spending boom while also seeking enhanced income, the Evolve NASDAQ Technology Enhanced Yield Index Fund (QQQY) offers a differentiated approach. QQQY tracks the Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index, providing focused exposure to technology-classified companies within the Nasdaq-100—names like Apple, Alphabet, Microsoft, Nvidia, Broadcom, and AMD that are supplying and benefitting from the AI infrastructure buildout. Unlike broader NASDAQ-100 strategies that include consumer, communications, and healthcare companies, QQQY concentrates purely on the technology sector while employing a covered call strategy designed to generate additional income from option premiums. In an environment where AI capex is fuelling strong earnings growth for technology companies, this structure seeks to capture that underlying equity exposure while adding a layer of income generation. The covered call component may be particularly relevant in periods of elevated volatility, when option premiums tend to be higher, potentially enhancing the fund’s income profile. For more information, visit https://evolveetfs.com/product/qqqy/.

Sources

CNBC, “Tech AI spending approaches $700 billion in 2026, cash taking big hit,” February 6, 2026.
Gartner, “Gartner Says Worldwide AI Spending Will Total $2.5 Trillion in 2026,” January 15, 2026.
Yahoo Finance, “Big Tech set to spend $650 billion in 2026 as AI investments soar,” February 2026.
Bloomberg, “How Much Is Big Tech Spending on AI Computing? A Staggering $650 Billion in 2026,” February 6, 2026.
IEEE ComSoc Technology Blog, “Hyperscaler capex > $600 bn in 2026 a 36% increase over 2025,” December 22, 2025.
Goldman Sachs, “Why AI Companies May Invest More than $500 Billion in 2026,” 2026.
FinancialContent, “The Great Divide: Tech Surge Masks Modest Growth for the Rest of the S&P 500 in Q1 2026,” March 26, 2026.

Disclaimers

Published April 17, 2026. Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve NASDAQ Technology Enhanced Yield Index Fund (“QQQY”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers. The information contained herein is for informational purposes only and is not intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information contained herein is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, it is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found on the Evolve Funds Group Inc website at https://evolveetfs.com/ Certain information contained herein is obtained from third parties. Evolve Funds Group Inc. believes such information to be accurate and reliable as of the date hereof, however, we cannot guarantee that it is accurate or complete or current at all times. The information provided is subject to change without notice. Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Certain statements contained herein are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

Cybersecurity Pullback Creates Opportunity as Global Threats Accelerate

Posted on April 13, 2026April 29, 2026 by Justin Doone

Cybersecurity stocks have faced significant headwinds so far in 2026, driven by a combination of AI disruption fears, rotation into AI hardware names, and broader multiple compression across high-growth software. CNBC reported that the selloff accelerated in late February after Anthropic introduced Claude Code Security, a new AI capability designed to scan codebases for vulnerabilities.¹ Markets quickly extrapolated the announcement into a broader threat to cybersecurity vendors, triggering a sharp sector-wide decline. According to GovInfoSecurity, public cybersecurity companies have largely met or exceeded earnings expectations in 2026—stock prices are falling even as fundamentals hold, raising the question of whether the market is mispricing the sector.²

The AI Disruption Narrative vs. Reality

The concern is understandable on the surface: if AI can automatically identify and patch vulnerabilities, does that undercut the business model of cybersecurity vendors? CNBC noted that the Claude Code Security tool primarily challenges specialised code-scanning platforms such as GitLab and JFrog, rather than the comprehensive cybersecurity platforms that handle endpoint protection, threat detection, and incident response.¹ The pattern is a familiar one in technology investing: an AI model demonstrates a new capability, investors panic, the sector sells off, and, as J.P. Morgan notes, fundamentals are temporarily ignored.⁶

Industry leaders have pushed back strongly against the disruption narrative. CrowdStrike CEO George Kurtz has emphasised that AI ultimately expands the need for cybersecurity rather than replacing it: as automation accelerates development and deployment cycles, the potential attack surface grows alongside it.¹ Palo Alto Networks CEO Nikesh Arora similarly questioned why the market is treating AI as a threat to the sector when the technology is simultaneously making attacks more sophisticated and harder to detect.³

Rather than retreating from AI, both companies are investing aggressively to embed it into their platforms. Palo Alto Networks completed a $25 billion acquisition of CyberArk and purchased AI observability platform Chronosphere, while CrowdStrike launched Charlotte AI AgentWorks, a no-code platform enabling customers to deploy custom AI-powered security agents at scale.^3,4,5

Real-World Threats Are Escalating, Not Retreating

While markets debate the long-term implications of AI for cybersecurity business models, real-world cyber threats are escalating at an unprecedented pace. The Middle East conflict has emerged as a powerful illustration of why cybersecurity spending is structurally non-discretionary.

Calcalist reported that following Israeli strikes on Iran in June 2025, cyberattacks targeting Israel surged 700% within 48 hours, spanning government, financial, telecommunications, and critical infrastructure targets.⁷ The situation intensified further in February 2026 when coordinated U.S.–Israeli strikes triggered a multi-vector Iranian cyber retaliation campaign. Palo Alto Networks Unit 42 reported that over 60 active hacktivist groups were observed within days, while Halcyon documented that Iranian state-aligned APT groups escalated targeting of critical infrastructure, healthcare, and telecommunications across the region and beyond.^8,9

The Center for Strategic and International Studies (CSIS) has assessed that cyber has become a distinct warfighting domain, with spillover risks extending to countries far beyond the immediate conflict zone.¹⁰ For organisations across North America, Europe, and the Asia-Pacific, the message is clear: cybersecurity budgets are not a line item that can be deferred when markets get jittery about AI.

Sentiment vs. Fundamentals: A Familiar Disconnect

Taken together, the recent cybersecurity selloff appears more reflective of near-term sentiment and valuation compression than a deterioration in fundamentals. AI is reshaping how software is built and secured, but it is simultaneously increasing the scale, speed, and sophistication of cyber threats. The escalating geopolitical cyber landscape reinforces the long-term importance of diversified cybersecurity providers capable of integrating AI directly into their platforms.

Diversified Cybersecurity Exposure Through CYBR

The recent pullback may present an attractive entry point for investors seeking exposure to a structurally growing industry. The Evolve Cyber Security Index Fund (CYBR) provides exposure across multiple leaders in endpoint protection, cloud security, and network defence, reducing single-company and concentration risk while capturing innovation across the broader ecosystem.

As volatility driven by AI headlines creates dispersion within the sector, diversified exposure can help investors participate in long-term growth while mitigating company-specific uncertainty. A broad-based approach may help investors avoid the risk of being on the wrong side of a single-name bet.

For more information, visit https://evolveetfs.com/product/cybr/.

Sources

CNBC, “Cybersecurity stocks drop after Anthropic’s AI tool raises disruption fears,” February 23, 2026.
GovInfoSecurity, “AI Disruption Fears Rattle Cybersecurity Stocks,” March 23, 2026.
CNBC, “Palo Alto Networks CEO on cybersecurity, AI, and earnings,” February 18, 2026.
OSMicro, “How Does CrowdStrike Work? Diving Into AI-Powered Threat Neutralisation,” August 22, 2025.
CrowdStrike, “CrowdStrike Falcon Platform Evolves to Lead the Agentic Security Era,” September 16, 2025.
J.P. Morgan, “TMT Update: Cybersecurity Sector Selloff and AI,” February 27, 2026.
Calcalist, “Cyberattacks on Israel surge 700% following strikes on Iran,” June 15, 2025.
Palo Alto Networks Unit 42, “Threat Brief: March 2026 Escalation of Cyber Risk Related to Iran,” March 2, 2026.
Halcyon, “Iranian Use of Cybercriminal Tactics in Destructive Cyber Attacks: 2026 Updates,” March 3, 2026.
CSIS, “How Will Cyber Warfare Shape the U.S.–Israel Conflict with Iran,” March 3, 2026.

Disclaimers

Published April 13, 2026.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Cyber Security Index Fund (“CYBR”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

‘Big Six’ Canadian Banks Year-End Earnings Roundup

Posted on December 16, 2025January 20, 2026 by Janice Leung

In the first week of December 2025, Canada’s Big Six banks wrapped up their fiscal year with results for the quarter ended October 31.After a volatile yet rewarding year in financial markets, analysts expected strong earnings across the group despite pressure from the U.S. trade war and softer consumer borrowing, along with higher provisions for credit losses and rising fee-based income. Below is a high level look at how each of the big banks performed in the fourth quarter.

Portfolio Holdings

Royal Bank of Canada (RY)

EPS: $3.85 reported vs analysts estimate of $3.55

RBC delivered a strong finish to the year, with fourth quarter profit rising 29% to $5.4 billion, driven by solid momentum in capital markets and wealth management. Adjusted earnings of $3.85 per share exceeded the $3.55 analysts expected, and the bank boosted its quarterly dividend by 10 cents to $1.64. RBC also raised its return on equity target to 17% or more after surpassing its prior 16% goal. Revenue climbed 14% to $17.2 billion, while expenses increased 4% to $9.4 billion. Provisions for credit losses rose to $1 billion, including $984 million set aside for loans that may not be repaid, compared with $640 million a year earlier.

Toronto-Dominion Bank/The (TD)

EPS: $2.18 reported vs analysts estimate of $2.01

TD delivered a mixed but resilient fourth quarter, posting earnings that surpassed expectations as capital markets activity improved and the bank continued reshaping its U.S. operations. Profit fell 10% to $3.3 billion, although adjusted earnings rose 22% to $2.18 per share, ahead of the $2.01 analysts expected. TD raised its quarterly dividend to $1.08 from $1.05. The bank also hit its 10% asset reduction goal in the U.S., bringing total assets to US$382 billion, comfortably below the US$434 billion regulatory cap. TD recorded a $190 million restructuring charge, with another $125 million expected in early 2026, tied to cost cutting and anti money laundering remediation. Expenses climbed 9% to $8.8 billion, driven by higher employee related costs and governance and control investments.

Bank of Montreal (BMO)

EPS: $3.28 reported vs analysts estimate of $3.03

BMO delivered a solid fourth quarter, with profit beating expectations and a dividend increase underscoring management’s confidence. Reported profit was $2.3 billion, roughly in line with last year, when results were boosted by a legal provision reversal, while earnings edged up. On an adjusted basis, profit surged 63% to $2.51 billion, and adjusted earnings of $3.28 per share comfortably topped the $3.03 consensus. BMO raised its quarterly dividend by 4 cents to $1.67 per share. Credit quality trends improved, with provisions for credit losses dropping to $755 million from $1.52 billion, including $750 million on past due loans and only $5 million on loans still being repaid. In the United States, loan balances declined 2% and deposits fell 5% as BMO continued to reshape its portfolio.

Bank of Nova Scotia/The (BNS)

EPS: $1.93 reported vs analysts estimate of $1.84

Scotiabank closed the year on a strong note, reporting higher fourth quarter profit that beat expectations as capital markets and wealth management activity accelerated, helping offset a restructuring charge. Profit rose to $2.2 billion, compared with $1.69 billion a year earlier. Adjusted earnings of $1.93 per share topped the $1.84 analysts expected. Scotiabank held its quarterly dividend steady at $1.10. Provisions for credit losses increased to $1.1 billion, including $71 million on loans still being repaid, compared with $1.03 billion in the same quarter last year. Revenue climbed 15% to $9.8 billion, while expenses rose 10% to $5.8 billion, driven by higher personnel costs, technology spending and business development initiatives.

Canadian Imperial Bank of Commerce (CM)

EPS: $2.21 reported vs analysts estimate of $2.08

CIBC delivered a strong fourth quarter, with profit climbing 16% to $2.2 billion, supported by rising demand in capital markets and its U.S. commercial and wealth units. Adjusted earnings of $2.21 per share topped the $2.08 analysts expected, and the bank lifted its quarterly dividend by 10 cents to $1.07. Revenue rose 14% to $7.6 billion, while expenses increased 10% to $4.2 billion, driven by higher employee related costs, technology and investment spending. Provisions for credit losses totaled $605 million, up 44% from last year, including $497 million on loans still being repaid, as CIBC saw an uptick in impaired loans across most businesses except U.S. commercial banking and wealth management.

National Bank of Canada (NA)

EPS: $2.82 reported vs analysts estimate of $2.62

National Bank delivered a strong fourth quarter, with profit rising 11% to $1.1 billion, as capital markets and wealth management earnings surged. Adjusted earnings of $2.82 per share exceeded the $2.62 analysts expected, and the bank raised its quarterly dividend by 6 cents to $1.24. The quarter also included acquisition and integration costs tied to its takeover of Canadian Western Bank. National announced plans to acquire Laurentian Bank’s retail, SME and syndicated loan portfolios, while Fairstone Bank will purchase all Laurentian common shares at $40.50 per share. Provisions for credit losses increased to $244 million, including $211 million on loans that may not be repaid, up from $162 million last year. Revenue climbed 26% to $3.7 billion, while expenses rose 31% to $2.1 billion, driven by CWB integration and higher compensation costs.

Source:

Marotta, S., “CIBC, TD Bank, BMO, RBC, National Bank and Scotiabank: A breakdown of the big banks’ year-end earnings,” The Globe and Mail, December 3, 2025; https://www.theglobeandmail.com/business/article-canada-banks-earnings-fourth-quarter-2025/

Credit: Yana Bukharova Source: Getty Images

DISCLAIMER

Published December 16, 2025.

Leverage increases risk.

Q3 2025 Roundup for Evolve US Banks Enhanced Yield Fund

Posted on October 22, 2025October 22, 2025 by Janice Leung

America’s biggest banks kicked off earnings season with a show of strength, powered by a surge in dealmaking, market volatility, and resilient economic undercurrents. From JPMorgan’s record trading haul to Bank of America’s booming loan book, Wall Street’s heavyweights are cashing in on the revival of investment banking and elevated trading activity. A rebound in M&A and IPO pipelines, combined with steady consumer balance sheets, pushed profits sharply higher across the board. Even as CEOs struck a cautious tone on inflation and global uncertainty, most signaled growing optimism about the U.S. economy’s staying power. Wells Fargo is entering a new era of expansion post–asset cap, while Goldman Sachs and Citi rode waves of corporate activity to standout quarters.

Top 5 Portfolio Holdings*

JPMorgan Chase & Co (JPM)

Portfolio weight* in Evolve US Banks Enhanced Yield Fund: 5.42%

EPS: $5.07 reported vs Bloomberg estimate of $4.84
Revenue: $47.12B reported vs Bloomberg estimate of $45.4B

JPMorgan Chase kicked off bank earnings season with a blockbuster quarter, comfortably topping Wall Street expectations. The banking giant reported earnings of $5.07 per share on $47.12 billion in revenue, both ahead of forecasts. Profit soared 12% to $14.39 billion, fueled by surging trading and investment banking activity that together added about $700 million more revenue than expected. Fixed income trading jumped 21% to $5.6 billion, while equities trading surged 33% to $3.3 billion, both smashing estimates. Investment banking fees climbed 16% to $2.6 billion as deal-making momentum returned. CEO Jamie Dimon credited a “resilient” U.S. economy but warned of ongoing risks from inflation, tariffs, and global uncertainty. JPMorgan’s record $8.9 billion trading haul marked its best third quarter ever, underscoring how market volatility and pro-business policy tailwinds have boosted big banks’ bottom lines. The bank also increased provisions for credit losses, signaling caution ahead.¹

Bank of America Corp (BAC)

Portfolio weight* in Evolve US Banks Enhanced Yield Fund: 5.36%

EPS: $1.06 reported vs Bloomberg estimate of $0.95
Revenue: $28.24B reported vs Bloomberg estimate of $27.5B

Bank of America delivered a strong third quarter, easily topping expectations thanks to a surge in investment banking and solid trading gains. The bank reported earnings of $1.06 per share on $28.24 billion in revenue, beating estimates across the board. Profit jumped 23% to $8.5 billion, while revenue climbed nearly 10.8% year over year. Investment banking was the star of the show, with fees soaring 43% to $2 billion, well ahead of forecasts as corporate dealmaking and capital raising picked up. Equities trading rose 14% to $2.3 billion, while fixed income trading gained 5% to $3.1 billion. Net interest income hit a record $15.39 billion, boosted by steady loan and deposit growth. CEO Brian Moynihan highlighted strong performance across all business lines, emphasizing the bank’s “organic growth and effective balance sheet positioning.”²

Wells Fargo & Co (WFC)

Portfolio weight* in Evolve US Banks Enhanced Yield: 5.39%

EPS: $1.66 reported vs Bloomberg estimate of $1.55
Revenue: $21.44B reported vs Bloomberg estimate of $21.16B

Wells Fargo delivered one of its strongest quarters in years, beating estimates and signaling a new era of growth after the U.S. Federal Reserve lifted its seven-year, $1.95 trillion asset cap. The bank reported earnings of $1.66 per share on $5.59 billion in profit, topping expectations and sending shares up 7.6%. With the cap finally gone, CEO Charlie Scharf raised the bank’s profitability target to a 17–18% ROTCE, up from 15%, and outlined ambitions to become a top-tier player across consumer banking, wealth management, and investment banking. Wells Fargo’s total assets surged past $2 trillion for the first time, fueled by the strongest loan growth in over three years. Credit quality remained robust, with provisions for loan losses dropping to $681 million. Investment banking revenue jumped 25% to a record $840 million, helped by a flurry of major M&A activity, including advising Union Pacific’s $85 billion deal for Norfolk Southern.³

Goldman Sachs Group Inc (GS)

Portfolio weight* in Evolve US Banks Enhanced Yield Fund: 5.34%

EPS: $12.25 reported vs Bloomberg estimate of $11
Revenue: $15.18B reported vs Bloomberg estimate of $14.1B

Goldman Sachs delivered a powerful third-quarter performance, crushing expectations on the back of booming investment banking and fixed income trading. The Wall Street powerhouse reported earnings of $12.25 per share on $15.18 billion in revenue, beating forecasts and marking profit growth of 37% year over year. Investment banking was the standout, with fees soaring 42% to $2.66 billion amid a flurry of M&A and debt underwriting activity. Fixed income trading jumped 17% to $3.47 billion, driven by strength in rates, mortgages, and commodities, while equities trading rose a modest 7% to $3.74 billion, slightly below estimates. CEO David Solomon highlighted the bank’s success navigating volatile markets shaped by global tariffs and renewed dealmaking momentum. Goldman also announced the acquisition of Industry Ventures, a $7 billion venture capital firm, to expand its asset management arm.⁴

Citigroup Inc (C)

Portfolio weight* in Evolve US Banks Enhanced Yield Fund: 5.38%

EPS: $2.24 reported vs Bloomberg estimate of $1.90
Revenue: $22.09B reported vs Bloomberg estimate of $21.09B

Citigroup delivered a blockbuster third quarter, beating expectations across the board as every division posted record revenue. The bank reported adjusted earnings of $2.24 per share on $22.09 billion in revenue, topping forecasts and sending shares up over 4%. Net income climbed 15% to $3.8 billion, driven by broad-based strength across its businesses: banking revenue surged 34%, markets revenue rose 15%, and services achieved its best quarter ever with a 7% gain. CEO Jane Fraser credited “investments in new products, digital assets, and AI” for fueling innovation and operational efficiency, adding that Citi’s ongoing strategic overhaul is paying off. The bank also moved forward with the sale of a 25% stake in its Banamex Mexico business ahead of an IPO, a step that temporarily boosted expenses but supports its simplification strategy.⁵

*Portfolio weights as at September 30, 2025. Top 5 portfolio holdings sorted by Market Capitalization.

Source: Getty Images Credit: peshkov

Sources:

https://www.cnbc.com/2025/10/14/jpmorgan-chase-jpm-earnings-q3-2025.html (October 14, 2025)
https://www.cnbc.com/2025/10/15/bank-of-america-bac-earnings-q3-2025.html (October 15, 2025)
https://www.cnbc.com/2025/10/14/wells-fargo-earnings-q3-2025.html (October 14, 2025)
https://www.cnbc.com/2025/10/14/goldman-sachs-gs-earnings-q3-2025.html (October 14, 2025)
https://www.cnbc.com/2025/10/14/citigroup-earnings-q3-2025.html (October 14, 2025)

DISCLAIMER

Published October 22, 2025.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve US Banks Enhanced Yield Fund (“CALL”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

Income Strategies for Canadian Investors: Building Beyond Bonds with ETFs

Posted on October 20, 2025October 21, 2025 by Janice Leung

When your inbox is full of low-rate bank notices and the yield on cash looks deficient, building reliable income takes a bit more than buying the first bond you see.

For decades, Canadian investors looking for income leaned heavily on bonds. But 2025’s market backdrop—volatile rates, persistent inflation, and uneven yields—has challenged the traditional “set it and forget it” approach of bonds.

Bond prices move inversely to interest rates, so relying solely on longer-duration fixed income investments like bonds means that in a rising-rate environment they can suffer steep losses. But that doesn’t mean bonds are obsolete as part of a balanced portfolio. Instead, it means income investing now calls for a broader toolkit.

Exchange-traded funds (ETFs) have broadened access to dividend investing, covered call strategies, and fixed income investments in ways tailored to today’s environment. Indeed, there has been a growing demand for shorter or mid-duration bond ETFs as rate volatility shapes investor behaviour.¹

Used together fixed income, and covered call funds offer flexible ETF income strategies that can power both passive income strategies and retirement income strategies. So, think of your portfolio like a toolkit, and use the right tool for the right job.

Fixed Income ETFs: More Flexibility

The next tool to consider is fixed income ETFs.

Fixed income investments—ones that offer predictable, regular payments (interest or dividends) over a set period of time—are still foundational to an income portfolio.³

Instead of locking into long-term government bonds, many investors are turning to ETFs with shorter to mid-term maturities. Evolve’s Enhanced Yield Mid Term Bond Fund (MIDB), launched in April 2025, was created for just this purpose. It seeks to generate an attractive monthly income while managing the risks associated with interest rate fluctuations. Another option is the Canadian Aggregate Bond Enhanced Yield Fund (AGG), which focuses on Canadian bonds and combines a traditional bond portfolio with a covered call overlay to enhance distributions. These kinds of products are particularly well suited to inclusion in RRSPs, where the interest income can grow tax-deferred.

Covered Call ETFs: Turning Volatility into Income

Beyond dividends and traditional bonds, covered call ETFs add another tool to your toolbox.

A covered call strategy involves selling call options on existing holdings to generate premium income. While this caps upside potential in strong equity rallies, it can materially boost the regular cash flow investors receive.⁴

Evolve has integrated this strategy across multiple funds. AGG, for instance, doesn’t just provide bond exposure; it also writes call options to deliver enhanced yield.

On the equity side, covered call ETFs provide access to stocks while turning equity exposure into a steady stream of distributions. For investors who prioritize passive income strategies over maximum growth, these structures can play an important role. Evolve’s Canadian Equity UltraYield ETF (CANY) is one such example. CANY uses a covered call strategy to offer investors modestly levered exposure (1.33x) to a portfolio of leading Canadian equity securities that have the potential to generate significant option premiums.*

Covered call ETFs often make the most sense in non-registered accounts, where dividends can benefit from the dividend tax credit and capital gains treatment, though investors should remain mindful of the trade-offs.

Building a Resilient Income Toolkit with ETFs

For Canadian DIY investors, building a modern income toolkit means layering strategies through ETFs. Evolve ETFs offers several funds that fit neatly into this framework.

Evolve Enhanced Yield Mid Term Bond Fund (MIDB) seeks to provide investors with attractive monthly income and long-term capital appreciation by targeting a medium-duration fixed income portfolio by investing primarily in fixed income ETFs or fixed income securities issued in either the United States or Canada with an added active covered call strategy.

Evolve Canadian Aggregate Bond Enhanced Yield Fund (AGG ETF) offers diversified exposure to the Canadian bond market, with the added benefit of tax-efficient, enhanced income. AGG seeks to provide investors with attractive monthly income and long-term capital appreciation by investing primarily in fixed-income ETFs or fixed-income securities primarily issued in Canada. To enhance yield, as well as to mitigate risk and reduce volatility, AGG will employ a covered call option.

Evolve Canadian Equity UltraYield ETF (CANY) aims to offer investors modestly levered exposure (1.33x) to a portfolio of leading Canadian equity securities that have the potential to generate significant option premiums.* CANY will employ a covered call option, the level of which may vary based on market volatility and other factors.

For more information on these or any of our other ETF products, visit our website.

To stay updated with insights on investing and investment products, sign up for our weekly newsletter here.

Source: Getty Images Credit: Krongkaew

ENDNOTES

Ziafati, N., “New fixed-income ETFs aim to capitalize on lower interest rate environment,” Investment Executive, October 18, 2024; https://www.investmentexecutive.com/news/products/new-fixed-income-etfs-aim-to-capitalize-on-lower-interest-rate-environment/
“What is Dividend Investing and What are Qualified Dividends?,” Equifax, August 27, 2024; https://www.equifax.com/personal/education/personal-finance/articles/-/learn/dividend-investing/
Loveland, M., “Fixed-Income Investments,” Business Insider, July 18, 2024; https://www.businessinsider.com/personal-finance/investing/what-is-fixed-income-investing
Ganti, A., “Covered Calls: How They Work and How to Use Them in Investing,” Investopedia, June 04, 2025; https://www.investopedia.com/terms/c/coveredcall.asp
“The Tax-Free Savings Account (TFSA),” Canada Revenue Agency, July 7, 2025; https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account.html
“Registered Retirement Savings Plan (RRSP),” Canada Revenue Agency, February 1, 2025; https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/registered-retirement-savings-plan-rrsp.html

DISCLAIMER

Published October 20, 2025.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. All funds described herein is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

*Leverage increases risk.

CANY ETF: A New Income Strategy for Canadian Investors

Posted on September 18, 2025October 2, 2025 by Janice Leung

Introducing CANY: Evolve Canadian Equity UltraYield ETF

In Canada, investor demand for ETF-based income solutions is broad, with the ETF market expanding rapidly in recent years as investors hunt for yield and diversification.³ And that’s why we’re excited about the Evolve Canadian Equity UltraYield ETF (CANY). It bridges the needs of investors for equity exposure, growth, and income.

CANY is designed to give investors “modestly” levered exposure of 1.33x to an equal-weighted portfolio of leading Canadian equities while using a covered-call program to enhance yield.⁴

CANY aims to combine Canadian equity exposure for long-term capital appreciation with an ETF income strategy that can sit alongside more traditional fixed income investments or dividend-focused holdings in an income-oriented portfolio.

How the covered-call strategy generates income

A covered-call strategy works by owning the underlying shares and writing (selling) call options on those holdings. The option buyer pays a premium, and that premium is a source of cash for the fund that is distributed to investors.⁵ That premium income can boost yield and provide a small cushion against downside, though it also caps upside when markets rally. CANY will write calls on around 50% of the portfolio.

In the case of CANY’s “modest” leverage of 1.33x, it means the fund is designed to boost income and potential returns modestly. The leverage allows CANY to write more calls, and in turn, generate more option income.

Distribution frequency and investor use cases

By pairing the income-generation of a covered-call strategy with twice-monthly distributions, the fund aims to provide investors with a steadier and more predictable cash flow. This payment cadence can suit investors seeking frequent cash, whether as retirement income strategies, supplemental household cash flow, or regular passive income.

Be a canny investor with the CANY ETF

Discover how Canadian investors can tap into Canada’s leading companies while generating enhanced income through a covered call strategy, modest leverage, and twice-monthly distributions.

The Evolve Canadian Equity UltraYield ETF (CANY) aims to offer investors modestly levered exposure (1.33x) to a portfolio of leading Canadian equity securities that have the potential to generate significant option premiums.

For more information on this fund, visit evolveetfs.com/cany/.

To stay updated with insights on investing and investment products, sign up for our weekly newsletter here.

ENDNOTES

Murugaboopathy, P., “U.S. covered call funds attract record inflows as investors seek yield,” Reuters, July 29, 2025; https://www.reuters.com/markets/wealth/us-covered-call-funds-attract-record-inflows-investors-seek-yield-2025-07-29/
Sotiroff, D. & Hampton, I., “Covered-call ETFs are booming; note trade-offs and yield quality,” Morningstar, July 25, 2025; https://www.morningstar.com/funds/covered-call-etfs-are-booming-not-all-yield-is-good
Derk, C., Pereira, G., Wakeling, W., Yeretsian, C. & Viswanathan, A., “35 years of ETFs: The evolution of a Canadian innovation,” BLG, March 27, 2025; https://www.blg.com/en/insights/2025/03/35-years-of-etfs-the-evolution-of-a-canadian-innovation
“Evolve Canadian Equity UltraYield ETF Expected to Begin Trading on September 18,” Evolve ETFs, September 15, 2025; https://evolveetfs.com/2025/09/evolve-canadian-equity-ultrayield-etf-expected-to-begin-trading-on-september-18-2025/
Ganti, A., “Covered Calls: How They Work and How to Use Them in Investing,” Investopedia, June 04, 2025; https://www.investopedia.com/terms/c/coveredcall.asp
Thune, K., “What Is a Covered Call ETF?,” ETF.com, March 15 2023.; https://www.etf.com/sections/etf-basics/what-covered-call-etf
“Are Triple Leveraged ETFs a Good Idea?,” Investopedia, February 06, 2024; https://www.investopedia.com/stock-analysis/2012/are-triple-leveraged-etfs-a-good-idea-fas-faz-tyh-typ0430.aspx

Source: Getty Images Credit: Javier Ghersi

DISCLAIMER

Published September 18, 2025.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Canadian Equity UltraYield ETF (“CANY”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

Leverage increases risk.

Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated.

Investing in US Equities with UltraYield: Introducing BIGY

Posted on September 10, 2025October 2, 2025 by Janice Leung

For many Canadian investors, the problem is simple: you want meaningful exposure to the world’s biggest companies—mainly listed in the U.S.—but you also need regular income to pay bills, balance your portfolio, or build savings for retirement. That combination of demands (growth plus dependable cash flow) is exactly what has pushed interest toward ETFs that pair equity exposure with income-enhancing strategies. In the first half of this year alone, U.S. funds using covered call strategies have attracted a record $31.5 billion in investments.¹

This surge has benefitted options-based and covered-call ETFs, which generate premiums from selling call options on underlying stocks and turn those premiums into distributed cash. The trend is significant: options-based/covered-call funds have seen record inflows and growing product innovation in recent years. This allows investors to keep equity exposure for long-term appreciation while adding a meaningful income stream.

Introducing BIGY: US Equities with UltraYield^TM

This desire for growth plus dependable cash flow is why Evolve created the new Evolve US Equity UltraYield ETF (BIGY). This fund is built to answer these investors’ needs. BIGY offers a modestly 1.33x levered exposure to an equal-weighted portfolio of leading U.S. companies, uses an active covered-call program to enhance yield, and pays distributions twice per month.²

How covered calls work

A covered-call approach, like BIGY uses, means the fund owns shares (in this case, in a portfolio of leading U.S. companies) and writes call options against those holdings, collecting option premiums that are distributed as income to investors in the fund. That premium can reduce downside volatility and boost yield.³

In the case of BIGY’s modest leverage of 1.33x, it means the fund is designed to boost income and potential returns compared with an unlevered covered-call fund. Leverage, after all, raises the fund’s sensitivity to market moves.

Distributions Twice Per Month with BIGY

We’ve combined this moderated risk of a covered call strategy with a distribution twice per month for investors. Whether it’s a payout for retirees, cash to fund living expenses, or money you can use to continue building your portfolio, twice-monthly distribution can work better for some investors than less frequent payouts.

For Canadian investors with a home-bias tilt to their portfolio, BIGY can serve to keep meaningful exposure to U.S. leaders in a portfolio that can complement domestic holdings, while offering premium income.

Think big. Invest BIGY.

Discover how Canadian investors can tap into leading U.S. companies while generating enhanced income through a covered call strategy, modest leverage, and distributions twice per month.

The Evolve US Equity UltraYield ETF (BIGY) aims to offer investors modestly levered exposure (1.33x) to a portfolio of leading U.S. companies that have the potential to generate significant option premiums. BIGY will employ a covered call overlay, the level of which may vary based on market volatility and other factors.

For more information on this fund, visit https://evolveetfs.com/product/bigy/.

To stay updated with insights on investing and investment products, sign up for our weekly newsletter here.

ENDNOTES

1. Murugaboopathy, P., “U.S. covered call funds attract record inflows as investors seek yield,” Reuters, July 29, 2025; https://www.reuters.com/markets/wealth/us-covered-call-funds-attract-record-inflows-investors-seek-yield-2025-07-29/
2. “Evolve Plans to Launch the Evolve US Equity UltraYield ETF,” Evolve ETFs, August 21, 2025; https://evolveetfs.com/2025/08/evolve-plans-to-launch-the-evolve-us-equity-ultrayield-etf/
3. Ganti, A., “Covered Calls: How They Work and How to Use Them in Investing,” Investopedia, June 04, 2025; https://www.investopedia.com/terms/c/coveredcall.asp

Source: Getty Images Credit: Javier Ghersi

DISCLAIMER
Published September 10, 2025.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve US Equity UltraYield ETF (“BIGY”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

Leverage increases risk.

Inside the Global Healthcare Landscape

Posted on July 2, 2025July 11, 2025 by Janice Leung

A Resilient and Evolving Sector Amid Political Shifts

The healthcare sector is navigating a dynamic political landscape, most notably under US President Trump’s administration. His sweeping changes—such as halting vaccine guidance, defunding Moderna’s bird flu program, and removing the CDC’s vaccine advisory panel—have certainly impacted vaccine-centric names like Pfizer, Moderna, and Novavax. However, the broader sector has proven resilient. Healthcare’s diversification, spanning pharmaceuticals, diagnostics, and medical technology, provides insulation from policy shocks. In fact, some investors view the pivot toward preventive care, environmental health, and regulatory reform as a catalyst for long-term innovation across the industry.

Tariff Risks Managed Through Domestic Investment

While broader trade tensions remain on the radar, the healthcare sector appears far less vulnerable than others. Tariff threats on drug imports, which account for over $200 billion annually, are being closely watched. Yet, unlike industries such as airlines, major pharmaceutical firms have voiced confidence during earnings calls, emphasizing limited tariff impact. This confidence is backed by substantial commitments to U.S.-based manufacturing. Companies like Abbott, Merck, J&J, Sanofi, and Roche have announced investments ranging from hundreds of millions to tens of billions to expand domestic operations—bolstering supply chain resilience and potentially qualifying for tariff exemptions.

Healthcare’s Long-Term Growth Story Remains Intact

Healthcare’s appeal as a defensive sector remains strong. The day after Liberation Day, the S&P Healthcare sector fell just 0.79%—a fraction of the S&P 500’s 4.83% decline¹—highlighting its role as a defensive sector. Structural tailwinds further strengthen the case: an aging global population, rising middle-class demand for quality care, and breakthroughs in obesity and metabolic treatments are propelling steady revenue growth. Blockbuster drugs like Ozempic and Zepbound are expanding their addressable markets, moving from diabetes into cardiovascular disease and weight management.

Innovation Driving the Future of Healthcare

Innovation is another key tailwind. Artificial intelligence is reshaping drug development by accelerating R&D timelines, improving clinical trial precision, and enabling personalized medicine. Meanwhile, advances in medical devices—from surgical robotics to smart implants—are enhancing outcomes and broadening access to minimally invasive care. These themes support a long runway for growth across sub-sectors of healthcare.

Evolve Global Healthcare Enhanced Yield Fund (TSX: LIFE)

For investors looking to participate in this resilient and forward-looking sector, LIFE offers a compelling opportunity. Its covered call strategy provides exposure to healthcare giants while generating income and smoothing volatility—especially valuable in uncertain macro environments. With strong fundamentals, ongoing innovation, and reduced sensitivity to political noise compared to other sectors, healthcare continues to offer an attractive mix of stability and opportunity.

¹Source: Bloomberg, as at June 18, 2025.

Source: Getty Images Credit: Issarawat Tattong

DISCLAIMER

Published July 2, 2025.

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. The Evolve Global Healthcare Enhanced Yield Fund (“LIFE”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. Please read the prospectus before investing.

How Solana Is Redefining Digital Finance and Powering the Next Wave of DeFi

Posted on April 14, 2025May 14, 2025 by Janice Leung

The blockchain landscape has undergone dramatic growth over the past decade, evolving from a niche technology to a driving force in the new digital economy. Ethereum, once the unrivalled leader in decentralized blockchain applications, is now facing serious competition from a host of new platforms—most notably, Solana.

Launched publicly in 2020 and known for its lightning-fast transaction speeds and minimal fees, Solana has quickly attracted developers, investors, and crypto enthusiasts alike. But what sets Solana apart from its rivals, and why are industry players betting its future is bright?

In this post, we’ll dive deep into Solana’s revolutionary technology, its growing ecosystem, the power of the SOL coin, and why Solana’s unique approach to scalability may just pave the way for the next era of blockchain innovation.

What is Solana?

Solana is an open-source Layer-1 blockchain designed to allow for the building of scalable crypto apps that overcome hurdles of speed, scalability, and high transaction costs faced by other blockchain technologies. Uniquely, Solana marries a conventional Proof-of-Stake model with an innovative Proof-of-History mechanism—a system that timestamps transactions and drastically reduces the communication overhead among nodes.¹

This hybrid approach empowers Solana to process more than 50,000 transactions per second. Such speeds not only mitigate network congestion but also keep fees exceptionally low. Its native token, SOL, is integral to the ecosystem, facilitating everything from transaction settlements and smart contract execution to staking rewards that secure the network.²

Given its unique architecture, Solana lays the groundwork for supporting a wide array of decentralized applications, from DeFi platforms and NFT marketplaces to a fully decentralized internet without the hassle of network congestion or high transaction costs.

How Solana Works

At the heart of Solana’s speed lies its innovative hybrid architecture, combining traditional Proof of Stake (PoS) with a pioneering Proof of History (PoH).

It is this PoH mechanism that introduces a cryptographic element to Solana by pre-timestamping transactions, creating a verifiable record (essentially a decentralized clock) that significantly reduces the communication needed amongst validators. This pre-timestamping accelerates transaction processing and slashes the computational load typically associated with blockchain networks.³

Beyond PoH, Solana incorporates a range of other technical innovations that foster high performance. Sealevel, for instance, enables parallel transaction processing of smart contracts, optimizing resources and minimizing bottlenecks.⁴ Gulf Stream further improves scalability by forwarding transactions to validators ahead of time, reducing block confirmation delays.⁵ Meanwhile, the Turbine protocol enhances block propagation by breaking data into smaller pieces, while Cloudbreak scales data storage horizontally, maintaining the architecture’s speed under heavy usage.⁶,⁷

Together, these innovations form a cohesive ecosystem that facilitates ultra-low fees and near-instant transaction completion, all without compromising security.

Integration of the SOL Coin

Serving as the primary vehicle for transaction fees, staking, and smart contract execution, SOL—the native token of the Solana protocol—is integral to maintaining the network’s rapid throughput and security. In practical terms, every transaction, every decentralized application, and every smart contract on Solana hinges on the utility of SOL, ensuring that its demand is intrinsically tied to the network’s growth.⁸

SOL illustrates the speculative fervour often seen in emerging blockchain assets. Despite periods of correction, however, for the discerning investor, SOL represents an intriguing investment opportunity: as both a transactional token that underpins an innovative technology and as a tradable asset with potential for long-term appreciation.⁹

Use Cases and Applications

Solana’s use cases have already sparked real-world applications that are reshaping the blockchain ecosystem.

The network’s scalability and cost-efficiency have made it a popular platform for decentralized finance (DeFi), enabling the creation of financial services that bypass traditional intermediaries. Lending, borrowing, and decentralized exchanges (DEXs) such as Serum and Raydium leverage Solana’s speed and cost-savings versus services built on Ethereum.

Beyond finance, Solana is a key enabler of non-fungible tokens (NFTs), driving digital art, collectibles, and gaming assets. Marketplaces like Magic Eden have attracted significant attention by offering creators and collectors a platform that supports fast NFT minting and low fees. This utility has positioned Solana as a formidable player in the NFT space, with growing adoption from top-tier projects and artists.¹⁰

In addition, Solana offers a robust foundation for developers building decentralized applications (dApps), from games to social platforms, harnessing the network’s ability to scale without succumbing to the congestion that often undermines competitors. This has allowed Web3 apps to flourish in environments traditionally plagued by slow speeds and high costs. Moreover, Solana’s architecture is increasingly recognized as the backbone of Web3—a decentralized internet where user control and direct peer-to-peer interactions replace conventional centralized intermediaries.¹¹

Having captured the attention of both retail investors and institutional players, Solana’s energy efficiency and its strategic role in shaping Web3 positions Solana as a foundation for a new generation of decentralized applications and makes Solana stand out as a critical asset in the future of blockchain innovation. As the new digital economy continues its rapid evolution, investors and developers alike are taking note—Solana isn’t merely riding the wave of blockchain innovation; it’s actively shaping its future.

ENDNOTES

Date of first publishing: April 14, 2025.

“What is cryptocurrency Solana (SOL) and how does it work?,” Kriptomat, n.d,; https://kriptomat.io/cryptocurrency-prices/solana-sol-price/what-is/
“What is Solana? A Beginner’s Guide,” Caleb & Brown, October 29, 2023; https://calebandbrown.com/blog/what-is-solana/
“What Is Solana And How Does It Work?,” Coinsmart, n.d.; https://www.coinsmart.com/blog/what-is-solana-and-how-does-it-work/
Yakovenko, A., “Sealevel — Parallel Processing Thousands of Smart Contracts,” Medium, September 9, 2019; https://medium.com/solana-labs/sealevel-parallel-processing-thousands-of-smart-contracts-d814b378192
“Gulf Stream: Solana’s Mempool-less Transaction Forwarding Protocol,” Solana Foundation, June 19, 2019; https://solana.com/news/gulf-stream–solana-s-mempool-less-transaction-forwarding-protocol
Chern, R., “Turbine: Block Propagation on Solana,” Helius, October 24, 2023; https://www.helius.dev/blog/turbine-block-propagation-on-solana
Idobo, C., “Cloudbreak: A Critical Look at Solana’s Game Changing Database Solution,” Medium, February 23, 2024; https://medium.com/@cattyidobo/cloudbreak-a-critical-look-at-solanas-game-changing-database-solution-d55141249188
“What is cryptocurrency Solana (SOL) and how does it work?,” Kriptomat, n.d,; https://kriptomat.io/cryptocurrency-prices/solana-sol-price/what-is/#What_Gives_Solana_Value
“What Is Solana And How Does It Work?,” Coinsmart, n.d.; https://www.coinsmart.com/blog/what-is-solana-and-how-does-it-work/
“What is Solana? A trader’s guide,” Capital.com, n.d.; https://capital.com/en-eu/learn/market-guides/trade-solana
“Solana in Web3: Building the Backbone of the Next Internet,” Newswatch, December 12, 2024; https://newswatchtv.com/2024/12/25/solana-in-web3-building-the-backbone-of-the-next-internet/

Source: Getty Images Credit: Dennis Diatel Photography

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. Evolve Solana ETF (“SOLA) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Certain information contained in this document is obtained from third parties. Evolve Funds Group Inc. believes such information to be accurate and reliable as of the date hereof, however, we cannot guarantee that it is accurate or complete or current at all times. The information provided is subject to change without notice.

Why Investors Are Turning to Cash Amid Tariffs and Market Volatility

Posted on March 18, 2025April 9, 2025 by Janice Leung

Why Investors Are Turning to Cash Amid Tariffs and Market Volatility

In recent months, market volatility across U.S. and Canadian equities has intensified, prompting many seasoned investors to reexamine their approach amid growing uncertainty. The potential imposition of new tariffs has added another layer of complexity and spurred concerns about trade disruptions and their knock-on effects for global equity markets.^1,2,3

Against this backdrop, a cautious approach to portfolio management is gaining traction. Many investors are looking to de-risk their portfolios by turning to more conservative vehicles, such as high-yield savings account ETFs and money market ETFs. These instruments, which offer relatively stable returns, present an attractive alternative for those seeking to preserve capital while generating income.

Join us as we delve into why shifting a portion of your portfolio to these lower-risk options may not only be prudent but also strategically sound in the face of uncertainty. By prioritizing capital preservation over high-risk returns, you can better navigate elevated volatility in equities.

Why Investors Look for Low-Risk Investments in Volatile Times

When faced with volatile market conditions, is it any surprise that investors naturally gravitate toward strategies that minimize risk and protect capital? When the potential for large market swings increases, the prospect of holding volatile equities becomes less attractive, and investors seek to balance the possibility of higher returns with the reality of higher uncertainty.

Something like the imposition of tariffs can spark a broader shift in market sentiment—a phenomenon known as a “risk-off.” When markets are “risk-off,” investors move from risky assets (like stocks) and into safe haven holdings, making traditionally lower-yielding, more stable, low-risk alternatives like high-yield savings accounts and cash-like instruments more attractive.⁴

This de-risking cushions portfolios against unexpected downturns. It is not a retreat from the market, but rather a calculated move to preserve capital and maintain liquidity during turbulent times. It comes down to a fundamental principle of risk management: when the future is uncertain, secure gains rather than chase higher returns at the expense of stability.

ETFs and Low-Risk Investment Options

One way that investors can de-risk their portfolio is by turning to cash-like instruments such as high-yield savings account ETFs and money market ETFs, which offer modest yet predictable returns.⁵ These instruments provide a safeguard against market volatility, ensuring that a portion of the investor’s portfolio remains resilient even when broader market conditions deteriorate.

ETFs (Exchange-Traded Funds) have emerged as a favoured vehicle for investors seeking both diversification and liquidity. Unlike traditional mutual funds, ETFs trade on stock exchanges, allowing for real-time pricing and the flexibility of stock-like transactions. For those aiming to reduce exposure to market volatility, ETFs that focus on low-risk, cash-equivalent assets present an appealing alternative.

High-yield savings account ETFs, for example, mimic the returns of premium savings accounts by investing in instruments that offer relatively attractive interest rates, all while maintaining a conservative risk profile. These funds provide a way to earn more than what one might expect from a standard savings account, without venturing into the unpredictable realms of equities.⁶

Similarly, money market ETFs concentrate on short-term, high-quality debt securities. By targeting instruments with maturities of less than a year, these ETFs minimize interest rate risk and credit risk, offering investors a steady stream of income with minimal price fluctuations. Their conservative nature makes them a dependable component of a portfolio during periods of market stress.⁷

In essence, high-yield savings account ETFs and money market ETFs serve as a bridge between the need for liquidity and the desire to preserve capital. As investors grow increasingly cautious amid potential tariff-induced market disruptions, such low-risk options are gaining traction as effective tools for safeguarding wealth and ensuring financial stability.

Navigating your cash with money market and cash alternative ETFs

Our current climate of economic uncertainty has made money market and cash alternative ETFs appealing options for individuals looking to secure capital, generate attractive returns, and manage their investments conveniently.

Evolve’s High Interest Savings Account (HISA ETF) invests in high-interest deposit accounts with Canada’s “Big Six” Banks, while Evolve’s money market funds, Premium Cash Management Fund (MCAD ETF) invests in Canadian dollar-denominated money market instruments.

To learn more about our cash solutions suite, click here for our Cash Solutions brochure. Understand your options for navigating your cash.

ENDNOTES

Halpert, M. & Murphy, J., “Trump agrees to pause tariffs on Canada and Mexico but not on China,” BBC News, February 4, 2025; https://www.bbc.com/news/articles/c87d5rlee52o
Hoskins, P., “China’s tit-for-tat tariffs on US take effect,” BBC News, February 10, 2025; https://www.bbc.com/news/articles/cvg8zg7ll09o
Starcevic, S. & Ruhiyyih Ewing, G., “Trump vows to launch trade war on EU,” Politico, February 1, 2025; https://www.politico.eu/article/donald-trump-trade-war-eu-tariffs-mexico-canada/
Hayes, A., “Risk-On Risk-Off: What It Means for Investing,” Investopedia, December 18, 2023; https://www.investopedia.com/terms/r/risk-on-risk-off.asp
Richardson, D. & Kedwell, S., “When to de-risk a portfolio and why do it?,” The Download, September 3, 2024; https://www.rbcgam.com/en/ca/insights/podcasts/when-to-de-risk-a-portfolio-and-why-do-it/detail/
“High-Interest Savings ETFs,” Ratehub.ca, n.d.; https://www.ratehub.ca/bank-accounts/high-interest-etfs
Archer, C., “What are money market ETFs and how can you invest in them?,” IG, n.d.; https://www.ig.com/en/trading-strategies/what-are-money-market-etfs-and-how-can-you-invest-in-them–241210

Source: Getty Images Credit: Javier Ghersi

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. Please read the prospectus before investing. ETF and mutual fund units are not covered by the Canadian Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurance that the fund will be able to maintain its net asset value per unit at a constant amount or that the full amount of your investment in the fund will be returned to you. Past performance may not be repeated.

Certain statements in this document are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

BANK Q1 2025 Earnings Roundup

Posted on March 7, 2025August 12, 2025 by Janice Leung

Strong Earnings and Revenue Growth

Banks and insurers exceeded expectations, driven by broad-based revenue gains. Wealth management, capital markets, and trading were key contributors, benefiting from market activity. RBC, BMO, and TD saw double-digit revenue growth, while Manulife and Great-West Lifeco posted record results.

Managing Economic Uncertainty

Provisions for credit losses rose as banks took a cautious stance on evolving credit conditions and U.S. trade risks. RBC, TD, and BMO each set aside over $1 billion in provisions. Regulatory compliance and restructuring were key focuses for TD and Scotiabank, which undertook major strategic shifts.

Capital Deployment and Strategic Investments

Firms made bold capital moves to strengthen balance sheets and drive growth. TD’s $13.9 billion Schwab stake sale and $8 billion buyback reinforced capital strength. BMO, RBC, and National Bank pursued geographic expansion, while Scotiabank refocused on North America, and National Bank expanded through its Canadian Western Bank acquisition.

Wealth Management and Insurance Growth

Wealth management and insurance divisions saw strong growth, fueled by market strength and increased client activity. Manulife and Sun Life posted record insurance sales and asset inflows, while CIBC and National Bank reported double-digit gains in wealth management.

Top Portfolio Holdings in the Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund

Royal Bank of Canada (RY)

1Y Total Return: 40.02%

EPS: $3.620 reported vs Bloomberg estimate of $3.257
Revenue: $16.739B reported vs Bloomberg estimate of $15.723B

“RBC’s first quarter exemplifies our commitment to staying ahead of our clients’ expectations in an increasingly complex world. In Q1, we delivered strong results and client-driven growth across our businesses, while prudently managing risk and making investments in technology and talent to position the bank for the future.” – Dave McKay, CEO.

RBC reported a strong first-quarter 2025 performance, with net income rising to $5.13 billion, up from $3.58 billion a year earlier, driven by broad-based business growth and the acquisition of HSBC Bank Canada. Adjusted earnings per share reached $3.62, surpassing analyst expectations of $3.26, while revenue increased 24% year-over-year to $16.74 billion.

Provisions for credit losses rose to $1.05 billion from $813 million, reflecting a more cautious approach amid evolving economic conditions. RBC’s personal and commercial banking divisions posted strong growth, with personal banking earnings climbing 24% to $1.68 billion and commercial banking rising 20% to $777 million. Wealth management profits surged 48% to $980 million, and capital markets earnings grew 24% to $1.43 billion. The bank’s insurance segment also saw gains, reporting $272 million in earnings.

Toronto-Dominion Bank/The (TD)

1Y Total Return: 6.91%

EPS: $2.020 reported vs Bloomberg estimate of $1.949
Revenue: $13.538B reported vs Bloomberg estimate of $13.201B

“TD started the year with strong momentum and record revenue across many of our businesses. While expenses remain somewhat elevated, we delivered solid earnings, which positions us well as we begin the new fiscal year. U.S. AML remediation remains our top priority and we continue to make consistent progress to strengthen the Bank.”- Raymond Chun, CEO.

TD Bank delivered strong Q1 results, surpassing analyst expectations with adjusted earnings of $2.02 per share, compared to the projected $1.95. Strong performances in wealth management and capital markets drove the beat, with wealth earnings reaching $680 million, well above the $578 million estimate. Like its peers, TD benefited from heightened trading activity, mirroring trends seen in major U.S. banks. Provisions for credit losses totaled $1.21 billion, slightly above forecasts, as Canadian lenders prepare for potential economic headwinds, including the uncertainty surrounding U.S. tariffs. Other major banks also set aside over $1 billion in provisions, reflecting a cautious outlook. TD is in the midst of a strategic transition following its US$3.1 billion settlement with U.S. authorities over compliance failures. The bank is restructuring its U.S. balance sheet and investing heavily in regulatory measures, incurring $927 million in related costs this quarter.

In a significant capital move, TD sold its 10.1% stake in Charles Schwab Corp., netting US$13.9 billion after taxes and fees. New CEO Raymond Chun has committed to reinvesting in the bank’s Canadian operations and capital markets franchise. TD also secured regulatory approval for an $8 billion share buyback program, reinforcing its capital strength and long-term growth strategy.

Bank of Montreal (BMO)

1Y Total Return: 19.27%

EPS: $3.040 reported vs Bloomberg estimate of $2.418
Revenue: $9.266B reported vs Bloomberg estimate of $8.573B

“With the strength of our deep geographic and business diversification, we are well positioned to compete and grow in this dynamic operating environment. Our balance sheet is strong, and we’re serving our clients with robust capital and liquidity and business strategies aimed at providing trusted advice – just as we have for over 200 years throughout Canada and the United States.” – Darryl White, CEO.

BMO reported strong quarterly results, with net income rising to $2.14 billion, up from $1.29 billion in the same period last year. Adjusted net income increased to $2.29 billion, while adjusted EPS reaching $3.04. Revenue growth across all operating segments drove positive operating leverage, despite higher provisions for credit losses, which increased to $1.01 billion. The bank’s return on equity improved to 10.6%. BMO maintained a solid capital position with a CET1 ratio of 13.6%. The Canadian Personal & Commercial segment saw a slight decline in earnings despite revenue growth, while U.S. P&C showed mixed results due to higher credit loss provisions. Wealth Management earnings surged 53%, supported by stronger markets and higher net sales. Capital Markets posted a 49% profit increase, driven by robust Global Markets performance. BMO declared a quarterly dividend of $1.59 per share, reflecting a 5% year-over-year increase, and repurchased 1.2 million shares.

Bank of Nova Scotia/The (BNS)

1Y Total Return: 25.71%

EPS: $1.760 reported vs Bloomberg estimate of $1.648
Revenue: $9.372B reported vs Bloomberg estimate of $8.866B

“Our results this quarter demonstrate the value of our diversified franchise and continued focus on deepening relationships with clients across our footprint.” – Scott Thomson, CEO.

Scotiabank surpassed analyst expectations in its fiscal first quarter, benefiting from lower funding costs driven by the Bank of Canada’s 200-basis-point rate cuts since last June. The bank reported earnings of $1.76 per share, exceeding the $1.65 estimate, with net interest income rising 8.4% year-over-year to $5.17 billion. Despite stronger earnings, the bank increased provisions for credit losses to $1.16 billion, above analyst forecasts. Net income dropped 55% to $993 million, largely due to a $1.36 billion after-tax impairment from the transfer of its Colombian, Costa Rican, and Panamanian operations to Banco Davivienda. The move aligns with Scotiabank’s strategy to refocus capital on Canada and the US, highlighted by its recent 14.9% stake acquisition in KeyCorp.

Canadian Imperial Bank of Commerce (CM)

1Y Total Return: 58.14%

EPS: $2.200 reported vs Bloomberg estimate of $1.973
Revenue: $7.281B reported vs Bloomberg estimate of $6.865B

“In the first quarter of 2025, we delivered another strong financial performance by continuing to execute on our client-focused strategy, which is generating consistent results for our stakeholders.” – Victor G. Dodig, CEO.

CIBC posted strong Q1 results, with net income rising 26% to $2.17 billion and adjusted earnings per share reaching $2.20, beating analyst expectations of $1.97. Revenue grew 17% year-over-year to $7.28 billion, driven by solid performances across business segments. The bank’s capital markets division reported a 19% increase in earnings to $619 million, benefiting from favourable market conditions and heightened investor activity. Provisions for credit losses stood at $573 million, reflecting stable credit quality. CIBC’s CET1 ratio improved to 13.5%, underscoring its strong capital position. The board declared a quarterly dividend of $0.97 per share. CEO Victor Dodig credited the results to the bank’s client-focused strategy and diversified business model, highlighting its ability to navigate economic uncertainty while delivering consistent growth.

Manulife Financial Corp (MFC)

1Y Total Return: 52.70%

EPS: $1.030 reported vs Bloomberg estimate of $0.945
Revenue: $13.031B reported

“2024 was a banner year for Manulife on many fronts and we finished the year with very strong results. We delivered record insurance new business results for the full year, including 30%+ increases year-over-year across APE sales, new business CSM and new business value.” – Roy Gori, CEO.

Manulife delivered record financial results in 2024, with core earnings of $7.2 billion, up 8% from the prior year, and fourth-quarter earnings rising 6% to $1.9 billion. Core earnings per share grew 11% to $3.87, and core return on equity remained strong at 16.4%. Asia operations led growth with over 30% increases in insurance sales and new business metrics. Global Wealth and Asset Management saw net inflows exceeding $13 billion, driving a 30% rise in core earnings. Manulife returned $7 billion to shareholders through dividends and share buybacks. Reflecting confidence in its outlook, the company raised its quarterly dividend by 10% and announced plans to repurchase up to 3% of its outstanding shares.

Sun Life Financial Inc (SLF)

1Y Total Return: 25.60%

EPS: $1.680 reported vs Bloomberg estimate of $1.769
Revenue: $7.672B reported

“In 2024 Sun Life achieved strong underlying net income in Asia and Canada, growing 17 percent and six percent over last year, respectively. We also experienced solid growth in Individual Protection with a 20 percent increase in sales over last year, and an 18 percent increase in new business CSM. “ – Kevin Strain, CEO.

In 2024, Sun Life reported underlying net income of $3.86 billion, a 3% increase from the previous year, with a fourth-quarter figure of $965 million, slightly down by 2% from Q4 2023. The company’s underlying return on equity was 17.2% for the year. Assets under management grew by 10%, reaching $1.54 trillion. The Wealth & Asset Management segment saw an 11% rise in underlying net income, totaling $486 million in Q4, contributing to a 6% annual increase. Individual Protection sales experienced a 20% surge over the previous year, with new business Contractual Service Margin increasing by 18%. SLC Management, Sun Life’s alternative asset management arm, reported a 33% boost in net inflows and raised $24 billion in capital throughout the year. Reflecting confidence in its financial strength, Sun Life’s Board of Directors announced a dividend increase to $0.84.

National Bank of Canada (NA)

1Y Total Return: 32.75%

EPS: $2.930 reported vs Bloomberg estimate of $2.666
Revenue: $3.230B reported vs Bloomberg estimate of $3.023B

“The Bank generated strong first quarter financial results, reflecting solid execution across business segments and our diversified earnings power. We were also pleased to recently complete the acquisition of Canadian Western Bank, marking a significant step forward in the acceleration of our domestic growth and toward extending the depth of our banking capabilities to the benefit of all our clients.” – Laurent Ferreira, CEO.

National Bank of Canada reported strong first-quarter results, with net income rising to $997 million, up from $922 million a year earlier, driven by solid performances in wealth management and financial markets. Adjusted EPS, excluding the impact of the Canadian Western Bank acquisition, rose to $2.93, surpassing analyst expectations of $2.67. Revenue grew 17% year-over-year to $3.23 billion. The bank’s provisions for credit losses increased to $254 million, reflecting an evolving credit cycle amid a challenging macroeconomic environment. Wealth management earnings rose 23% to $242 million, while the financial markets segment delivered a 35% increase in profit to $417 million. Conversely, personal and commercial banking earnings declined 14% to $290 million due to higher credit provisions. U.S. specialty finance and international business contributed $183 million, up from $150 million.

National Bank completed its acquisition of Canadian Western Bank on February 3, positioning it for expanded growth in Western Canada.

Great-West Lifeco Inc (GWO)

1Y Total Return: 10.14%

EPS: $1.200 reported vs Bloomberg estimate of $1.132
Revenue: $7.055B reported

“Great-West Lifeco delivered record results in 2024, with strong momentum across segments, positioning the Company for continued growth in 2025 and beyond. The strength of the Company’s earnings momentum and the value created for shareholders is reflected in the 10% increase in the Company’s dividend and our intention to repurchase additional common shares.” – Paul Mahon, CEO.

Great-West Lifeco delivered record fourth-quarter and full-year 2024 results, with strong momentum across all segments. Q4 base earnings rose 15% to $1.1 billion, while full-year base earnings increased 14% to $4.2 billion. Net earnings from continuing operations climbed 50% year-over-year in Q4 to $1.1 billion and 40% for the full year to $4.0 billion. The company’s base return on equity reached 17.5%, exceeding its medium-term objectives, while the LICAT ratio improved two points to 130%. Great-West Lifeco raised its quarterly dividend by 10% to $0.61 per share and announced plans to repurchase an additional $500 million in shares. Assets under administration exceeded $3.2 trillion, with robust growth across all segments. Empower, the largest contributor to U.S. earnings, posted a 30% full-year base earnings increase, fueled by strong market performance, positive net flows, and operational efficiencies.

*1Y Total return as at January 31, 2025. EPS and Revenue data via Bloomberg in CAD.

Source: Getty Images Credit: Pakawadee Wongjinda

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Certain statements in this document are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

The Investment Case for Investing Amid Tariffs: Canadian Banks and Utilities

Posted on February 17, 2025June 3, 2025 by Janice Leung

With the Trump administration’s on-again-off-again threat of tariffs against Canada, a remarkably strong “Buy Canadian” movement has emerged in this country, almost overnight.¹ What are some good options if you are looking to extend this “buy Canadian” approach to your investment portfolio? Look no further than investments in Canadian banks and utilities.

Why Canadian banks and utilities? Both sectors have the advantage of operations deeply tied to the domestic economy. Their ‘local’ nature provides a natural buffer from the direct consequences of U.S. tariffs. However, as tariffs shift global economic dynamics, these sectors may still feel some indirect impacts. For instance, while banks could feel the strain from a potential softening of the economy—reflected in reduced loan demand—the robust balance sheets and sound risk management practices that characterize Canadian banks should enable them to weather the storm. Meanwhile, utilities, buoyed by steady demand as an essential service, have traditionally been relied on as bastions of stability in uncertain times.

So, let’s explore why these sectors remain resilient, how they might navigate the headwinds caused by U.S. tariff policies and why adding them to your portfolio might help you do the same.

A Brief Tariff Primer

Having lived in an era of US-Canadian free trade for so long, many North Americans are now seriously considering tariffs for the first time.

A tariff is, in essence, a tax imposed by a government on imported goods. It is designed to make foreign products more expensive and, in turn, encourage consumers to purchase domestic alternatives. The importer of the goods pays these tariffs, and the costs of the tariffs are usually passed on to consumers.

Governments use tariffs to generate revenue but also to protect local industries and exert economic or political pressure on other nations. However, while tariffs can serve these purposes, they often have negative consequences for consumers. Tariffs lead to higher prices for consumers, reduced market competition, and decreased incentives for innovation. Moreover, tariffs can spark retaliatory measures from other countries—such as those promised by both the Canadian federal and provincial governments should Trump proceed with his tariffs—potentially leading to a prolonged “trade war” that may significantly disrupt global commerce.²

So, while considering the potential impacts of U.S. tariffs on the Canadian economy, it’s important to remember that not all sectors react equally. Although both Canadian banks and utilities operate in domestic markets, their responses to economic pressures—particularly those induced by tariff-driven uncertainties—will differ significantly.

Why Canadian Banks Are Prepared to Weather the Storm

Canadian banks are closely tied to the health of the broader economy. Should we face economic softening triggered by U.S. tariffs, Canadian banks may experience headwinds in consumer and business borrowing. However, despite such potential challenges, Canadian banks boast robust financial foundations.

The surest sign of Canadian banks’ preparedness is their strong balance sheets and diversified revenue streams. In 2024, the five largest Canadian banks had a combined income of more than $47.4 billion.⁵ A mix of retail banking, commercial lending, wealth management, and investment services minimizes reliance on any single source of revenue, thereby spreading risk across various segments. The result is a financial structure that not only supports day-to-day operations but also provides the resilience needed to withstand short-term economic disruptions.

Historically, the performance of Canadian banks during previous economic downturns also underscores the effectiveness of their risk management. By continuously refining their risk management frameworks, Canadian banks ensure they are prepared for current challenges and equipped to handle future uncertainties. Rigorous regulatory oversight in the Canadian financial system has encouraged a culture of prudence within the sector, bolstering confidence in Canadian banks and acting as a bulwark against external pressures. These factors ensure our banks are resilient when conditions fluctuate and remain capable of supporting the broader Canadian economy, even in the face of trade disruptions.⁶

Why Canadian Utilities Are Prepared to Weather the Storm

Utilities are largely insulated from the negative impacts of proposed U.S. tariffs. Their core services, such as electricity, water, and gas, remain essential regardless of economic fluctuations, and this means a reliable domestic customer base and steady revenue streams, making the sector less vulnerable to economic downturns.⁷

One of the key strengths of the utilities sector is its reliance on long-term contracts and regulated pricing models. These agreements provide steady, predictable cash flows, insulating utilities from short-term market fluctuations. With contracts often spanning decades and prices indexed to inflation, utilities can maintain operational stability despite external economic conditions.⁸

At the same time, Canadian utilities continue to make significant investments in modernizing their operations by adopting advanced technologies like smart grids and predictive maintenance systems to boost efficiency and manage costs effectively.⁹ These ongoing infrastructure investments are bolstering the resilience of the utilities sector and positioning it to meet future demand through forward-looking planning.¹⁰ While utilities might face some cost increases if tariffs affect the prices of imported components used in infrastructure projects, the overall operational risk remains relatively low. Reliable demand for utilities acts as a safeguard, ensuring consistent performance and reducing volatility even in the face of tariff-driven economic uncertainty.

Investing for Stability with BANK ETF and UTES ETF

Facing an uncertain economy, banks make attractive targets for savvy investors. A great way to invest in a diverse portfolio of Canada’s largest banks, as well as Canada’s largest insurance companies, is through Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund (BANK ETF) (BANK ETF).

BANK provides investors with enhanced yield from exposure to Canada’s largest banks and insurance companies through a covered call strategy applied on up to 33% of the portfolio and 25% maximum leverage. Covered call options have the potential to provide extra income and reduce volatility.

Don’t miss the chance to make bank with BANK in your portfolio. For more information, visit the fund page here: https://evolveetfs.com/product/bank/.

And if you’re looking for investments with low volatility and stable revenue that can help mitigate risks for your portfolio in challenging times, consider the Evolve Canadian Utilities Enhanced Yield Index Fund (UTES ETF). This Fund looks beyond traditional utilities investing to give investors exposure to three kinds of essential services—utilities, pipelines, and telecom. With UTES, you get simplified access to the top 10 Canadian utility, telecom, and pipeline companies in one accessible investment vehicle.

For more information on UTES ETF, visit our website at https://evolveetfs.com/product/utes/.

ENDNOTES

Oliver, K., “Buy-Canadian website flooded with thousands of new user submissions,” National Post, February 4, 2025; https://nationalpost.com/news/canada/buy-canadian-website-flooded-with-thousands-of-new-user-submissions
Nevil, S., “What Is a Tariff and Why Are They Important?,” Investopedia, January 31, 2025; https://www.investopedia.com/terms/t/tariff.asp
“Trump’s 25% Tariff Threat: New Analysis Reveals Severe Economic Fallout for Both Canada and the U.S.,” Canadian Chamber of Commerce, November 28, 2024; https://chamber.ca/news/trumps-25-tariff-threat-new-analysis-reveals-severe-economic-fallout-for-both-canada-and-the-u-s/
Karim, N., “Tariffs to have a severe, indirect impact on Canadian bank stocks, analysts say,” Financial Post, February 3, 2025; https://financialpost.com/fp-finance/banking/tariffs-hit-canadian-bank-stocks#:~:text=The%20tariffs%20won’t%20impact,about%20a%20potential%20trade%20war.
“Net income of the largest banks in Canada in 2024,” Statista, January 20, 2025; https://www.statista.com/statistics/460700/net-income-before-tax-leading-canadian-banks
“Why Canada Didn’t Have a Banking Crisis in 2008,” National Bureau of Economic Research, December 1, 2011; https://www.nber.org/digest/dec11/why-canada-didnt-have-banking-crisis-2008.
Bouw, B., “Why this money manager is buying utilities and pipelines while cutting back on banks and tech,” The Globe and Mail, March 1, 2024; https://www.theglobeandmail.com/investing/globe-advisor/advisor-funds/article-why-this-money-manager-is-buying-utilities-and-pipelines-while-cutting/
Raghunath, A., “Pipeline to Prosperity: Invest in Enbridge and Pembina Stock,” Yahoo Finance, July 12, 2024; https://ca.finance.yahoo.com/news/pipeline-prosperity-invest-enbridge-pembina-205000232.html
Wolfe, S., “Canadian utility launches $1.6 billion grid modernization plan,” Factor This, May 9, 2024; https://www.renewableenergyworld.com/power-grid/grid-modernization/canadian-utility-launches-1-6-billion-grid-modernization-plan/
“Green Infrastructure Smart Grid Program,” Natural Resource Canada, n.d.; https://natural-resources.canada.ca/funding-partnerships/smart-grids

Source: Getty Images Credit: Olga Matveeva

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Leverage increases risk.

Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Certain statements in this document are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

Evolve FANGMA Index ETF: Q4 2024 Earnings Roundup

Posted on February 12, 2025February 12, 2025 by Janice Leung

AI and Cloud Remain the Growth Engines

AI remains the top priority for the FANGMA companies, with Microsoft, Alphabet, Amazon, and Meta pouring billions into AI infrastructure. Microsoft’s AI business hit a $13 billion annual run rate, while Google and Amazon ramp up their AI-driven cloud services. However, cloud growth is slowing, with AWS trailing Microsoft and Google in expansion.

Advertising Strength and Subscription Growth

Digital ad revenues surged across Meta, Alphabet, and Amazon, with Meta posting 21% revenue growth and YouTube ads up 13.8%. Meanwhile, Apple and Netflix capitalized on subscription-based models, with Apple surpassing 1 billion subscriptions and Netflix growing its ad-supported tier.

Cautious Outlook Despite Profitability Gains

Despite a record-breaking quarter for big tech on many fronts, with Apple posting a best-ever 46.9% gross margin and Amazon delivering its most successful holiday season, companies tempered expectations with cautious guidance. Macro uncertainty and intensifying AI competition weighed on their outlooks. While AI remains a key long term growth driver, rising execution risks and mounting capital expenditures pose growing challenges.

Top Portfolio Holdings in the Evolve FANGMA Index ETF*

Apple Inc (AAPL)

Portfolio weight: 16.20%

EPS: $2.40 reported vs Bloomberg estimate of $2.35
Revenue: $124.3B reported vs Bloomberg estimate of $124.1B

“Today Apple is reporting our best quarter ever, with revenue of $124.3 billion, up 4 percent from a year ago.” – Tim Cook, CEO.

Apple reported revenue of $124.3 billion, slightly exceeding estimates, while earnings per share of $2.40 also topped expectations. Net income rose 7.1% to $36.33 billion, and gross margin hit a record 46.9%. However, iPhone sales fell short at $69.14 billion, missing forecasts and marking Apple’s biggest iPhone revenue miss in two years, partly due to a decline in Greater China sales (down 11.1%). CEO Tim Cook attributed the weakness to channel inventory adjustments, the absence of Apple Intelligence in China, and upcoming government subsidies that could boost future sales. Apple’s Services revenue grew 14% to $26.34 billion, reaching 1 billion subscriptions, while Mac and iPad sales rebounded strongly, rising 15% each amid excitement for new product launches. The Wearables segment declined 2% year-over-year to $11.75 billion. Looking ahead, Apple forecasts low to mid-single-digit revenue growth in the coming quarter, with Services expected to grow in the low double digits. The company also spent $30 billion on dividends and share repurchases and announced a 25-cent per-share dividend. Despite challenges in China, Apple remains focused on expanding AI capabilities and device ecosystem growth, with 2.35 billion active devices now in use worldwide.

Microsoft Corporation (MSFT)

Portfolio weight: 15.20%

EPS: $3.230 reported vs Bloomberg estimate of $3.124
Revenue: $69.632B reported vs Bloomberg estimate of $68.915B

“We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead. Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year.” – Satya Nadella, CEO.

Microsoft reported revenue of $69.63 billion, surpassing estimates, while earnings per share of $3.23 also beat expectations. However, Azure cloud revenue growth slowed to 31%, missing forecasts and marking a decline from the previous quarter’s 33% growth. The company’s Intelligent Cloud segment brought in $25.54 billion, slightly below expectations, and CFO Amy Hood projected next quarter Azure growth of 31-32%, trailing the 33.4% consensus. Microsoft also issued a weaker-than-expected revenue forecast of $67.7 billion to $68.7 billion, missing the $69.78 billion consensus, leading to investor concerns. Net income rose to $24.11 billion, up from $21.87 billion a year ago, while capital expenditures reached $15.8 billion, with similar spending expected in the coming quarters. Microsoft continues investing heavily in AI, reaching a $13 billion annual AI revenue run rate, expanding GitHub’s AI capabilities, and adding $750 million more into OpenAI. The Productivity and Business Processes segment, which includes Office and LinkedIn, saw 13.9% revenue growth to $29.44 billion, while the More Personal Computing unit, including Windows and Xbox, remained flat at $14.65 billion but exceeded expectations. Despite AI efficiency gains, Microsoft faces execution challenges and cloud capacity constraints, with AI competition increasing from global players like DeepSeek. Looking ahead, capital spending is expected to slow in fiscal 2026, but Microsoft remains committed to scaling AI capabilities across its ecosystem.

Alphabet Inc (GOOGL)

Portfolio weight: 16.38%

EPS: $2.150 reported vs Bloomberg estimate of $2.130
Revenue: $96.47B reported vs Bloomberg estimate of $96.56B

“Our results in the first quarter reflect strong performance from Search, YouTube and Cloud. We are well under way with our Gemini era and there’s great momentum across the company. Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.” – Sundar Pichai

Alphabet reported fourth-quarter revenue of $96.47 billion, slightly missing Wall Street’s estimate of $96.56 billion, while earnings per share of $2.15 narrowly beat expectations. Despite a 12% year-over-year revenue increase, growth across its core businesses, including search, YouTube ads, and cloud services, was slower compared to last year. YouTube ad revenue rose 13.8% to $10.47 billion, exceeding expectations, but Google Cloud revenue fell short at $11.96 billion, despite growing 30% year-over-year. The company also announced a significant $75 billion capital expenditure plan for 2025, well above the expected $58.84 billion, aimed at expanding AI capabilities and increasing compute capacity to meet high demand. Net income surged 28% to $26.54 billion, but the underperformance of the Other Bets segment, including Waymo and Verily, weighed on results, with revenue falling 39% year-over-year to $400 million. Alphabet remains committed to expanding its AI and cloud offerings, emphasizing the need for additional capacity to support growing demand.

Amazon.com Inc (AMZN)

Portfolio weight: 16.55%

EPS: $1.860 reported vs Bloomberg estimate of $1.474
Revenue: $187.792B reported vs Bloomberg estimate of $187.323B

“The holiday shopping season was the most successful yet for Amazon and we appreciate the support of our customers, selling partners, and employees who helped make it so.” – Andy Jassy, CEO.

Amazon reported fourth-quarter revenue of $187.79 billion, slightly exceeding expectations, while earnings per share of $1.86 far outpaced forecasts. Net income nearly doubled to $20 billion, reflecting strong cost-cutting efforts and margin improvements, with operating margin rising to 11.3%, up from 7.8% a year ago. However, first-quarter revenue guidance of $151–$155.5 billion fell short of Wall Street’s $158.5 billion estimate, with the company citing a $2.1 billion foreign exchange impact. Amazon Web Services (AWS) revenue hit $28.8 billion, growing 19% year-over-year, though it continues to lag behind Microsoft Azure (31%) and Google Cloud (30%). The company’s capital expenditures surged to $27.8 billion, with plans to increase spending to $100 billion in 2025, primarily to support AWS and AI infrastructure. CEO Andy Jassy emphasized AI investments, including new AI models (Nova) and custom Trainium chips, as Amazon competes with OpenAI, Google, and Anthropic in generative AI. Advertising revenue rose 18% to $17.3 billion, cementing Amazon’s position as a top digital ad platform. Despite solid profitability, the slower revenue growth outlook (5–9%) weighed on investor sentiment, leading to a post-earnings stock decline.

Meta Platforms (META)

Portfolio weight: 17.77%

EPS: $8.020 reported vs Bloomberg estimate of $6.780
Revenue: $48.385B reported vs Bloomberg estimate of $46.977B

“We continue to make good progress on AI, glasses, and the future of social media. I’m excited to see these efforts scale further in 2025.” – Mark Zuckerberg, CEO.

Meta reported a strong fourth quarter, with revenue of $48.39 billion, exceeding expectations, while earnings per share of $8.02 also beat forecasts. Sales grew 21% year-over-year, and net income surged 49% to $20.8 billion, reflecting continued advertising strength and AI-driven engagement. Daily active users reached 3.35 billion, surpassing estimates, and the Meta AI chatbot grew to 700 million users, with expectations to hit 1 billion by year-end. Meta remains committed to open-source AI, with Llama 4 training progressing well, reinforcing its position against competitors like OpenAI and Google. The company announced $60–$65 billion in capital expenditures for 2025, prioritizing AI infrastructure as a long-term strategic advantage. However, first-quarter revenue guidance of $39.5–$41.8 billion was slightly below Wall Street’s $41.73 billion forecast. The Reality Labs unit reported a $5 billion operating loss, generating $1.1 billion in sales, as Meta continues its push into virtual and augmented reality. Total 2025 expenses are projected at $114–$119 billion, with a focus on AI, infrastructure, monetization, and compliance hiring. While Meta didn’t provide a full-year revenue outlook, the company expects strong growth throughout 2025, supported by AI innovation and expanding engagement.

Netflix Inc (NFLX)

Portfolio weight: 17.90%

EPS: $4.270 reported vs Bloomberg estimate of $4.182
Revenue: $10.247B reported vs Bloomberg estimate of $10.106B

Netflix delivered a strong fourth-quarter performance, surpassing 300 million paid subscribers with a record 19 million new additions, driven by a robust content slate, product enhancements, and seasonal factors. Revenue rose 16% year-over-year to $10.25 billion, exceeding expectations, while net income doubled to $1.87 billion. The company’s ad-supported tier gained traction, representing 55% of new sign-ups, with memberships growing 30% quarter-over-quarter. Netflix will no longer report quarterly subscriber counts, shifting to biannual engagement reports starting in 2025. Major content hits included “Squid Game” Season 2, live NFL games, and the Jake Paul vs. Mike Tyson fight, with upcoming releases like “Stranger Things,” “Wednesday,” “Knives Out 3,” and “Happy Gilmore 2” set to drive engagement. Netflix also announced price increases of $1 to $2 per month on some plans and aims to expand its advertising business while investing further in live events and gaming. Revenue guidance for 2025 was raised to $43.5–$44.5 billion, reflecting continued business strength.

*Portfolio weights as at January 31, 2025. EPS and Revenue data via Bloomberg in USD.

Source: Getty Images Credit: monsitj

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Certain statements in this document are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

Evolve US Banks Enhanced Yield Fund: Q4 2024 Earnings Roundup

Posted on January 21, 2025January 22, 2025 by Janice Leung

Strong Earnings Driven by Trading and Interest Income

American banks reported a record-breaking quarter, driven by surging trading activity around the U.S. election and a rebound in investment banking deal flow. Earnings reports from major U.S. banks highlight robust profits and broad revenue growth. Key themes include soaring trading and investment banking revenues, higher net interest income (NII), and effective cost management, despite ongoing macroeconomic challenges.

Investment Banking and Trading Outperformance

Investment banking and trading were bright spots for all five banks. Fixed income and equities trading revenues exceeded expectations at JPMorgan, Goldman Sachs, and Citigroup, benefiting from improved market activity. Investment banking fees surged across the sector with the banks signaling a rebound in deal-making and capital markets activity.

Elevated Net Interest Income

Net interest income continued to bolster results, fueled by elevated rates and robust loan books. JPMorgan, Bank of America, and Wells Fargo reported meaningful year-over-year NII growth, though banks acknowledged that upcoming rate cuts could moderate this trend in 2025.

Preparing for Risks Ahead

Despite the strong quarter, CEOs cautioned against potential headwinds, including inflation, geopolitical risks, and regulatory pressures. Leaders like Jamie Dimon and Jane Fraser emphasized the need for strategic capital deployment and cost discipline to navigate these uncertainties.

Top Portfolio Holdings in the Evolve US Banks Enhanced Yield Fund*

JPMorgan Chase & Co (JPM)

Portfolio weight: 6.48%

EPS: $4.810 reported vs Bloomberg estimate of $4.100
Revenue: $43.738B reported vs Bloomberg estimate of $42.010B

“The Firm concluded the year with a strong fourth quarter, generating net income of $14.0 billion. Each line of business posted solid results. In the CIB, clients were active, with IB fees up 49%, and Markets revenue rose 21%. Additionally, Payments fees grew by double digits for the fourth consecutive quarter, helping drive Payments revenue to a record $18.1 billion for the year. In CCB, we continued to acquire new customers across Consumer Banking, Business Banking, Card and wealth management. For example, nearly 2 million net new checking accounts were opened during 2024. Finally, in AWM, management fees rose 21%, and revenue hit a record $5.8 billion. More impressively, client asset net inflows totaled $486 billion in 2024, bringing cumulative net inflows over the past two years to $976 billion.” – Jamie Dimon, Chairman and CEO.

JPMorgan Chase reported record quarterly and annual earnings, cementing its status as the largest and most profitable U.S. bank. The bank posted earnings of $4.81 per share, beating the $4.11 estimate, and revenue of $43.74 billion, exceeding projections. Fourth-quarter profit jumped 50% to $14 billion, driven by a 7% decline in noninterest expenses and strong net interest income of $23.47 billion. Fixed income trading revenue rose 20% to $5 billion, while investment banking fees increased 49% to $2.48 billion, both outperforming expectations, though equities revenue fell short despite a 22% gain. CEO Jamie Dimon noted the economy’s resilience, fueled by low unemployment and consumer spending, but warned of inflationary pressures and geopolitical risks. Analysts are focused on the bank’s plans for deploying capital amid potential regulatory shifts, as well as leadership changes, with Dimon signaling a possible exit within five years.

Bank of America Corp (BAC)

Portfolio weight: 6.28%

EPS: $0.820 reported vs Bloomberg estimate of $0.769
Revenue: $25.501B reported vs Bloomberg estimate of $25.204B

“We finished 2024 with a strong fourth quarter. Every source of revenue increased, and we saw better than industry growth in deposits and loans. We also ended with strong capital and liquidity, enabling us to return $21 billion of capital to shareholders in 2024. We believe this broad momentum sets up 2025 very well for Bank of America. I thank all my teammates for another great year, and together we look forward to driving the company forward in 2025 against the backdrop of a solid economic environment.” – Brian Moynihan, CEO.

Bank of America delivered strong fourth-quarter results, exceeding expectations for profit and revenue. The bank reported earnings of 82 cents per share, above the 77-cent estimate, and revenue of $25.5 billion, surpassing forecasts. Quarterly profit more than doubled to $6.67 billion, aided by the absence of last year’s $2.1 billion FDIC assessment and a $1.6 billion charge tied to interest rate swaps. Revenue rose 15%, driven by a 44% surge in investment banking fees to $1.65 billion and solid performance in asset management and trading. Fixed income revenue climbed 13% to $2.48 billion, and equities rose 6% to $1.64 billion, both aligning with estimates. Net interest income, a key metric, increased 3% to $14.5 billion, beating projections by $170 million. CEO Brian Moynihan had earlier signaled strong investment banking momentum, and analysts remain focused on how rate cut expectations could impact the bank’s net interest income target for 2025.

Wells Fargo & Co (WFC)

Portfolio weight: 7.34%

EPS: $1.420 reported vs Bloomberg estimate of $1.348
Revenue: $20.378B reported vs Bloomberg estimate of $20.587B

“I believe we are still in the early stages of seeing the benefits of the momentum we are building, and our financial performance should continue to benefit from the work we are doing to transform the company.” Charlie Scharf, CEO.

Wells Fargo reported strong fourth-quarter results, exceeding profit expectations and providing upbeat guidance for 2025 net interest income. Earnings per share reached $1.42, surpassing the $1.35 estimate, while revenue slightly declined to $20.38 billion, just below the $20.59 billion forecast. Net income surged 47% year-over-year to $5.1 billion, supported by lower severance costs. Investment banking fees rose 59% to $725 million, and the bank repurchased $4 billion in common stock during the quarter. CEO Charlie Scharf highlighted Wells Fargo’s improved earnings profile, stronger balance sheet, and progress on growth initiatives and risk management. For 2025, the bank projects net interest income to increase 1% to 3% over 2024’s $47.7 billion.

Goldman Sachs Group Inc (GS)

Portfolio weight: 6.63%

EPS: $11.950 reported vs Bloomberg estimate of $8.212
Revenue: $13.869B reported vs Bloomberg estimate of $12.374B

“We are very pleased with our strong results for the quarter and the year. I’m encouraged that we have met or exceeded almost all of the targets we set in our strategy to grow the firm five years ago, and as a result, have both grown our revenues by nearly 50% and enhanced the durability of our franchise. With an improving operating backdrop and growing CEO confidence, we are harnessing the power of One Goldman Sachs to continue to serve our clients with excellence and create further value for our shareholders.” – David Solomon, CEO.

Goldman Sachs reported strong fourth-quarter results, with earnings of $11.95 per share far exceeding the $8.22 estimate, and revenue rising 23% to $13.87 billion, beating forecasts of $12.37 billion. Profit doubled to $4.11 billion as the bank benefited from higher trading revenue and lower expenses. Equities trading generated $3.45 billion, surpassing expectations by $450 million, while fixed income trading brought in $2.74 billion, exceeding estimates by $300 million. The asset and wealth management division also outperformed, with revenue climbing 8% to $4.72 billion, $560 million above forecasts. CEO David Solomon highlighted Goldman’s focus on leveraging its “One Goldman Sachs” strategy amid improving market conditions and renewed Wall Street deal activity. Following a challenging pivot away from consumer finance, the bank has regained momentum, with shares jumping nearly 50% in 2024, bolstered by market optimism around Federal Reserve rate cuts and a rebound in mergers and the IPO market.

Citigroup Inc (C)

Portfolio weight: 6.74%

EPS: $1.359 reported vs Bloomberg estimate of $1.220
Revenue: $19.581B reported vs Bloomberg estimate of $19.502B

“2024 was a critical year and our results show our strategy is delivering as intended and driving stronger performance in our businesses. Our net income was up nearly 40% to $12.7 billion and we exceeded our fullyear revenue target, including record years in Services, Wealth and U.S. Personal Banking. We delivered expenses within our guidance and improved our efficiency ratio while concluding a significant reorganization of our firm. We returned nearly $7 billion of capital to common shareholders and our Board of Directors has authorized a program to repurchase $20 billion in common stock.” – Jane Fraser, CEO.

Citigroup reported strong Q4 results, with earnings of $1.36 per share beating the $1.22 estimate and revenue rising 12% year-over-year to $19.58 billion, exceeding forecasts. Net income improved to $2.86 billion from a $1.84 billion loss a year earlier, driven by growth across divisions. Investment banking revenue surged 35% to $925 million, while markets revenue grew 36% to $4.58 billion, led by fixed income outperformance. Wealth and services units posted double-digit growth. CEO Jane Fraser highlighted strategic progress, with full-year net income up nearly 40% to $12.7 billion, though the 2026 return on tangible common equity target was revised to 10%-11%. Citigroup announced a $20 billion stock buyback, with $1.5 billion planned for Q1 2025. Elevated expenses reflect ongoing transformation efforts, but Fraser reaffirmed a focus on long-term shareholder value, with Banamex’s IPO now expected by 2026.

*Portfolio weights as at December 31, 2024. Holdings sorted by Market Cap. Figures in USD.

Source: Getty Images Credit: Javier Ghersi

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Certain statements in this document are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Evolve Funds Group Inc. and the portfolio manager believe to be reasonable assumptions, neither Evolve Funds Group Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

Canada’s Energy Advantage: Meeting AI’s Soaring Power Needs Sustainably

Posted on January 6, 2025January 14, 2025 by Janice Leung

While the artificial intelligence (AI) revolution is transforming industries worldwide, the rapid expansion of this technology comes with significant energy implications, as AI technologies require vast computational power to operate. Machine learning model training and real-time data processing require far more computational power than traditional digital tasks. For instance, creating a single AI-generated image can consume up to 10,000 times more energy than a simple Google search.¹

With their energy-intensive operations, data centres that power AI computations are emerging as a critical driver of electricity demand, reshaping the relationship between the tech sector and energy providers. As the demand for AI capabilities accelerates, this surge in energy usage will heighten pressures on electricity grids.

For Canada, this shift represents a significant economic opportunity. The country’s utilities sector, underpinned by abundant renewable energy resources and a stable energy infrastructure, is well-positioned to meet the rising demand for clean and reliable power. As global tech giants and AI developers seek sustainable energy solutions, Canada’s utilities stand to play a pivotal role in powering the next phase of AI growth while delivering long-term benefits to investors and the broader economy.

Projected Growth in AI-Driven Power Demand

Data centres are at the heart of electricity supply challenges, which form the backbone of AI development and deployment. These facilities—already responsible for an estimated 1.4% to 1.7% of global electricity consumption—are set to expand dramatically in size and number as AI adoption accelerates. According to the International Energy Agency (IEA), the energy consumption of data centres worldwide is expected to double by the end of 2026, driven largely by AI workloads.²

In North America, Wood Mackenzie forecasts a 50% increase in electricity demand across the continent by 2050, with data centres and electric vehicles being key drivers of growth.³ Within Canada, electricity consumption is also expected to rise significantly in response to the increasing energy needs of AI technologies. For example, Hydro Quebec anticipates a 4.1 terawatt-hour (TWh) increase in electricity demand from data centres between 2023 and 2032—equivalent to roughly 2% of the province’s total electricity production in 2022.⁴ This is a substantial rise, underscoring the growing role that AI and related technologies will play in shaping future energy requirements.

For Canadian utilities, the confluence of AI-driven power consumption and broader electrification trends presents opportunities as the industry adapts to meet this evolving energy landscape.

Canada’s Strategic Advantages for Meeting AI Energy Demands

Canada’s vast natural resources and our favourable geographic and policy environment, position the country as a key strategic player in meeting the growing energy demands of AI and data centres.

With AI adoption accelerating across sectors, the data centre footprint in Canada is already expanding to meet these needs. According to the Canada Energy Regulator, there are currently 239 operational data centres across the country, with more planned and under construction, a figure that underscores the increasing role of these facilities in the national energy landscape.⁵ As Canadian utilities look to accommodate the rising demand from data centres, this sector’s energy needs are becoming a key factor in shaping future electricity demand forecasts.

One of Canada’s most significant advantages lies in our abundance of renewable energy sources, particularly hydroelectric power. Canada is the world’s third-largest producer of hydroelectricity, with nearly 600 hydroelectric stations representing 82,232 megawatts of installed capacity (up from just over 75,000 megawatts in 2010). Each year, hydroelectric stations generate 393,789 gigawatt-hours across Canada, representing nearly 62% of total electricity generation in the country.⁶

Canada’s cooler climate significantly reduces the need for energy-intensive cooling systems in data centres, which can account for a substantial portion of operational costs in warmer regions.⁷ And we are well-positioned to support the infrastructure needs of expanding data centres, with an abundance of available land that provides ample space for large-scale facilities and hydroelectric stations positioned where the combination of flowing water and natural topography make electrical generation most advantageous, particularly in Quebec, Ontario, Newfoundland and Labrador, Manitoba, and British Columbia.⁸

Economic Implications for Canadian Utilities

The surge in demand for electricity driven by AI and data centres presents significant revenue growth potential for Canadian utilities as tech companies ramp up their data centre investments and put pressure on existing grid capacity. If the 20 to 30 data centre projects currently under regulatory review are approved, the energy needs of data centres across Canada would account for 14% of Canada’s total power needs by 2030.⁹

This shift could foster new partnerships between Canadian utilities and Big Tech companies. Major players like Amazon, Google, and Meta have long been at the forefront of renewable energy investments, and their need for a reliable, clean energy supply to power their AI workloads makes Canada an attractive partner. Between 2020 and 2022 alone, the power demands from Microsoft, Google, Amazon, and Meta grew by 58%, driven heavily by the demands from data centres. And such demand shows no sign of slowing. Microsoft on its own is adding the equivalent of a new data centre to its arsenal every three days.¹⁰

As already-established buyers of significant quantities of renewable energy, these companies could drive increased collaboration with Canadian utilities to feed their growing electricity demands, particularly those with strong renewable portfolios such as Hydro Quebec. Such partnerships may involve power purchase agreements (PPAs) or direct investments in new energy infrastructure, creating long-term contracts that can provide utilities with predictable, stable revenues.¹¹

Investing in utilities, pipelines, and telecoms with UTES ETF

Are you looking for investments with low volatility and stable revenue? Interested in ways to mitigate risks for your portfolio during challenging times?

The Evolve Canadian Utilities Enhanced Yield Index Fund (UTES ETF) looks beyond traditional utilities investing to give investors exposure to three kinds of essential services—utilities, pipelines, and telecom. With UTES, you get simplified access to the top 10 Canadian utility, telecom, and pipeline companies in one accessible investment vehicle.

For more information on UTES ETF, please visit our website or contact us.

ENDNOTES

Stephenson, A., “AI boom could spur large-scale investments in clean energy: experts,” The Canadian Press, October 2, 2024; https://www.thecanadianpressnews.ca/business/ai-boom-could-spur-large-scale-investments-in-clean-energy-experts/article_02a4fd5a-e75f-5a9a-916d-1de8a0b53170.html
“Market Snapshot: Energy demand from data centers is steadily increasing, and AI development is a significant factor,” Canada Energy Regulator, October 2, 2024; https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2024/market-snapshot-energy-demand-from-data-centers-is-steadily-increasing-and-ai-development-is-a-significant-factor.html
Stephenson, A., “AI boom could spur large-scale investments in clean energy: experts,” The Canadian Press, October 2, 2024; https://www.thecanadianpressnews.ca/business/ai-boom-could-spur-large-scale-investments-in-clean-energy-experts/article_02a4fd5a-e75f-5a9a-916d-1de8a0b53170.html
“Market Snapshot: Energy demand from data centers is steadily increasing, and AI development is a significant factor,” Canada Energy Regulator, October 2, 2024; https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2024/market-snapshot-energy-demand-from-data-centers-is-steadily-increasing-and-ai-development-is-a-significant-factor.html
Stephenson, A., “AI boom could spur large-scale investments in clean energy: experts,” The Canadian Press, October 2, 2024; https://www.thecanadianpressnews.ca/business/ai-boom-could-spur-large-scale-investments-in-clean-energy-experts/article_02a4fd5a-e75f-5a9a-916d-1de8a0b53170.html
“Hydroelectric energy,” Natural Resources Canada, April 29, 2024; https://natural-resources.canada.ca/our-natural-resources/energy-sources-distribution/renewable-energy/hydroelectric-energy/25792
“Market Snapshot: Energy demand from data centers is steadily increasing, and AI development is a significant factor,” Canada Energy Regulator, October 2, 2024; https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2024/market-snapshot-energy-demand-from-data-centers-is-steadily-increasing-and-ai-development-is-a-significant-factor.html
“Hydroelectric energy,” Natural Resources Canada, April 29, 2024; https://natural-resources.canada.ca/our-natural-resources/energy-sources-distribution/renewable-energy/hydroelectric-energy/25792
Merwat, S., “Power Struggle: How AI is challenging Canada’s electricity grid,” Royal Bank of Canada, December 4, 2024; https://thoughtleadership.rbc.com/power-struggle-how-ai-is-challenging-canadas-electricity-grid/
“AI and Electricity Demand: Will the Power-Hungry Machines be Satiated?,” TD Asset Management, August 28, 2024; https://www.td.com/content/dam/tdcom/canada/tdam/en/investor/pdf/news-insight/ai-and-electricity-demand-en.pdf
“Power Purchase Agreements (PPAs) and Energy Purchase Agreements (EPAs),” The World Bank, December 11, 2024; https://ppp.worldbank.org/public-private-partnership/sector/energy/energy-power-agreements/power-purchase-agreements

Source: Getty Images Credit: Galeanu Mihai

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Please read the prospectus before investing. The indicated rates of return are the historical annual compound total returns net of fees (except for figures of one year or less, which are simple total returns) including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated..

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cybersecurity Awareness Month 2024: How Major Cyberattacks Are Shaping New Defences

Posted on October 1, 2024 by Janice Leung

October marks the annual return of Cyber Security Awareness Month, Security Awareness Month, an international campaign aimed at raising awareness about the importance of cybersecurity and the need to protect systems from malicious actors, ransomware, and other cyber threats.¹

However, Cyber Security Awareness Month 2024 feels different.

Recent high-profile cyberattacks on Fortune 500 companies and government agencies worldwide have underscored the growing sophistication of hackers and the vulnerabilities they exploit. Demand for cybersecurity solutions is surging as businesses scramble to defend their digital borders. With the global cost of cybercrime estimated at $9.5 trillion USD for 2024, the sector has become a critical focal point for investors and corporate boards alike.² Meanwhile, technological advancements in artificial intelligence and machine learning are reshaping the landscape, promising both heightened defences and new threats.

So, let’s look at the state of cybersecurity so far in 2024, focusing on some recent cyberattacks and the demand for security they’ve highlighted across industries, and see what trends will be shaping cybersecurity into 2025.

Most Significant Cyberattacks and Breaches in 2024

Cybercrime has been big news throughout 2024. Some highlights (or perhaps lowlights would be a better description) include:

Snowflake Customers Targeted: In June, Snowflake Inc., a prominent cloud storage firm, disclosed a cyberattack that could become one of the largest data breaches ever. Hackers exploited stolen login credentials, obtained via info-stealing malware, to access customer accounts. Major companies, including Ticketmaster and Santander, were reportedly impacted. While hundreds of Snowflake customer passwords have already surfaced online, the hackers claim to possess 560 million records from Ticketmaster and 30 million from Santander. However, the companies have yet to confirm the extent of the breaches.⁵
Microsoft Executive Accounts Breach: In January, Microsoft revealed that a Russia-linked hacker group breached emails belonging to senior Microsoft leadership, as well as its cybersecurity and legal teams. The attack was attributed to the same group that orchestrated the 2020 SolarWinds breach. Multiple U.S. federal agencies were affected as part of this breach, with the hackers siphoning communications between Microsoft and federal agencies through the compromised Microsoft corporate email accounts. The breach, traced back to November 2023, occurred after hackers exploited a legacy account lacking multifactor authentication.³
CDK Global Attack: In June, CDK Global, a key software provider for North American car dealerships, was hit by a ransomware attack orchestrated by an Eastern European cybercrime group. The hackers demanded tens of millions in ransom, severely disrupting operations at roughly 15,000 dealerships across the U.S. and Canada. The timing, coinciding with the end-of-quarter sales push, crippled sales, repairs, and vehicle deliveries in an industry worth $1.2 trillion annually. The attack forced a complete shutdown of CDK’s core dealership management system (DMS), a critical tool for dealership operations. The incident exposed the sector’s reliance on a small number of DMS providers, an issue worsened by consolidation in the industry.⁴
AT&T Breach: In March, AT&T launched an investigation into a potential data breach after personal information from over 70 million current and former customers appeared on the dark web. The telecom giant confirmed that AT&T-specific data fields were included in a set released online. Initial analysis suggested the data, which includes social security numbers, likely dates back to 2019 or earlier and affects around 7.6 million active accounts and 65.4 million former customers.⁶
CrowdStrike Update Error: Not a cyberattack per se, but certainly deserving a mention here, nonetheless. In July, a software glitch during a routine update from cybersecurity firm CrowdStrike caused a major IT outage, impacting businesses worldwide. The update, which affected Windows systems, led to the “blue screen of death” for many Microsoft users. Airlines, hospitals, financial services, and media outlets were among the most affected.⁷ Approximately 25% of all Fortune 500 companies faced disruptions, with estimated financial losses for these companies (excluding Microsoft) amounting to $5.4 billion.⁸ Experts called the outage’s scale unprecedented, emphasizing the complexity of managing critical security software.

Surging Demand for Cybersecurity

As just this small sample of incidents shows, there is an urgent and growing need for more robust cybersecurity initiatives across industries. In Canada alone, cybercrime costs the economy more than $3 billion annually.⁹ Combating this begins, in large part, with people.

Despite millions of open cybersecurity positions worldwide, companies are struggling to fill them, contributing to a global shortfall of nearly 4 million cybersecurity professionals. This shortage—driven by factors like outdated training, lack of clear career paths, and high levels of job-related job stress—is creating a widening gap between cyber-resilient organizations and those vulnerable to attacks, according to the World Economic Forum (WEF).

In WEF’s Global Cybersecurity Outlook 2024 report, 90% of surveyed executives emphasized the urgent need to address this growing cyber inequity. Emerging technologies like generative AI are expected to exacerbate existing challenges. The report highlighted that the expanding talent and skills gap is the primary obstacle to strengthening cybersecurity defences, with 71% of organizations currently facing vacant roles in the field.¹⁰

Innovative Trends in the Cybersecurity Industry

If there aren’t enough people to keep up with the demands of cutting-edge cybersecurity, how can companies and organizations effectively manage their digital security? The answer lies in advanced technologies like artificial intelligence (AI) and machine learning (ML), which cybersecurity providers are already leveraging to stay ahead of the threat actors. These algorithms are poised to play an increasingly critical role in cybersecurity in 2025 and beyond.

AI’s advanced data analysis capabilities are being harnessed to identify and predict cyber threats, boosting early detection systems. ML algorithms are becoming more sophisticated, enabling them to recognize and adapt to new threats, enhancing cybersecurity defences over time. Real-time AI threat analysis is expected to improve response speed and accuracy, while ML advancements may lead to autonomous updates, reducing the need for manual intervention and allowing companies to do more with less by leveraging their human cybersecurity experts and their experience for the most complex situations.¹¹

As part of this, AI-driven security bots are likely to emerge, programmed to detect and neutralize threats proactively, marking a shift towards more self-sufficient cybersecurity systems. Key improvements include AI-powered threat detection that can swiftly identify patterns and anomalies, behavioural analysis to track user activity and flag suspicious deviations, and predictive analytics to forecast vulnerabilities and prioritize security measures. These advancements will enable organizations to move from reactive to proactive defence strategies even if additional human threat hunters can’t be found.¹²

October’s Cyber Security Awareness Month serves as a crucial reminder for all stakeholders to prioritize digital security, reinforce their efforts in protecting sensitive data, and help them stay ahead of potential attacks.

CYBR ETF: Diversified Investing in Cybersecurity

A cybersecurity ETF offers a great alternative to gaining exposure to this industry without being locked into any single security and without the hassle of hand-picking individual stocks. ETFs allow you to diversify by investing in multiple companies in multiple markets, ensuring that a single market shock won’t tank your portfolio.

Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR), invests in global companies involved in the cybersecurity industry. For more information, visit the fund page here: https://evolveetfs.com/cybr/.

Sources

“October is Cyber Security Awareness Month in Canada,” Government of Canada, July 22, 2024; https://www.getcybersafe.gc.ca/en/cyber-security-awareness-month
“The Biggest Data Breaches of the Year (2024),” Bluefin, July 10, 2024; https://www.bluefin.com/bluefin-news/biggest-data-breaches-year-2024/
Alspach, K., “10 Major Cyberattacks And Data Breaches In 2024 (So Far),” CRN, July 1, 2024; https://www.crn.com/news/security/2024/10-major-cyberattacks-and-data-breaches-in-2024-so-far?page=3
Trudell, C., “CDK Hackers Want Millions in Ransom to End Car Dealership Outage,” Bloomberg, June 21, 2024; https://www.bloomberg.com/news/articles/2024-06-21/cdk-hackers-want-millions-in-ransom-to-end-car-dealership-outage
Gorrivan, C., Murphy, M. & Ford, B., “Hackers Demand as Much as $5 Million From Snowflake Clients,” Bloomberg, June 17, 2024; https://www.bloomberg.com/news/articles/2024-06-17/hackers-demanding-as-much-as-5-million-from-snowflake-clients
Alspach, K., “10 Major Cyberattacks And Data Breaches In 2024 (So Far),” CRN, July 1, 2024; https://www.crn.com/news/security/2024/10-major-cyberattacks-and-data-breaches-in-2024-so-far?page=8
Bishop, K. & Kharpal, A., “CrowdStrike issue causes major outage affecting businesses around the world,” CNBC, July 19, 2024; https://www.cnbc.com/2024/07/19/crowdstrike-suffers-major-outage-affecting-businesses-around-the-world.html
“Crowdstrike’s Impact on the Fortune 500: An Impact Analysis,” Parametrix, July 25, 2024; https://cdn.prod.website-files.com/64b69422439318309c9f1e44/66a24d5478783782964c1f6f_CrowdStrikes%20Impact%20on%20the%20Fortune%20500_%202024%20_Parametrix%20Analysis.pdf
Mondou, A. & Magee, K., “All Hands On Deck: The Skyrocketing Demand for Canadian Cybersecurity Skills,” Innovating Canada, n.d.; https://www.innovatingcanada.ca/technology/technology-innovation-archive/all-hands-on-deck-the-skyrocketing-demand-for-canadian-cybersecurity-skills/
“Bridging the Cyber Skills Gap,” World Economic Forum, 2024; https://initiatives.weforum.org/bridging-the-cyber-skills-gap/home
Cooper, V., “Top 10 Cyber Security Trends and Predictions For 2024,” Splashtop, August 26, 2024; https://www.splashtop.com/blog/cybersecurity-trends-and-predictions-2024
“What is the future of cybersecurity?,” Field Effect, May 28, 2024; https://fieldeffect.com/blog/what-is-the-future-of-cyber-security

Source: Getty Images Credit: krisanapong detraphiphat

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Please read the prospectus before investing. The indicated rates of return are the historical annual compound total returns net of fees (except for figures of one year or less, which are simple total returns) including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated..

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

As Interest Rates Drop, Investors Flock Towards High-Dividend Equities like Utilities

Posted on September 4, 2024September 6, 2024 by Tedd Strazimiri

Utilities Typically Outperform During Periods of Declining Interest Rates

In the current interest rate environment, the Bank of Canada has already implemented three rate cuts in 2024, with more reductions expected in the coming months. As interest rates decline, fixed income yields also fall, prompting investors to seek alternative sources of stable income. This trend is particularly beneficial for high-yield dividend equities like utilities. Historically, this relationship has acted as a tailwind for utilities stocks as they outperform during periods of interest rate cutting. Below shows periods of interest rate decreases, and how the S&P / TSX 60 Index and Solactive Canada Utility Index (UTES Index) have performed during those times.

Zooming in on 2024, since markets started to price in June’s Bank of Canada overnight rate cuts, utilities have shown their inverse relationship to interest rates. As rates continue to come down, we expect utilities to grow higher.

Investing in the utilities sectors can offer a unique combination of stability, income, and growth potential—increasingly attractive qualities in uncertain market environments.

Why Invest in Utilities?

Defensive sector. Utilities are often considered defensive investments due to their resilience, even during economic downturns. The demand for their essential services remains steady, even amid market volatility. Unlike other sectors, which are prone to cyclical fluctuations, these industries benefit from inelastic revenue streams. This stability offers a degree of protection against the broader market’s ups and downs, making them a reliable choice for investors seeking to mitigate risks during challenging times.³
Stable revenues. Due to the essential nature of the services they provide, the revenue for most utilities is driven by long-term contracts, which offer consistent and predictable cash flows. For example, pipeline operators tend to derive most of their income from extended contracts that are indexed to inflation. This ensures stable income even as economic conditions fluctuate.⁴
High dividends. Utility companies are known for consistently paying high dividends to investors, a direct result of their reliable cash flows. Unlike sectors that must allocate significant resources to R&D or marketing, these companies primarily invest in maintaining and expanding essential infrastructure like electrical grids, pipeline networks, and telecom lines. This focus allows them to distribute more of their free cash flow as dividends, making them attractive options for income-seeking investors.⁵
Lower volatility. The stable revenue of the utilities sector typically provide lower stock price volatility compared to other equities, thanks to the inherent stability of their businesses. For example, a recent PricewaterhouseCoopers report found that in 2023, the telecommunications sector alone contributed $80.8 billion to the Canadian GDP (up over 5% from $76.7 billion in 2022) and supported nearly 782,000 jobs (up 8% from 724,000 a year earlier). This steady economic performance underscores the sector’s resilience, providing investors with a more predictable and stable investment option in a fluctuating market.⁶
Interest rate sensitivity. While the utilities sector may have lower stock price volatility, they are highly sensitive to interest rate changes due to their capital-intensive nature. As borrowing costs decrease, these companies often see an increase in profitability. With the Bank of Canada lowering its key interest rate in now back-to-back cuts (and a growing consensus amongst policymakers for additional rate cuts at future Bank of Canada meetings), Canadian utility and real estate stocks are expected to receive some of the biggest boosts from a lower rate environment.⁷ ⁸ ⁹

Investing in utilities with UTES ETF

Are you looking for investments with low volatility and stable revenue? Interested in ways to mitigate risks for your portfolio during challenging times?

The debut of the Evolve Canadian Utilities Enhanced Yield Index Fund (UTES ETF) reflects our commitment to offering investors exposure to the top Canadian utilities companies. By focusing on these sectors, the fund capitalizes on stable cash flows and high dividend yields while also positioning investors to benefit from ongoing energy infrastructure developments and the ever-increasing demand for robust communication networks.²

With UTES, you get simplified access to the top 10 Canadian utility companies in one accessible investment vehicle. UTES employs an active covered call program to give investors tax-efficient enhanced yield, and modest leverage (25%) to provide magnified returns.

For more information on UTES ETF, visit our website at evolveetfs.com/UTES.

Sources

Oberti, G., “Global M&A Trends in Energy, Utilities & Resources,” PwC, June 25, 2024; https://www.pwc.com/gx/en/services/deals/trends/energy-utilities-resources.html
Raghunath, A., “Pipeline to Prosperity: Invest in Enbridge and Pembina Stock,” Yahoo Finance, July 12, 2024; https://ca.finance.yahoo.com/news/pipeline-prosperity-invest-enbridge-pembina-205000232.html
Bouw, B., “Why this money manager is buying utilities and pipelines while cutting back on banks and tech,” The Globe and Mail, March 1, 2024; https://www.theglobeandmail.com/investing/globe-advisor/advisor-funds/article-why-this-money-manager-is-buying-utilities-and-pipelines-while-cutting/
Raghunath, A., “Pipeline to Prosperity: Invest in Enbridge and Pembina Stock,” Yahoo Finance, July 12, 2024; https://ca.finance.yahoo.com/news/pipeline-prosperity-invest-enbridge-pembina-205000232.html
“The Outlook for Canadian Telecoms,” Advisor.ca, June 24, 2024; https://www.advisor.ca/podcasts/the-outlook-for-canadian-telecoms
“Telecommunications Sector Directly Contributes Nearly $81 Billion to Canadian Economy and Supports Nearly 782,000 Jobs Across Industries, New Report Shows,” Canadian Telecommunications Association, June 17, 2024; https://canadatelecoms.ca/news/telecommunications-sector-directly-contributes-nearly-81-billion-dollars-to-canadian-economy-and-supports-nearly-782000-jobs-across-industries-new-report-shows/
Rendell, M. et al, “Bank of Canada lowers key interest rate to 4.5%, delivering back-to-back cuts,” The Globe and Mail, July 24, 2024; https://www.theglobeandmail.com/business/article-bank-of-canada-interest-rate-live-updates-july/
Rendell, M., “‘Clear consensus’ among Bank of Canada policymakers on need for more rate cuts if inflation keeps easing,” The Globe and Mail, August 7, 2024; https://www.theglobeandmail.com/business/article-bank-of-canada-interest-rate-cut-july-minutes/
Smith, F., “Canadian investors eye utilities, real estate stocks as BoC cuts rates,” Reuters, June 12, 2024; https://www.reuters.com/markets/rates-bonds/canadian-investors-eye-utilities-real-estate-stocks-boc-cuts-rates-2024-06-12/

Header image source: Getty Images Credit: Alif Aiman / 500px

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Please read the prospectus before investing. The indicated rates of return are the historical annual compound total returns net of fees (except for figures of one year or less, which are simple total returns) including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated..

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Canadian firm launches AI-powered ETF targeting AI investments

Posted on March 25, 2024March 26, 2024 by Veronica Carlasuc

HISA ETFs adjust to new era as OSFI liquidity rules take effect

Posted on January 31, 2024March 26, 2024 by Veronica Carlasuc

U Alberta Reveals New Cybersecurity Hub to Defend Against Cybercrime

Posted on November 10, 2023December 18, 2023 by Veronica Carlasuc

The University of Calgary has unveiled its new Cyber Assessment, Training, and Experimentation (CATE) Centre, a cutting-edge facility dedicated to the study of and defence against cybercrimes. This state-of-the-art center is capable of simulating various digital environments, possible threats, and defence strategies. It serves as Alberta’s inaugural hub for cyber safety and research, uniting industry experts and law enforcement.

CATE Centre, established through a private-public partnership, involves major players like U.S. defence contractor Raytheon and local cyber range provider Enfocom, as well as funding from the Alberta government.

This facility is at the forefront of innovative research and development efforts, essential for equipping the next generation of cybersecurity and privacy experts. The CATE Centre’s mission is to advance cyber resilience and cybersecurity expertise through collaboration and simulation, setting a significant precedent in the field.¹

Company Specific Updates

CrowdStrike Holdings Inc

CrowdStrike has once again been named a global leader in Frost & Sullivan’s 2023 report on Cloud-Native Application Protection Platforms. This marks the second consecutive time CrowdStrike has achieved this distinction.

Frost & Sullivan lauded CrowdStrike for its cloud security leadership, emphasizing CrowdStrike’s unified platform; robust, agentless CNAPP solution and seamless integration with major Cloud Service Providers (CSPs), facilitating scalability in response to evolving cloud environments; and the remarkable growth of CrowdStrike’s cloud security public cloud modules, which reached $296 million, a 70% YoY increase as of July 31, beating almost all competitors.³

Source: Crowdstrike Source: https://bit.ly/3SAEuny

Notably, this recognition coincides with the announcement that CrowdStrike surpassed a total of $1 billion in software sales through AWS Marketplace. This milestone underscores the strong partnership between CrowdStrike and Amazon Web Services (AWS), solidified in under six years. Since its debut on AWS Marketplace in 2017, CrowdStrike has experienced rapid growth (3,000%+ CAGR in sales), customer success, and larger average transactions than through other market channels, indicating its commitment to providing comprehensive protection for businesses navigating the cloud via CrowdStrike’s more than 20 integrations with AWS services.⁴

Okta Inc

In October, Okta reported a security breach in its support case management system, allowing unidentified threat actors to utilize stolen credentials from certain Okta clients. Importantly, this system is distinct from Okta’s main operational service, which remains unaffected. Okta promptly notified impacted customers and revoked session tokens to prevent misuse.

Source: Tiffany Hagler-Geard / Bloomberg / Getty images Source: https://cnb.cx/3SAKPPV

While Okta did not disclose the attack’s scale or timing, it’s worth noting that as of March 2023, they serve over 17,000 customers, managing around 50 billion users. The attack, characterized as sophisticated, involved the compromise of two Cloudflare employee accounts within the Okta platform, but it didn’t result in unauthorized access to customer data or systems.⁵

This breach reemphasized the company’s appeal to hackers, as it provides single sign-on (SSO) services for major global firms like GrubHub, Hewlett Packard, Lululemon, T-Mobile, and Zoom. In the wake of the breach, Okta’s stock price dropped by 8.1%, resulting in a market cap loss of over $2 billion.⁶

CYBR ETF: Diversified Investing in Cybersecurity

Portfolio Strategy and Activity

For the month, Booz Allen Hamilton made the largest contribution to the Fund, followed by CrowdStrike Holdings Inc and Varonis Systems Inc. The largest detractors to performance for the month were Okta Inc, followed by Blackberry Ltd and Darktrace Plc.

Sources

Toy, A., “Cybersecurity training, research centre opens at University of Calgary,” MSN.com, Octover 11, 2023; https://www.msn.com/en-ca/money/technology/cybersecurity-training-research-centre-opens-at-university-of-calgary/ar-AA1i08ox
Poireault, K., “Half of Small Businesses Hit by Cyber-Attack Over the Past Year,” Infosecurity Magazine, October 12, 2023; https://www.infosecurity-magazine.com/news/half-sme-hit-cyberattack-past-year/
“CrowdStrike Named Cloud Security Leader in Frost & Sullivan’s 2023 Frost Radar™: Cloud-Native Application Protection Platform,” CrowdStrike, October 30, 2023; https://ir.crowdstrike.com/news-releases/news-release-details/crowdstrike-named-cloud-security-leader-frost-sullivans-2023-0
“CrowdStrike is the First Cybersecurity ISV Founded for the Cloud to Exceed $1 Billion in AWS Marketplace Sales,” CrowdStrike, October 23, 2023; https://ir.crowdstrike.com/news-releases/news-release-details/crowdstrike-first-cybersecurity-isv-founded-cloud-exceed-1
“Okta’s Support System Breach Exposes Customer Data to Unidentified Threat Actors,” The Hacker News, October 21, 2023; https://thehackernews.com/2023/10/oktas-support-system-breach-exposes.html
Goswami, R., “Okta cybersecurity breach wipes out more than $2 billion in market cap,” CNBC, October 23, 2023; https://www.cnbc.com/2023/10/23/okta-hack-wipes-out-more-than-2-billion-in-market-cap.html

Evolve Launches Enhanced Yield Bond and Technology ETFs

Posted on October 4, 2023April 30, 2025 by Veronica Carlasuc

TORONTO, Oct. 4, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve” or the “Manager“) is pleased to announce that Evolve Enhanced Yield Bond Fund (“BOND“) and Evolve NASDAQ Technology Enhanced Yield Index Fund (“QQQY“, and together, the “Funds“) have closed an initial offering of units and will begin trading on the Toronto Stock Exchange (“TSX“) today under ticker symbols BOND and QQQY, respectively.

BOND will invest primarily in fixed income ETFs. Evolve has waived the management fee payable on the units of BOND from the date of the prospectus until March 31, 2024. BOND will provide investors with a low-cost fixed income solution that will seek to deliver attractive monthly income and long-term capital appreciation by utilizing an active covered call strategy.

QQQY seeks to replicate, to the extent reasonably possible and before fees and expenses, the performance of the Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index, or any successor thereto (“the Index“). The Index consists of a selection of securities in the Nasdaq-100 Index® which must be classified as a “technology company” (i.e., any company classified under the “technology industry”) according to the Industry Classification Benchmark (ICB). QQQY will provide investors with access to the Index while seeking to deliver attractive monthly income and long-term capital appreciation by utilizing an active covered call strategy.

To enhance yield, as well as mitigate risk and reduce volatility, the Funds will employ a covered call option writing program at the discretion of the Manager. The level of covered call option writing may vary based on market volatility and other factors.

About Evolve Funds Group Inc.

With over $7 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

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¹Target Yield calculated as the expected dividend amount, annualized and then divided by the current market price.

Commissions, trailing commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. Please read the prospectus before investing. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to the ETF and mutual fund. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units. Investors should monitor their holdings, as frequently as daily, to ensure that they remain consistent with their investment strategies.

Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

SOURCE Evolve ETFs

For further information: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT: Keith Crone, kcrone@evolveetfs.com, 416.966.8716

The 5 Weirdest and Wildest AI Innovations You’ve Never Heard Of

Posted on September 29, 2023September 29, 2023 by Veronica Carlasuc

The introduction of OpenAI’s ChatGPT in late 2022 was a sea change for Big Tech, opening the floodgates of both innovation and investment in AI, machine learning, and generative applications.

In September, Amazon became just the latest Big Tech player to enter the generative AI space with their announcement of a $4 billion investment to take a minority stake in AI startup Anthropic, which was founded by former OpenAI employees. Anthropic will develop its own generative AI model, called Claude, using Amazon Web Services for both cloud-computing resources and machine learning hardware for training and deployment. Anthropic’s Claude will offer similar services to Microsoft-backed ChatGPT and Google’s Bard.1

By now, we’ve all heard the statistics about AI spending and how this specific type of technology is expected to change the world.

International Data Corporation (IDC) projects that by 2026, global spending on artificial intelligence will be north of $300 billion, when just two years ago, total spending was less than $100 billion.2

Companies like Mercedes-Benz, Strabag, and Coca-Cola are already harnessing AI to boost efficiency, reduce costs, and enhance security across their manufacturing processes.3 And tech giants are working to incorporate AI into every aspect of the business and their consumer offerings. Apple, for example, is working on an AI-powered health coach called Quartz that will help users improve their fitness, diet, sleep habits, manage health conditions like diabetes, and even give them feedback on their emotional state.4

Projections of consumer spending on generative AI software place the field at $81 billion by 2027—up from $1 billion in 2022.5 PwC suggests that the impact of AI could see global GDP up by 14% over current figures, adding $15.7 trillion to the global economy by 2030.6

Okay—so we’ve heard all of that. We expect all of that. But what is AI doing to change our lives today? What about the novel—even the downright weird—applications of AI that we haven’t heard about but which human creativity has nonetheless found a place for?

Let’s take a look at some of the unexpected and some of the wackier applications for this ground-breaking technology.

The Top 5 Weirdest AI Applications

AI can’t just be all about productivity, right? It’s about pushing the boundaries of imagination, too.

So, what about the wild or downright wackiest applications of AI that show off the best of the human imagination? Here are our ‘Top 5’ weirdest uses of artificial intelligence.

AI Fortune Tellers: Artist and MIT-trained roboticist Alexander Reben has trained an AI on thousands of inspirational quotes to build an algorithm designed to output generic, fortune cookie-style messages. While he succeeded, even Reben himself concedes that the messages the AI outputs can be “dark” and often “weird.”⁷

AI Perfumers: IBM and 220-year-old German fragrance house Symrise have collaborated on an AI called Philyra (Greek for “accompaniment of creation”) to introduce the first AI-designed fragrances to the global market. Philyra uses a giant data set of fragrance formulas, fragrance families (e.g., fruity, flowery, etc.), and historical fragrance trends to create fragrances.⁸ These can even be micro-targeted, such as the fragrance Philyra designed and Symrise launched in Brazil aimed at Brazilian male millennials.⁹ IBM and Symrise recently released Philyra 2.0, an upgraded version of their perfumer AI that can now develop fragrances with renewable as well as biodegradable raw materials.¹⁰

AI Toothbrush: Oral-B now offers consumers the Genius X electric toothbrush. Powered by AI, this $220 toothbrush connects to an app on your phone via Bluetooth. The toothbrush comes equipped with a learning algorithm that tracks and adapts to the brushing behaviour of users so it can better help to clean and protect teeth.¹¹

AI-Powered Beehives: Beewise, an Israeli startup, has used AI to redesign and upgrade the traditional beekeeper’s hive with the goal of saving dwindling bee populations. Beewise’s redesigned hive, dubbed Beehome, includes robotics, computer vision, and AI monitoring to gauge bees’ needs in real time. The company claims their AI-powered hives increase pollination rates and honey production; detect and defend against threats to the colony such as pesticides; thermally regulate the hive for ideal conditions; and protect against fires, floods, and bee predators like wasps and hornets.¹²

AI Judges for Beauty Contests: Way back (in AI terms, at least), in 2016, startup Beauty.ai launched the first beauty contest judged by artificial intelligence. Evaluating user-submitted selfies against criteria such as youthfulness, skin quality, and fascial symmetry and proportionality, the AI algorithm aimed to choose the fairest of them all compared against a database of models and actors.¹³

By reflecting on these intriguing (and sometimes odd) ways AI is being adopted, we hope you’ll be better equipped to embrace AI’s potential while also remaining mindful of its ethical implications.

Investing in FANGMA: The TECH ETF

In the current stock market, it’s hard to ignore the prominence of the FANGMA tech giants. These six influential companies have such a significant impact on advanced technologies and popular consumer services that it’s highly likely you, along with billions of others, use their offerings on a daily basis. However, the soaring share prices of these companies might discourage investors from individually incorporating all of them into their portfolios.

With the Evolve FANGMA Index ETF (TECH ETF), investors gain exposure to all six companies – Facebook, Amazon, Netflix, Google, Microsoft and Apple – for a reasonable unit price.

For more information about the Evolve FANGMA Index ETF (TECH ETF) or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Sources

Napolitano, E., “Amazon invests $4 billion in Anthropic startup known for ChatGPT rival Claude,” CBS News, September 25, 2023; https://www.cbsnews.com/news/anthropic-amazon-4-billion-investment-ai-startup-claude-chatgpt/
Jyoti, R. & Kuppuswamy, R., “Create More Business Value from Your Organizational Data Embrace Organic Integration of AI across the Business,” IDC, February 2023, https://pages.dataiku.com/report-idc-2023
Althoff, J., “The era of AI: How the Microsoft Cloud is accelerating AI transformation across industries,” Microsoft, Apr 24, 2023; https://blogs.microsoft.com/blog/2023/04/24/the-era-of-ai-how-the-microsoft-cloud-is-accelerating-ai-transformation-across-industries/
Malik, A., “Apple is reportedly developing an AI-powered health coaching service,” TechCrunch, April 25, 2023; https://techcrunch.com/2023/04/25/apple-is-reportedly-developing-an-ai-powered-health-coaching-service/
Krause, R., “AI Stocks: Tech Giants, Cloud Titans, Chipmakers Battle for An Edge,” Investor’s Business Daily, July 24, 2023; https://www.investors.com/news/technology/artificial-intelligence-stocks/
“Sizing the prize What’s the real value of AI for your business and how can you capitalise?”, PwC, n.d.; https://www.pwc.com/gx/en/issues/analytics/assets/pwc-ai-analysis-sizing-the-prize-report.pdf
Holley, P., “The bizarre thing that happens when artificial intelligence tells people their fortunes,” The Washington Post, October 15, 2018; https://www.washingtonpost.com/technology/2018/10/15/bizarre-thing-that-happened-when-roboticist-trained-ai-tell-someone-their-fortune/
“Breaking new fragrance ground with Artificial Intelligence (AI): IBM Research and Symrise are working together,” Symrise, October 24, 2018; https://www.symrise.com/newsroom/article/breaking-new-fragrance-ground-with-artificial-intelligence-ai-ibm-research-and-symrise-are-workin/
Wintermaier, P., “Symrise and IBM: New Fragrances Created by AI,” Harvard Business School digital initiative, December 4, 2019; https://d3.harvard.edu/platform-digit/submission/symrise-and-ibm-new-fragrances-created-by-ai/
“Makes perfect scents: Symrise presents version 2.0 of its AI Philyra at WPC in Miami,” Symrise, June 29, 2023; https://www.symrise.com/newsroom/article/makes-perfect-scents-symrise-presents-version-20-of-its-ai-philyra-at-wpc-in-miami/
Peters, J., “Oral-B’s new $220 toothbrush has AI to tell you when you’re brushing poorly,” The Verge, October 19, 2025; https://www.theverge.com/circuitbreaker/2019/10/25/20932250/oral-b-genius-x-connected-toothbrush-ai-artificial-intelligence
Press, G., “Robotic Beehive Using AI To Save The Bees And Global Food Supply,” Forbes, May 19, 2022; https://www.forbes.com/sites/gilpress/2022/05/19/robotic-beehive-using-ai-to-save-the-bees-and-global-food-supply/
Lubin, G., “Here are the winners of the first beauty contest judged by AI,” Business Insider, August 26, 2016; https://www.businessinsider.com/beauty-contest-judged-by-ai-winners-2016-8

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Evolve Plans to Launch Low-Cost Enhanced Yield Bond ETF on October 4, 2023

Posted on September 28, 2023 by Veronica Carlasuc

TORONTO, Sept. 28, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve” or the “Manager“) is pleased to announce that it has filed a final prospectus for the Evolve Enhanced Yield Bond Fund (“BOND” or the “Fund“). BOND is expected to begin trading on Wednesday, October 4, 2023, on the Toronto Stock Exchange (“TSX“), subject to TSX approval.

Evolve has waived the management fee payable on the units of BOND from the date of the prospectus until March 31, 2024. BOND will provide investors with a low-cost fixed income solution that will seek to deliver attractive monthly income and long-term capital appreciation by utilizing an active covered call strategy.

“Market conditions over the past year have been particularly challenging for yield strategies, leading many investors to seek new solutions,” said Raj Lala, President and CEO at Evolve. “We are pleased to introduce BOND to investors that are looking to earn higher yield in their fixed income portfolios. This fund is a great complement to our existing suite of covered call ETFs, by providing enhanced income, tax efficient yield and helping cushion downside risk.”

BOND will invest primarily in fixed income ETFs. To enhance yield, as well as mitigate risk and reduce volatility, BOND will employ a covered call option writing program at the discretion of the Manager. The level of covered call option writing may vary based on market volatility and other factors. The Manager believes that option writing may have potential to enhance yield and is an effective way to help lower the level of volatility for an investor and potentially improve returns.

The TSX ticker symbol for the Hedged Units (CAD$) of the Fund is “BOND“.

About Evolve Funds Group Inc.

Join us on social media: Twitter | LinkedIn | Facebook | Youtube

SOURCE Evolve ETFs

For further information: CONTACT INFORMATION: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT: Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Opportunities and Challenges in Cybersecurity Decade Ahead

Posted on September 26, 2023December 18, 2023 by Veronica Carlasuc

So far in 2023, the cybersecurity sector has faced some challenges that have impacted investment and growth within the industry.

Despite this, however, the growing importance of robust cybersecurity measures, coupled with the increasing adoption of digital technologies across sectors, presents significant opportunities for growth. This means the long-term outlook for the cybersecurity industry remains positive.

The cybersecurity industry is poised for significant growth over the next decade. The global cybersecurity market is projected to experience substantial expansion, fueled by the integration of advanced technologies such as IoT, machine learning, and cloud-based systems.

Challenges Confronting the Cybersecurity Sector

According to market research reports, the first half of 2023 saw a decline in overall investment in the cybersecurity sector compared to the previous year. Funding rounds and venture capital investments showed a more cautious approach from investors, leading to a decrease in the total capital raised.

According to Pinpoint Search Group, cybersecurity companies raised $1.9 billion through 97 funding rounds in Q2, down 35% from the $2.9 billion raised in Q1. It was also down 55% for the same quarter year-over-year. Financing deals and mergers and acquisition (M&A) were also down in Q2.¹

However, it’s worth noting that the decline doesn’t indicate a lack of interest or potential in the industry. Indeed, market research firm IDC expects that total spending on cybersecurity products and services across the economy will pass $219 billion this year, representing growth of 13% from 2022.² Rather, the investment slowdown reflects a changing investment landscape.

Economic uncertainty and recent spiking inflation have had impacts on the cybersecurity sector, too. Inflationary pressures can lead businesses and investors alike to reduce their overall cybersecurity spending, despite the vulnerabilities this opens up.

Within the last year, the number of victims paying ransomware increased from 21% to 85%. In 2022 alone, attackers extorted $456.8 million from victims. Total costs of cybercrime are predicted to be $8 trillion this year and $10.5 trillion by 2025, with 60% of companies going out of business within six months of a cyberattack.³ So clearly, despite an investment slowdown, the threat posed by cyber attack isn’t going anywhere.

While the year-to-year differences in investment and VC funding in the cybersecurity sector reflect a more cautious approach from investors, given these statistics it’s important to consider the broader context.

The industry’s fundamental importance in an increasingly digital world hasn’t changed. And coupled with the ongoing evolution of cyber threats—particularly the peril of AI-enhanced threat actors as well as the promise of AI-assisted cybersecurity—presents opportunities for continued growth and innovation.

In the near term, industry observers expect to see investment rebound in the second half of 2023 and into 2024, with M&A activity picking up, as well.⁴

And in the longer term, as threat actors become more sophisticated and cyber incidents grow in scale and complexity, the need for continuous investment in research and development, innovative technologies, and talent acquisition in this sector will only grow.

Growth Projected for Cybersecurity Over the Next Decade

The cybersecurity industry is poised for significant growth over the next decade, with the critical importance of robust cybersecurity driving demand for innovative solutions and services.

The global cybersecurity market is projected to witness remarkable expansion, reaching nearly $425 billion with a CAGR of 13.8% by 2030 according to some estimates. The rise of enterprise security solutions in manufacturing, banking, financial services, and insurance (BFSI), and healthcare are expected to be significant factors in driving this growth.⁵

Other industry watchers project even greater success for the cybersecurity market in the next ten years. According to Market.us, the global cybersecurity market will be worth more than $534 billion (up from $193 billion in 2022), driven by the needs of e-commerce platforms, IoT devices, cloud security, and AI.⁶

Forecasts also project substantial growth in various subsegments of the cybersecurity sector. The industrial cybersecurity market, for instance, is expected to surpass $40 billion by 2030, more than double the current size of the segment. The growing adoption of IoT and cloud technologies in industrial settings has contributed to the rising demand for industrial cybersecurity solutions, as threat actors increasingly target industrial control systems and operational technology.⁷

The cybersecurity industry offers immense growth opportunities fueled by escalating cyber threats and the increasing recognition of the importance of protecting sensitive information. By capitalizing on emerging technologies, focusing on industry-specific solutions, and fostering collaborations, organizations can position themselves to thrive in this rapidly evolving market and effectively address the cybersecurity challenges of the next decade.

Diversified Investing in Cybersecurity with CYBR ETF

Sources

Vijayan, J., “Analysts: Cybersecurity Funding Set for Rebound,” Dark Reading, July 10, 2023; https://www.darkreading.com/operations/analysts-cybersecurity-funding-uptick-2h-2023
“New IDC Spending Guide Forecasts Worldwide Security Investments Will Grow 12.1% in 2023 to $219 Billion,” IDC, March 16, 2023; https://www.idc.com/getdoc.jsp?containerId=prUS50498423
“The impact of inflation on cybersecurity,” RFA, June 30, 2023; https://rfa.com/news-and-insights/thought-leadership/the-impact-of-inflation-on-cybersecurity/
Vijayan, J., “Analysts: Cybersecurity Funding Set for Rebound,” Dark Reading, July 10, 2023; https://www.darkreading.com/operations/analysts-cybersecurity-funding-uptick-2h-2023
“Global Cyber Security Market Size [2023-2030] to Reach USD 424.97 Billion and Exhibit a CAGR of 13.8%,” Fortune Business Insights, April 19, 2023; https://www.globenewswire.com/news-release/2023/04/19/2649842/0/en/Global-Cyber-Security-Market-Size-2023-2030-to-Reach-USD-424-97-Billion-and-Exhibit-a-CAGR-of-13-8.html
“Cyber Security Market Size Is Valued At US$ 534 Bn by 2032: Data Analysis by Experts at Market.Us,” GlobalNewswire, March 23, 2023; https://www.globenewswire.com/en/news-release/2023/03/23/2632956/0/en/Cyber-Security-Market-Size-Is-Valued-At-US-534-Bn-by-2032-Data-Analysis-by-Experts-at-Market-Us.html
Kovacs, E., “Industrial Cybersecurity Market Expected to Soar in Next Decade,” SecurityWeek, October 18, 2022; https://www.securityweek.com/industrial-cybersecurity-market-expected-soar-next-decade/

Evolve Announces September 2023 Distributions for Certain Evolve Funds

Posted on September 21, 2023September 21, 2023 by Veronica Carlasuc

TORONTO , Sept. 21, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve”) is pleased to announce the distribution amounts per unit (the “Distributions”) for certain funds (the “Evolve Funds”), for the period ending September 30, 2023, as indicated in the table below.

The ex-dividend date for the Distributions for all Evolve Funds is anticipated to be September 28, 2023. The record date for the Distributions is anticipated to be September 29, 2023, for all Evolve Funds except for the High Interest Savings Account Fund (“HISA”), US High Interest Savings Account Fund (“HISU.U”), Premium Cash Management Fund (“MCAD”) and US Premium Cash Management Fund (“MUSD.U”). The record date for the Distributions for HISA, HISU.U, MCAD and MUSD.U is anticipated to be September 28, 2023. Unitholders of Evolve Funds on record date will receive cash distributions payable on or about October 10, 2023.

Evolve Funds	Ticker Symbol	Distribution per Unit	Frequency
Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund	BANK	$0.09300	Monthly
Evolve Global Materials & Mining Enhanced Yield Index ETF	BASE BASE.B	$0.20000 $0.20000	Monthly Monthly
Evolve US Banks Enhanced Yield Fund	CALL CALL.B CALL.U	$0.12500 $0.12500 USD $0.12500	Monthly Monthly Monthly
Evolve Automobile Innovation Index Fund	CARS CARS.B CARS.U	$0.02000 $0.02000 USD $0.02000	Monthly Monthly Monthly
Evolve Cyber Security Index Fund	CYBR CYBR.B CYBR.U	$0.01000 $0.01000 USD $0.01000	Monthly Monthly Monthly
Evolve Cloud Computing Index Fund	DATA DATA.B	$0.01000 $0.01000	Monthly Monthly
Evolve Active Canadian Preferred Share Fund	DIVS	$0.07000	Monthly
Evolve Active Global Fixed Income Fund	EARN	$0.12500	Monthly
Evolve European Banks Enhanced Yield ETF	EBNK EBNK.B EBNK.U	$0.06000 $0.06000 USD $0.06000	Monthly Monthly Monthly
Evolve Innovation Index Fund	EDGE EDGE.U	$0.00500 USD $0.00500	Quarterly Quarterly
Evolve S&P 500® Enhanced Yield Fund	ESPX ESPX.B ESPX.U	$0.15500 $0.15500 USD $0.15500	Monthly Monthly Monthly
Evolve S&P/TSX 60 Enhanced Yield Fund	ETSX	$0.16000	Monthly
Evolve Active Core Fixed Income Fund	FIXD	$0.05500	Monthly
Evolve E-Gaming Index ETF	HERO	$0.05000	Quarterly
High Interest Savings Account Fund	HISA	$0.20327	Monthly
US High Interest Savings Account Fund	HISU.U	USD $0.42405	Monthly
Evolve Future Leadership Fund	LEAD LEAD.B LEAD.U	$0.10500 $0.10500 USD $0.10500	Monthly Monthly Monthly
Evolve Global Healthcare Enhanced Yield Fund	LIFE LIFE.B LIFE.U	$0.16000 $0.16000 USD $0.16000	Monthly Monthly Monthly
Premium Cash Management Fund	MCAD	$0.38897	Monthly
US Premium Cash Management Fund	MUSD.U	USD $0.41050	Monthly
Evolve NASDAQ Technology Index Fund	QQQT QQQT.B QQQT.U	$0.03000 $0.03000 USD $0.03000	Quarterly Quarterly Quarterly
Evolve FANGMA Index ETF	TECH TECH.B TECH.U	$0.00160 $0.00160 USD $0.00160	Monthly Monthly Monthly

Distributions for the funds will vary from period to period. For further information regarding the Distributions, please visit www.evolveetfs.com

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds. ETFs and mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units. Please read the prospectus before investing.

About Evolve Funds Group Inc.

With over $7 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) index-based income strategies; (ii) long term investment themes; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook | Youtube

The S&P 500® Index and the S&P/TSX 60 Index are each a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI“), and has been licensed for use by the Evolve Funds. S&P® and S&P 500® are trademarks of S&P Global, Inc. or its affiliates (“S&P“); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones“). It is not possible to invest directly in an index. The Evolve Funds are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, “S&P Dow Jones Indices“). S&P Dow Jones Indices does not make any representation or warranty, express or implied, to the owners of the Evolve Funds or any member of the public regarding the advisability of investing in securities generally or in the Evolve Funds particularly or the ability of the S&P 500® Index and the S&P/TSX 60 Index to track general market performance. Past performance of an index is not an indication or guarantee of future results. S&P Dow Jones Indices’ only relationship to the Evolve Funds with respect to the S&P 500® Index and the S&P/TSX 60 Index is the licensing of the Indexes and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The S&P 500® Index and the S&P/TSX 60 Index are determined, composed and calculated by S&P Dow Jones Indices without regard to the Evolve Funds. S&P Dow Jpones Indices have no obligation to take the needs of the Evolve Funds or the owners of the Evolve Funds into consideration in determining, composing or calculating the S&P 500® Index and the S&P/TSX 60 Index. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of the Evolve Funds. There is no assurance that investment products based on the S&P 500® Index or the S&P/TSX 60 Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an “investment adviser, commodity trading advisory, commodity pool operator, broker dealer, fiduciary, promoter” (as defined in the Investment Company Act of 1940, as amended), “expert” as enumerated within 15 U.S.C. s. 77k(a) or tax advisor. Inclusion of a security, commodity, crypto currency or other asset within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, commodity, crypto currency or other asset, nor is it considered to be investment advice or commodity trading advice.

S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P 500® INDEX AND THE S&P/TSX 60 INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY THE EVOLVE FUNDS, THE OWNERS OF THE EVOLVE FUNDS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500® INDEX AND THE S&P/TSX 60 INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. S&P DOW JONES INDICES HAS NOT REVIEWED, PREPARED AND/OR CERTIFIED ANY PORTION OF, NOR DOES S&P DOW JONES INDICES HAVE ANY CONTROL OVER, THE LICENSEE PRODUCT REGISTRATION STATEMENT, PROSPECTUS OR OTHER OFFERING MATERIALS. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND THE EVOLVE FUNDS OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.

SOURCE Evolve ETFs

For further information:

Evolve ETFs, info@evolveetfs.com, t.416.214.4884, tf. 1.844.370.4884; Media Contact: Keith Crone, kcrone@evolveetfs.com, 416.966.871

Navigating Turbulence: Challenges and Triumphs in the Electric Vehicle Industry

Posted on September 15, 2023December 18, 2023 by Veronica Carlasuc

During August, the electric vehicle (EV) industry found itself navigating a turbulent landscape, characterized by a crescendo of activities both inspiring and challenging. The month marked a time of strained progression for giants in the Chinese automotive sector including BYD and NIO.¹Despite their commendable strides in technological advancements and market penetration earlier in the year, these companies faced a hiccup in their growth trajectory, largely attributed to a significant economic downturn in China, a crucible for the EV market.

As the companies grapple with an unpredictable home market, questions arise regarding their capacity to maintain the momentum in challenging established players such as Tesla, particularly at a time when the industry is faced with calls to uphold fair competition and abandon “abnormal pricing”.² A reflection of this challenge is vividly seen in the woes of charging infrastructure providers like Blink Charging and Fuel Cell Energy, which recorded a decline of around 30% in August, reacting to Tesla’s agreements with other EV manufacturers to standardize their charging systems. Even as they draw from their impressive financial performances, with BYD having noted a remarkable 204.68% surge in net profit in their most recent earnings.³

Across the ocean, American automakers have not been left behind in this aggressive race to dominate the EV market. Ford, reaping from its endeavors to amplify production and minimize the costs associated with battery minerals, has slashed the prices of its F-150 Lightning pickup significantly. This move not only delineates the efficacy of cost-saving initiatives but also potentially marks a turning point in making EVs more affordable to the average consumer.⁴

As companies vie for the top spot in a hotly contested market, the competition has spilled to the tracks with Rimac Nevera dethroning Tesla Model S in the Nurburgring race by establishing a new lap record. This instance not only underscores the fierce competition but also showcases the epitome of EV technology and the boundaries it is pushing in terms of performance. As companies strive to outdo each other on the track, consumers stand to benefit from the trickle-down effect of this technology into mainstream production vehicles.⁵

Specific Updates on Companies

Nvidia

Over the past month, Nvidia has continued to solidify its standing as a central player not only in the tech industry but increasingly in the automotive sector as well, notably amidst the expansive growth witnessed in the electric car market. In the second quarter ending on July 30, the company reported impressive earnings of $2.70 per share, significantly surpassing the expected $2.09 per share according to Refinitiv. This bullish performance, which saw revenue hitting $13.51 billion against an expected $11.22 billion, can be attributed to Nvidia’s deep foray into the generative AI boom, underscored by their cutting-edge graphics processing units (GPUs) that find pivotal applications in AI chips like the A100 and H100 series.⁶

These chips are essential in powering AI applications, including those pivotal in autonomous vehicle technologies and advanced driver assistance systems, which are becoming staples in electric cars. The surge in demand for more technologically adept electric vehicles, which house between 1,400 and 3,000 semiconductor chips for various functionalities, underscores Nvidia’s crucial role in the burgeoning sector. With the board of directors authorizing a substantial $25 billion in share buybacks after purchasing $3.28 billion in shares during the quarter, Nvidia is showcasing a robust financial health and confidence in its trajectory. As the firm projects a fiscal third-quarter revenue of about $16 billion, translating to a 170% growth year-on-year, investors can watch this space with a keen eye, bearing in mind the pivotal role Nvidia is playing in the tech-augmented future of the automotive industry.⁷

Nio Inc

Chinese electric vehicle giant Nio faced a challenging second quarter, as reflected in its recent earnings report. Posting a loss of $835.1 million, more than double its loss from the same period last year, the firm struggled amidst a transition to a new vehicle platform and an economic slowdown in China, exacerbated by a disappointing gross margin of 6.2%, a significant drop from 16.7% a year ago. Despite revenues of 8.77 billion yuan ($1.21 billion), the firm fell short of the 9.25 billion yuan anticipated by Wall Street, resulting in a share dip of 5% in midday trading following the release of its Q2 report. However, not all is grim for Nio; the recent launch of revamped models on its “NT2.0” platform shows signs of rejuvenating the company’s prospects, with July witnessing a robust 20,462 vehicle deliveries, a figure nearly on par with the entire second quarter’s delivery of 23,520 units. This recent uptick suggests that while Nio navigates a period of transition, characterized by substantial discounting on outgoing models, its refreshed lineup might be starting to gain traction.⁸

Investing in Automobile Innovation with CARS ETF

The Evolve Automobile Innovation Index Fund returned -13.92% during the month of August. For the month, EOS Energy made the largest contribution to the Fund, followed by Nvidia and SiTime. The largest detractors to performance for the month were Plug Power, followed by Nio and Quantumscape.

Sources:

Mackey Frayer, J., & Gao, L. (2023, July 18). Chinese electric vehicle makers lead the world, rivaling U.S. pioneers. NBCNews.com. https://www.nbcnews.com/news/world/chinese-electric-vehicle-makers-lead-world-rivaling-us-pioneers-rcna88990
Chiang, S. (2023, August 29). Shares of BYD jump after Chinese EV maker posts 200% surge in first half profit. CNBC. https://www.cnbc.com/2023/08/29/shares-of-chinas-byd-jump-after-ev-maker-posts-200percent-rise-in-h1-profit.html
(2023, July 7). Tesla and Chinese Rivals Signal Truce in Brutal EV Price War. Bloomberg.com. https://www.bloomberg.com/news/articles/2023-07-06/tesla-chinese-carmakers-sign-fair-competition-pledge-after-cuts
Rosevear, J. (2023a, July 17). Ford cuts prices on its electric F-150 lightning pickups by as much as $10,000. CNBC. https://www.cnbc.com/2023/07/17/ford-f-150-lightning-ev-price-cuts.html
Kothari, S. (2023, August 18). Rimac Nevera shatters Tesla’s Ev lap record at Nurburgring by 20 Seconds. InsideEVs. https://insideevs.com/news/682524/rimac-nevera-sets-nurburgring-lap-record/
(2023, August 23). Nvidia tops estimates and says sales will jump 170% This quarter, driven by demand for AI chips. CNBC. https://www.cnbc.com/2023/08/23/nvidia-nvda-earnings-report-q2-2024.html
Straughan, D. (2023, September 6). The semiconductor shortage explained: The auto industry’s Big Challenge (2023). Automoblog. https://www.automoblog.net/research/news/semiconductor-shortage-explained/
Rosevear, J. (2023b, August 29). NIO reports wider second-quarter loss amid China slowdown and product line revamp. CNBC. https://www.cnbc.com/2023/08/29/nio-earnings-q2-2023.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Harvard Researchers Harness the Power of Cloud Computing to Replicate Supercomputers

Posted on September 8, 2023December 18, 2023 by Veronica Carlasuc

Harvard researchers have harnessed Google’s public cloud infrastructure to replicate the performance of a supercomputer to aid their research study into heart disease treatments. This innovative use of cloud computing can act as a roadmap to assist other researchers lacking access to supercomputing power and alleviate the processing-related bottlenecks that can develop in cutting-edge research.

The study simulates a minimally invasive approach for unclogging arteries and eliminating blood clots and tumour cells in the circulatory system. The research team’s need for substantial computing power, usually found in supercomputers, exceeded their access. So the researchers collaborated with Citadel Securities and Google to replicate a supercomputer within the public cloud, eliminating access delays.

Transforming cloud infrastructure into a supercomputer requires software, networking, and hardware modifications. To achieve this feat, the team ran thousands of virtual machines on Google Cloud, employing extensively tuned code to reach 80% of the efficiency of dedicated supercomputers.

Source: https://w.media/harvard-researchers-harness-google-cloud-to-replicate-supercomputer-for-heart-disease-study/

While cloud platforms like Google Cloud are not inherently designed for such tasks, they are known for their reliability and accessibility. Google Cloud’s high configurability, high-performance computing capabilities in particular simplify and scale complex workloads, accelerating research discoveries.1

And in what could become a battle between leading cloud-based customer relationship management softwares, Microsoft’s Dynamics business (which includes software for sales, marketing, and customer service) reported remarkable 16% year-over-year revenue growth, reaching $5.44 billion. This growth rate outpaced Microsoft’s overall performance and most major products and services, second only to Server Products and Cloud Services, including Azure.

Dynamics now constitutes 2.5% of Microsoft’s total revenue, up from 2.2% two years ago, according to their recent annual report to investors. Salesforce—the larger competitor in this space and held by the Fund—holds an estimated 23.8% market share, while Microsoft Dynamics has grown to 5.3% and continues to expand.

Microsoft’s AI capabilities have prompted some companies to switch from Salesforce to Dynamics, as Dynamics 365 recently introduced generative artificial intelligence assistants. Microsoft Sales Copilot, an AI tool for drafting business emails, integrates seamlessly with Dynamics and Salesforce.

Affordability is another driver for switching to Dynamics, with Microsoft offering subsidies to prospective customers committed to Salesforce and assisting with consulting service costs. This dynamic growth in Microsoft’s cloud-based Dynamics business underscores its competitiveness in the market.2

Updates on Specific Companies

VMware Inc

In August, VMware unveiled a comprehensive suite of offerings within VMware Tanzu to empower customers to develop, deliver, and optimize applications across various cloud environments, including multi-cloud management.

The expanded Tanzu Application Platform introduces the VMware Tanzu Application Engine for enhancing customization for application teams. It also includes multi-cloud operations, a developer portal, enterprise developer experiences, and a platform engineer admin console.

VMware also introduced Tanzu Intelligence Services, which addresses the complexity of managing applications across clouds. It centralizes management, offering integrated ML/AI capabilities to optimize cost, performance, and security proactively. Innovations include VMware Tanzu with Intelligent Assist, Tanzu CloudHealth for cost savings, Tanzu Insights for troubleshooting, Tanzu Guardrails for governance, and Tanzu Transformer for app migration and modernization.

These offerings, combined with VMware Aria’s cloud management solutions, provide a robust toolkit for organizations aiming to navigate the evolving landscape of application development and cloud management.3

Microsoft Inc

Microsoft and KPMG announced a substantial expansion of their global partnership, focused on transforming professional services across several key areas, including workforce modernization, secure development, and the utilization of AI solutions. As part of the deal, KPMG has committed to investing billions in Microsoft cloud and AI services over the next five years, anticipating growth exceeding $12 billion.

This expanded alliance aims to enhance KPMG’s client engagements and improve the employee experience, emphasizing responsibility and trust. Microsoft’s cloud and Azure OpenAI Service will empower KPMG’s global workforce of 265,000, enabling them to provide faster analysis and strategic advice to clients, particularly the 2,500 joint clients they share with Microsoft.

KPMG will serve as an early access partner for Microsoft 365 Copilot and Azure OpenAI Service, piloting these technologies within their organization.

In key business areas like Audit, Tax, and Advisory, KPMG plans to infuse data analytics, AI, and Azure Cognitive Services to optimize processes, improve access to data, and provide more integrated solutions. The partnership also supports businesses in pursuing their ESG agendas, leveraging Microsoft’s sustainability and data management solutions.4

Investing in Cloud Computing with DATA ETF

If you’re interested in investing in a cloud computing ETF, consider the Evolve Cloud Computing Index Fund (DATA ETF), Canada’s first cloud computing ETF. DATA ETF invests primarily in equity securities of companies located domestically or internationally that have business operations in the field of cloud computing. To learn more about DATA ETF, please click here: https://evolveetfs.com/data/.

Portfolio Strategy and Activity

For the month, Intuit Inc made the largest contribution to the Fund, followed by VMware Inc and Amazon.com Inc. The largest detractors to performance for the month were Fortinet Inc, followed by Snowflake Inc and Datadog Inc.

Sources

Wheatley, M., “Harvard researchers clone supercomputer on Google Cloud,” SiliconANGLE, August 17, 2023; https://siliconangle.com/2023/08/17/harvard-researchers-clone-supercomputer-google-cloud/
Novet, J., “Microsoft is touting the size and growth rate of its Salesforce rival Dynamics,” CNBC, August 3, 2023; https://www.cnbc.com/2023/08/03/microsoft-discloses-scale-of-dynamics-software-in-annual-report.html
“VMware Expands Tanzu to Accelerate App Delivery at Enterprise Scale,” VMWare, August 22, 2023; https://news.vmware.com/releases/vmware-explore-2023-tanzu
“KPMG and Microsoft enter landmark agreement to put AI at the forefront of professional services,” Microsoft News Center, July 11, 2023; https://news.microsoft.com/2023/07/11/kpmg-and-microsoft-enter-landmark-agreement-to-put-ai-at-the-forefront-of-professional-services/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

U.S. Government’s $20 Million AI Cyber Challenge to Fortify U.S. Cybersecurity

Posted on September 5, 2023December 18, 2023 by Veronica Carlasuc

In August, the Biden administration introduced the AI Cyber Challenge, aiming to leverage AI to enhance and safeguard critical U.S. infrastructure from cyber threats using artificial intelligence.

This initiative, run through the Defense Advanced Research Projects Agency (DARPA), offers up to $20 million in prizes. It has garnered support from prominent AI companies such as Anthropic, Google, Microsoft, and OpenAI, which will contribute their technology to the competition.

Qualifiers are set for Spring 2024, followed by semi-finals at DEF CON 2024, where up to five top-scoring teams will each win $2 million and proceed to the final round at DEF CON 2025. The finals include a $4 million top prize for the team that provides the best security solution for essential software. All competitors will be required to open source their systems, promoting widespread use of their solutions.1

The announcement of this contest comes at the same time that the White House issued orders for federal agencies to strengthen their cybersecurity efforts and address shortcomings in implementing a 2021 executive order aimed at enhancing national cybersecurity. By the end of June, multiple federal departments and agencies had yet to fully adhere to critical security measures outlined in the executive order. National security adviser Jake Sullivan emphasized that this non-compliance exposed the U.S. government to cyber threats and eroded its role as a cybersecurity model.

Sullivan’s memo, directed to Cabinet secretaries, called on various departments (excluding the Pentagon) to be fully compliant with the executive order’s security requirements by year-end. Furthermore, agencies were required to submit a detailed implementation plan by the end of September.2

Updates on Specific Companies

Okta Inc

Okta, Inc. has unveiled Okta for Global 2000, a ground-breaking solution tailored to provide the largest organizations with the flexibility and automation required for managing their identity systems. Okta for Global 2000 addresses the intricate balance between centralization and decentralization within these organizations while maintaining stringent security measures and operational efficiency.

The complex technological needs of the Global 2000 demand an automated and neutral identity technology that adapts to their business strategies rather than confines them to a single platform. Okta for Global 2000 empowers executives with the technical ability to transition between centralizing users, decentralizing business elements for independent management, or delivering a hybrid model based on company needs.

Key features include flexible user management, automated identity actions, delegated control and autonomy, and seamless user experiences. Okta for Global 2000 also enables the integration of existing identity providers for acquisitions or subsidiaries without disrupting end-user experiences.3

This announcement comes at the same time Okta released Q2 financial results. For the quarter, total revenue was $556 million (up 23% year-over-year) and subscription revenue was $542 million (up 24% year-over-year).4

CrowdStrike Holdings, Inc.

CrowdStrike Holdings Inc. crushed earnings with performance driven by the momentum of AI. In the second quarter, CrowdStrike achieved a net income of $8.48 million, a significant turnaround from the $49 million loss in the previous quarter. Revenue surged by an impressive $200 million during this period, surpassing analyst predictions. Demonstrating their confidence, the company also raised its guidance to an impressive $3.04 billion.

cybr etf — Source: crowdstrike.com/blog/how-crowdstrike-machine-learning-model-maximizes-detection-efficacy-using-the-cloud/

At the core of CrowdStrike’s success is its AI-powered Falcon platform, which made its debut in 2013. This cutting-edge technology meticulously monitors and analyzes trillions of data points, safeguarding over 23,000 clients from potential security breaches. CEO George Kurtz attributes much of their revenue growth to this powerful platform. Notably, the Falcon platform contributed a substantial “well over” $500 million in recurring revenue, underscoring the undeniable effectiveness of AI in the realm of cybersecurity.

Varonis Systems Inc

Varonis Systems, Inc. has opened its first data center in the United Kingdom, situated in London, to support customers transitioning to Varonis’ SaaS (Software-as-a-Service) offering. This expansion aims to assist Varonis customers in achieving automated data security outcomes while adhering to U.K. data privacy regulations.

The new U.K. data center serves a dual purpose. Firstly, it enables Varonis customers to demonstrate compliance with national data protection laws, particularly the Data Protection Act, which governs the use of personal information by organizations, businesses, and government entities in the U.K. Secondly, it caters to the growing demand in the U.K., where many organizations must also adhere to the European Union’s General Data Protection Regulation (GDPR).

Customers, including hospitals, government departments, and businesses securing employee and customer Personally Identifiable Information (PII), will benefit from the ability to store data logs and analytics locally. Varonis’ comprehensive data visibility and automation capabilities will assist customers in ensuring responsible use of sensitive data.5

CYBR ETF: Diversified Investing in Cybersecurity

Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR), invests in global companies involved in the cyber security industry. For more information, visit the fund page here: https://evolveetfs.com/cybr/.

Portfolio Strategy and Activity

For the month, Okta Inc made the largest contribution to the Fund, followed by Qualys Inc and Varonis Systems Inc. The largest detractors to performance for the month were Fortinet Inc, followed by Booz Allen Hamilton Holding Corp and Trend Micro Inc.

Sources

Feiner, L., “Hackers to compete for nearly $20 million in prizes by using A.I. for cybersecurity, Biden administration announces,” CNBC, August 9, 2023; https://www.cnbc.com/2023/08/09/biden-admin-launches-hacking-challenge-to-use-ai-for-cybersecurity.html
Alvarez, P. & Lyngaas, S., “White House orders federal agencies to shore up cybersecurity, warns of potential exposure,” CNN, August 16, 2023; https://www.cnn.com/2023/08/16/politics/jake-sullivan-cybersecurity-warning/index.html
“Introducing Okta for Global 2000: Identity Solution to Give CEOs and Board of Directors Flexibility to Centralize or Decentralize their Business Strategy,” Okta, August 29, 2023; https://investor.okta.com/news-releases/news-release-details/introducing-okta-global-2000-identity-solution-give-ceos-and
“Okta Announces Second Quarter Fiscal Year 2024 Financial Results,” Okta, August 30, 2023; https://investor.okta.com/news-releases/news-release-details/okta-announces-second-quarter-fiscal-year-2024-financial-results
“Varonis Opens UK Data Center to Support SaaS Customers,” Varonis, August 29, 2023; https://ir.varonis.com/news-and-events/press-releases/press-release-details/2023/Varonis-Opens-UK-Data-Center-to-Support-SaaS-Customers/default.aspx

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Can Disney Rescue its Magic Kingdom?

Posted on August 30, 2023 by Veronica Carlasuc

Disney’s iconic empire faces challenges amid changing consumer behaviour and industry dynamics.

In Q3 reporting, Disney showed continued mixed results against low expectations and was significantly down from last year’s highs. However, there may be signs that Disney CEO Bob Iger’s plan to restructure and refocus the House of Mouse is working.¹

The company’s quarterly earnings report sheds light on its strategies for growth and transformation and offers a plan for the next half-decade that could see Disney right the ship and return to prosperity.

Parks, Cruises, and Streaming as Strategies for Growth

During the company’s recent earnings call, Iger underscored the significance of Disney’s theme parks and resorts, film studios, and streaming services to drive growth and value creation over the next five years.²

In their most recent earnings call, Disney reported theme park and cruise revenue was up 13% to $8.3 billion, with lower Walt Disney World in Florida attendance offset by growing attendance at Walt Disney theme parks in Shanghai and Hong Kong. And according to data from the most recent earnings report, upcoming Disney cruises are also 98% booked.³

The pivot towards the company’s theme parks and experiences division is a recognition on the part of Disney that these elements of its business are a unique offering in a world inundated with content.

And despite being a longstanding Disney attraction, there remains room to innovate in the theme park and resort space. Analysts have suggested unconventional ways of monetizing Disney’s cherished franchises like exclusive NFTs, metaverse tie-ins, and Apple’s Vision Pro headset that could offer novel avenues for enhancing guest experiences and revenue streams within the parks. Such innovations have the potential to redefine the theme park experience and attract a new visitor base.⁴

On the same earnings call, however, Iger conceded that Disney’s lack of a summer hit at the movies was “disappointing.” After all, it was the acquisition first of Pixar and, later, Marvel Studios that was instrumental in quintupling Disney’s market capitalization. Those studios yielded an almost unprecedented run of box office hits. But the movie-going landscape has changed post-pandemic, and Disney needs to recalibrate.

To that end, Disney’s film studios will focus on the allure of its iconic brands and franchises and aim to harness its beloved IP to roll out TV spinoffs, merchandise, and movie-tie in rides at its theme parks.⁵

At the same time, with direct-to-consumer revenues, including Disney+, ESPN+, and Hulu, increasing by 9%, Disney will look for ways to get more from those revenue streams.

While the allure of the streaming sector is undeniable, achieving profitability remains a formidable task. The growth seen in streaming was primarily due to price hikes. So, Disney is bumping up the monthly price of Disney+ and Hulu without commercials while expanding its ad-supported tiers into select markets in Europe and in Canada beginning November 1, to strike a balance between scaling subscriber bases and maintaining profitability.⁶

Disney TV Assets Hurt by Cord-Cutting

One area where Disney may shrink its presence to focus on more revenue-positive areas at the core of its business is its linear television offerings. It’s a strategic move that may make sense. Linear network revenues experienced a 7% decline to $6.7 billion in the most recent quarter, with operating income down 23% to $1.9 billion.⁷ And as recently as July, Iger said that Disney’s TV assets ABC, FX, and National Geographic “may not be core” to the business.⁸

However, this shift is not without its challenges. While shedding non-growth TV networks could provide cash and resources, it’s uncertain whether the networks will yield the desired profits, given their role in generating up to a third of Disney’s revenue.⁹

Separating these networks from the company also presents other hurdles, as content-sharing relationships between networks, Hulu, and Disney+ could be disrupted. Likewise, ABC and ESPN benefit from joint negotiations for sports rights and ad sales. And with ESPN, Disney is also exploring strategic partnerships to propel the transition of the sports network to a direct-to-consumer (DTC) model to address a seismic shift in consumer behavior, with viewers increasingly expecting tailored content on demand.¹⁰

In potentially divesting itself of TV assets, Disney will need to ensure that even if it sells the networks, it can maintain that source of content for its streaming platforms and safeguard its revenue streams.

Disney’s Bold Bet on Sports Gambling

One new revenue stream—an expected one for the family-friendly Disney brand—is ESPN’s $2 billion sports betting collaboration with PENN Entertainment. ESPN and PENN Entertainment, a gaming company, will co-launch a sportsbook called ESPN Bet.¹¹ This will mark ESPN’s transformation from merely covering sports to actively promoting sports-related gambling.

The partnership is a strategic response to the growing popularity of sports betting in the U.S. and a way for ESPN to ensure a new revenue stream. Cord-cutting has led to a decline in ESPN’s household reach, and rising sports rights costs, dwindling viewership, and the emergence of streaming giants like Apple and Amazon (who are also moving into sports coverage) have forced media companies, including ESPN, to explore new avenues for growth.

Beyond financial gains, the deal with PENN Entertainment aims to attract younger audiences and enhance brand loyalty. The launch of ESPN Bet is expected to amplify the network’s coverage of sports betting. New shows, online content, and in-broadcast odds graphics are on the horizon.

While this strategic move is poised to capitalize on the rising demand for betting-related content, ESPN faces potential reputational risks, particularly around problem gambling. Despite these challenges, however, ESPN’s foray into sports betting and strategic partnerships reflects the need for traditional media companies to remain relevant in the digital age. ¹²

Disney’s earnings report clearly reveals a company in transition, working to adapt to industry shifts while upholding its legacy. A renewed focus on parks and resorts, movies, and streaming, as well as new revenue sources from strategic partnerships and sports betting, will be key to the next act of Disney’s story.

Investing in Leadership: LEAD ETF

Looking for a way to access the leading companies of today, and the future companies of tomorrow?

The Evolve Future Leadership Fund (LEAD ETF) invests in a diversified portfolio of leading global companies across various sectors where clear trends are driving future growth. LEAD focuses on companies in four categories of leadership: Finance, Healthcare, Technology, and Media & Entertainment. This actively managed ETF has the added value of a covered call strategy applied on up to 33% of the portfolio, where the covered call options have the potential to provide extra income and help hedge long stock positions.

Four categories. One ETF. It’s time to take the LEAD.

For more information about the Evolve Future Leadership Fund (LEAD ETF) or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Sources

Marks, J., “Disney’s quarter wasn’t clean, but we see evidence that CEO Bob Iger’s turnaround plan is working,” CNBC, August 9, 2023; https://www.cnbc.com/2023/08/09/disney-quarter-wasnt-clean-but-we-see-evidence-ceo-bob-igers-plan-is-working.html
Whitten, S., “Disney posts mixed results for quarter plagued by streaming woes, restructuring costs,” CNBC, August 9, 2023; https://www.cnbc.com/2023/08/09/disney-dis-earnings-report-q3-2023.html
Blair, E., “Six takeaways from Disney’s quarterly earnings call,” NPR, August 9, 2023; https://www.npr.org/2023/08/09/1192746089/disney-earnings-call
Moses, L., “How Bob Iger’s big plan to shrink Disney could pay off and how it could backfire, according to industry insiders,” Business Insider, August 22, 2023; https://www.businessinsider.com/bob-iger-plan-smaller-disney-could-work-potential-pitfalls-2023-8
Blair, E., “Six takeaways from Disney’s quarterly earnings call,” NPR, August 9, 2023; https://www.npr.org/2023/08/09/1192746089/disney-earnings-call
Sherman, A., “Disney to raise price on ad-free Disney+ to $13.99 per month starting October 12,” CNBC, August 9, 2023; https://www.cnbc.com/2023/08/09/disney-to-raise-disney-price-for-ad-free-plan-in-september.html
Blair, E., “Six takeaways from Disney’s quarterly earnings call,” NPR, August 9, 2023; https://www.npr.org/2023/08/09/1192746089/disney-earnings-call
Rizzo, L. & Sherman, A., “Disney could soon sell its TV assets as Iger says business ‘may not be core’ to the company,” CNBC, July 13, 2023; https://www.cnbc.com/2023/07/13/disney-ceo-iger-opens-door-to-unloading-tv-assets.html
“The Walt Disney Company Reports Third Quarter And Nine Months Earnings For Fiscal 2023,” Walt Disney Company, August 9, 2023; https://thewaltdisneycompany.com/app/uploads/2023/08/q3-fy23-earnings.pdf
Sherman, A., “ESPN held talks with NBA, NFL and MLB in search for strategic partner, sources say,” CNBC, July 21, 2023; https://www.cnbc.com/2023/07/21/espn-had-talks-with-nba-nfl-in-search-for-strategic-partner.html
Sayre, K., “ESPN Strikes $2 Billion Sports-Betting Deal with Penn Entertainment,” The Wall Street Journal, August 8, 2023; https://www.wsj.com/articles/espn-penn-entertainment-sports-betting-deal-ac02b9a6
Dart, T., “Disney and ESPN bet big on entering gambling arena – but will they win?,” The Guardian, August 19, 2023; https://www.theguardian.com/sport/2023/aug/19/disney-espn-sports-betting-deal

Electric Vehicles Lead the Charge in Disruptive Innovations

Posted on August 28, 2023December 18, 2023 by Veronica Carlasuc

In today’s dynamic landscape defined by disruptive innovation, industries are undergoing transformative shifts driven by groundbreaking technologies. Electric vehicle manufacturers like Rivian are exceeding delivery projections, signaling the electric vehicle’s potential to reshape transportation. The cybersecurity sector adapts with new SEC rules, emphasizing material breach disclosures, while cloud computing rebounds through generative AI investments. Mergers like Microsoft’s acquisition of Activision Blizzard redefine e-gaming dynamics. Healthcare sees progress in genomics with experimental Alzheimer’s drugs. VR training and distributed servo drives revolutionize fintech and robotics. And 5G advancements redefine connectivity.

Amidst these disruptions, industries are reimagining traditional business models, demonstrating the pervasive influence of innovation in shaping the future.

Sector Specific Updates

Automobile Innovation

Rivian’s stock surged in early July on news that the electric vehicle manufacturer had surpassed analysts’ delivery forecasts for the quarter. Rivian achieved 12,640 electric vehicle deliveries in Q2, surpassing analysts’ projections of 11,000 units.

The company, known for producing electric R1T pickups and R1S SUVs, maintained its annual production goal of 50,000 units. In Q2, Rivian manufactured approximately 23,400 electric vehicles, including consumer models and electric vehicle delivery vans.

Rivian's new electric vehicle | Disruptive innovation — Source: RivianAutomotiveInc

Despite delays in EV production, Rivian has been actively managing expenses to preserve cash. The positive delivery figures coincided with Tesla’s announcement that it delivered 466,140 electric vehicles globally in Q2, also exceeding analyst estimates and boding well for the growth of these groundbreaking vehicles and the electric vehicle industry.¹

Cybersecurity

The Securities and Exchange Commission (SEC) is introducing new rules to enhance cybersecurity disclosure by public companies. Under these rules, companies must report “material” cybersecurity breaches within four days of determining their significance.

The SEC aims to protect investors by collecting relevant data promptly. However, companies are pushing back, citing concerns that the short reporting period could harm companies and risk opening them to exploitation by cybercriminals.

Nanobots | Disruptive innovation — Source: Cpomagazine.com

The rule change intends to clarify existing reporting criteria, as the SEC finds the current requirements for reporting cybersecurity events inconsistent. Along with the breach disclosure, the SEC seeks additional details like the timing of the incident and its material impact on the company. Management’s expertise in cybersecurity will also need to be disclosed. The final rules will take effect 30 days after publication in the Federal Register.²

Other Cybersecurity news

Cloud Computing

According to a new Mizuho Bank survey of CIOs, the rush to develop generative AI is boosting cloud demand and helping make up for the slowdown in demand seen in Q1 of this year.

IT budget cuts made in anticipation of a recession caused cloud deals to take 50% longer to close in Q1, with discounts of 30% to 40% offered on services. However, in Q2, deal cycles have returned to an average range of 30 to 60 days, with price concessions mostly limited to large customers on multiyear contracts. CIOs are now focused on directing savings toward generative AI.

Cloud | Disruptive innovation — Source: Theregister.com

While this is good news for all cloud providers, it could prove a particular boon to Amazon Web Services (AWS). The Mizuho report highlights the appeal of Amazon’s Bedrock model for generative AI development, with around 200 companies already waiting to use it for training and launching generative AI apps.³

E-Gaming

Microsoft’s $69 billion acquisition of video game maker Activision Blizzard received a significant boost in July, with U.S. courts allowing the merger to proceed and denying the Federal Trade Commission’s (FTC) appeal to temporarily stop closure of the deal.⁴

The only remaining hurdle to the deal is the Competition and Markets Authority (CMA) in the United Kingdom. Microsoft has submitted a change of circumstances document to the CMA, arguing that the regulator should take a second look at the proposed acquisition in light of new agreements struck with Nvidia, Boosteroid, Sony and others to ensure Activision Blizzard games remain available on non-Microsoft platforms.⁵

Activision Blizzard's game: Call of Duty | Disruptive innovation — Source: Spiceworks.com/tech

The CMA is expected to render a decision by the end of August, and Microsoft and Activision Blizzard have mutually agreed to push the closing date of the deal back to October 18 in case they need time to address any additional concerns from the U.K. regulator.⁶

Meanwhile, Activision Blizzard reported impressive financial results for Q2. Net bookings saw 50% year-over-year growth, while both GAAP operating income and segment operating income experienced over 70% YoY growth. The Activision segment saw 17% YoY growth, with operating income up 80% YoY. The Blizzard segment saw revenue up 160% YoY and operating income more than triple YoY thanks largely to the successful launch of Diablo IV. The success of Diablo IV helped Blizzard achieve its first $1 billion net bookings quarter, setting a new record for segment operating income.⁷

Genomics

Eli Lilly’s experimental Alzheimer’s drug, donanemab, showed promising results in a late-stage clinical trial by slowing cognitive decline in patients in the early stages of the disease. Patients receiving the drug demonstrated a 29% reduction in Alzheimer’s progression after 18 months compared to those receiving a placebo. However, the study also revealed some serious side effects, including brain swelling and bleeding. The drug appeared more effective than Eisai and Biogen’s recently approved drug, Leqembi, but its safety profile needs further review.

Brain scans of alzheimers patients| Disruptive innovation — Source: Nytimes.com/health/alzheimers

Both donanemab and Leqembi are monoclonal antibodies targeting Alzheimer’s-related amyloid plaques in the brain. The hope is that by breaking down amyloid, the progress of the disease can be halted. Alzheimer’s affects around 6.7 million adults aged 65 and older in the U.S., making the search for effective treatments critical.⁸

Fintech

Bank of America is already leveraging AI, virtual reality, and the metaverse to provide immersive training to 2,000 new hires, signalling a broader trend of VR in the banking sector.

The new employees use VR headsets to experience a 360-degree view of a bank branch, enabling them to learn by doing and receive virtual credit. The training also offers real-world scenarios, such as dealing with customer requests or complaints and engaging in AI-based conversations with client bots. Other modules cover the bank’s history, benefits packages, and even “wellness” experiences on virtual islands.

Bank of America employee wearing VR goggles | Disruptive innovation — Source: BankofAmerica

Bank of America has already implemented this technology for over 200,000 staff globally, with positive feedback and faster absorption of training material than traditional methods. 97% of participants who trained in VR reported feeling more comfortable performing the real-world version of tasks after the simulation.

The bank is also exploring use of the metaverse at career fairs to attract younger potential hires, providing a glimpse into the life of an associate through VR experiences.⁹

Robotics & Automation

Rockwell Automation, Inc. introduced the ArmorKinetix Distributed Servo Drives in July, an extension of its Kinetix 5700 platform. These servo drives offer a scalable solution, enhancing machine designs for greater efficiency. These new servos address the needs of manufacturers looking to embrace scalable options that streamline control architectures, lower component count, and boost productivity. The ArmorKinetix housing servos externally, allowing for modular design, reduced cabinet size, and minimized cabling and cooling needs.

Machine servo by Rockwell — Source: Rockwellautomation.com

This innovation gives manufacturers the chance to curb costs, enhance control architecture scalability, and improve energy efficiency. Distributed servo technology drives down overall expenses, augments productivity, and elevates uptime for manufacturers, making it an attractive choice for the next generation of production machinery.¹⁰

5G Innovation

T-Mobile unveiled a significant enhancement of its 5G standalone network in July, introducing four-carrier aggregation to elevate speeds and performance. This advancement promises faster speeds and reduced latency, enhancing the user experience. By integrating multiple 5G channels, T-Mobile effectively transforms its network into a high-speed superhighway, benefiting customers across the nation.

Source: Tmobile

The introduction of four-carrier aggregation is especially noteworthy due to T-Mobile’s distinction as the sole provider of a nationwide 5G standalone network. The innovation brings ultrafast speeds, exceeding 3.3 Gbps, to users throughout the United States.

T-Mobile’s commitment to expansive coverage is evident, as its 5G network encompasses 326 million individuals across two million square miles. Additionally, the Ultra Capacity 5G currently serves over 275 million people, with plans to extend coverage to a total of 300 million by year-end, enhancing connectivity and performance for consumers.¹¹

EDGE ETF: Investment in Innovation

The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, electric vehicle innovation, 5G, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website or click here. Give your portfolio an EDGE.

Portfolio Strategy and Activity

For the month, Evolve Automobile Innovation Index Fund (CARS) made the largest contribution to the Fund, followed by Evolve Cyber Security Index Fund (CYBR) and Evolve Cloud Computing Index Fund (DATA ETF). The largest detractors to performance for the month were AT&T Inc, followed by KDDI Corporation and Verizon Communications Inc. On last rebalance, these securities were added to the portfolio: Renesas Electronics Corp and Rockwell Automation Inc.

Sources

Wayland, M., “Rivian shares surge as second-quarter EV deliveries top estimates,” CNBC, July 3, 2023; https://www.cnbc.com/2023/07/03/rivian-shares-surge-as-second-quarter-ev-deliveries-top-estimates.html
Pisani, B., “The SEC wants corporate America to tell investors more about cybersecurity breaches and what’s being done to fight them,” CNBC, July 26, 2023; https://www.cnbc.com/2023/07/26/sec-wants-to-know-whats-being-done-to-fight-cybersecurity-breaches.html
Thomas, E., “Generative AI is bringing back cloud demand after IT budgets were slashed, which could be a big win for Amazon,” Business Insider, July 10, 2023; https://www.businessinsider.com/generative-ai-cloud-deals-demand-amazon-web-services-aws-2023-7
Novet, J., “FTC loses appeals court bid to temporarily block Microsoft-Activision deal,” CNBC, July 15, 2023; https://www.cnbc.com/2023/07/14/ftc-loses-appeals-court-bid-to-temporarily-block-microsoft-activision-deal.html
Novet, J. & Goswami, R., “Microsoft and Sony sign deal to keep Activision’s Call of Duty on PlayStation,” July 16, 2023; https://www.cnbc.com/2023/07/16/microsoft-and-sony-sign-deal-to-keep-activisions-call-of-duty-on-playstation.html
Warren, T., “Microsoft argues its Activision Blizzard case with UK regulators,” July 31, 2023; https://www.theverge.com/2023/7/31/23813956/microsoft-activision-blizzard-cma-argument-uk-regulator
“Activision Blizzard Announces Second Quarter 2023 Financial Results,” Activision Blizzard, July 19, 2023; https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-second-quarter-2023-financial
Lovelace Jr., B., “Eli Lilly’s experimental Alzheimer’s drug slows progression of the disease, study finds,” NBC News, July 17, 2023; https://www.nbcnews.com/health/health-news/eli-lillys-alzheimers-drug-slows-memory-decline-study-finds-rcna94530
Doherty, K., “Bank of America Is Using AI and Metaverse to Train New Hires,” Bloomberg, July 13, 2023; https://www.bloomberg.com/news/articles/2023-07-13/bank-of-america-is-using-the-metaverse-ai-to-train-its-hires
“Rockwell Automation Reduces Material and Labor Costs with new ArmorKinetix® Distributed Servo Drive,” Rockwell Automation, July 27, 2023; https://www.rockwellautomation.com/en-us/company/news/press-releases/Rockwell-Automation-Reduces-Material-Labor-Costs-with-ArmorKinetix-Distributed-Servo-Drive.html
“T‑Mobile Revs Up 5G with Four‑Carrier Aggregation,” T‑Mobile, July 25, 2023; https://www.t-mobile.com/news/network/t-mobile-revs-up-5g-with-four-carrier-aggregation

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

European Banks Show Resilience and Growth

Posted on August 26, 2023August 30, 2023 by Veronica Carlasuc

The year 2023 has brought forth a remarkable narrative for European banks, defying expectations and showcasing substantial growth despite navigating through challenges such as banking crises and economic uncertainties. These financial institutions have emerged as resilient players in the global financial landscape, with an impressive year-to-date performance that underscores their adaptability and potential for success. From navigating through turbulent times to seizing opportunities for growth, European banks have proven their mettle and continue to influence the dynamics of the banking sector on a broader scale.

European Banks Performance Overview

The European banking sector as a whole has displayed a remarkable year-to-date performance in 2023. Notably, these financial institutions have exhibited resilience and growth amidst the challenges of the current economic landscape. The sector’s overall performance is striking, with significant positive developments even in the face of a banking crisis earlier in the year. This strength is evident in the rebound of returns, where a remarkable surge of has been achieved since the sector’s lowest point on March 24th.

Factors Driving European Banks’ Success

Several key factors have contributed to the remarkable performance of European banks in 2023:

Earnings Momentum and Capital Return: European banks have undergone a significant transformation, surpassing the earnings momentum of their US counterparts after years of disappointment. Analysts’ earnings estimates have been upgraded, and around three-quarters of European banks have exceeded analysts’ pretax profit projections by approximately 13%. Furthermore, European banks are actively returning excess capital to shareholders, with stock buybacks playing a significant role in capital management.
Prudent Regulation and Stability: In contrast to the US, European regulators maintained a tighter grip on the banking sector post-2008. This approach has proven to be beneficial, as European banks weathered the storm more effectively during times of crisis. A critical differentiator is the lower bond holdings and more stable deposits of European banks, which provided a buffer against financial shocks.
Stronger Financial Position: European banks’ financial strength has been emphasized by experts and analysts at international conferences. Top European banks exhibit better levels of credit default swaps, reflecting lower perceived risk compared to their US counterparts. This is indicative of the robustness of European banks’ balance sheets.
Resilience to Economic Downturn: Stress tests conducted by the European Central Bank revealed that Europe’s banking sector could withstand a severe economic downturn without depleting its financial buffers. Even in an adverse scenario of a nearly 10% decline in economic output over three years, European banks would maintain sufficient capital to cover losses and more.

Top Performers and Their Strategies

Several standout performers within the European banking landscape have played a pivotal role in driving the sector’s overall success in 2023:

UniCredit: Led by CEO Andrea Orcel, UniCredit has undergone significant transformation, cutting costs and focusing on higher-performing segments. This strategy has resulted in substantial growth, aligning with the broader trend of regional lenders in Europe. The bank’s projected adjusted profit for 2023 underscores its premier status within Italy’s banking sector.
Banco Bilbao Vizcaya Argentaria (BBVA): BBVA’s exceptional financial performance in 2022 carried into 2023, marked by a surge in net profit and a proactive approach to capitalize on its success. The acquisition of new customers through digital platforms and a strong loan portfolio growth highlights BBVA’s resilience and growth potential.
HSBC Holdings: HSBC’s remarkable financial performance, including substantial net profit growth and strategic acquisitions, reflects its robust revenue growth across various segments. The bank’s ability to leverage interest rate influences and generate income from fees and trading activities has contributed to its strong YTD performance.

The year 2023 has demonstrated the strength and resilience of European banks in terms of impressive returns and swift recovery from crises. Key factors such as earnings momentum, prudent regulation, and robust financial positions have contributed to the sector’s success. Standout performers like UniCredit, BBVA, and HSBC further exemplify the potential for growth within the European banking landscape. As the year progresses, the ongoing performance of European banks will continue to shape investor sentiment and contribute to the evolution of the financial sector.

Investing in European banks with ETFs

The European banking sector is undergoing a significant transformation, unparalleled in recent times, leading to an increasing demand for investment opportunities within this dynamic landscape.

The Evolve European Banks Enhanced Yield ETF (EBNK) is a unique opportunity to be part of the European banking sector’s growth story. EBNK lets you access the potential of European banks with a diversified approach. To find out more about EBNK or other offerings from Evolve ETFs, visit our website or reach out to us.

Sources

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

From Gaming to AI Dominance: Nvidia’s Financial Triumph Continues

Posted on August 24, 2023December 18, 2023 by Veronica Carlasuc

In the latest testament to the accelerating pace of artificial intelligence (AI) and its profound impact on the tech sector, Nvidia Corp. has once again outperformed expectations with its recent earnings announcement. Reporting adjusted earnings of $2.70 per share against the expected $2.09, and a staggering revenue of $13.51 billion versus the anticipated $11.22 billion, Nvidia’s financial performance paints a clear picture of a company at the zenith of the AI-driven technological renaissance. Further solidifying its market dominance, Nvidia became the first-ever semiconductor company to achieve a $1 trillion market valuation earlier this year. Not only did the tech giant’s revenue for the second quarter double from the previous year’s $6.7 billion, but it also marked an 88% hike from the prior period. This exponential growth was spearheaded by Nvidia’s data center business, encompassing AI chips, which saw major consumer internet firms like Alphabet, Amazon, and Meta clambering for their next-gen processors.¹

Nvidia’s ascendancy in the market, however, isn’t solely tethered to its prowess in AI chip technology. The company’s gaming division, once its central business, also witnessed a 22% year-over-year revenue surge, standing at an impressive $2.49 billion, surpassing average estimates.¹ Moreover, with an additional $25 billion stock buyback in the pipeline, Nvidia’s commitment to shareholder value remains robust. The company’s rapid evolution, from its early days of creating graphic chips for video games to now spearheading the market for AI accelerators, is emblematic of CEO Jensen Huang’s visionary leadership. In an era marked by AI’s transformative potential, Nvidia’s unmatched innovation in processor technology, coupled with strategic software rollouts, has positioned it leagues ahead of competitors. As AI continues its upward trajectory, global tech behemoths like Microsoft and Google are set to intensify their collaborations with Nvidia, ensuring a bright future for the semiconductor titan.²

Canada’s First NASDAQ-100® Technology-Focused ETF with QQQT ETF

Looking for ways to take advantage of a pure tech play within the NASDAQ-100®?

QQQT is Canada’s first NASDAQ-100® technology-focused ETF designed to provide investors with exposure to only the “technology company” elements of the NASDAQ-100 Index®.

To learn more about the Evolve NASDAQ Technology Index Fund, please click here: https://evolveetfs.com/qqqt/.

Sources

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index are trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Evolve ETFs. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

Evolve Announces August 2023 Distributions for Certain Evolve Funds

Posted on August 23, 2023 by Veronica Carlasuc

TORONTO, Aug. 23, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve”) is pleased to announce the distribution amounts per unit (the “Distributions”) for certain funds (the “Evolve Funds”), for the period ending August 31, 2023, as indicated in the table below.

The ex-dividend date for the Distributions is anticipated to be August 30, 2023, for all Evolve Funds except for the High Interest Savings Account Fund (“HISA”), US High Interest Savings Account Fund (“HISU.U”), Premium Cash Management Fund (“MCAD”) and US Premium Cash Management Fund (“MUSD.U”). The ex-dividend date for the Distributions for HISA, HISU.U, MCAD and MUSD.U is anticipated to be August 31, 2023. Unitholders of Evolve Funds with record on August 31, 2023 will receive cash distributions payable on or about September 8, 2023.

Evolve Funds	Ticker Symbol	Distribution per Unit	Frequency
Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund	BANK	$0.09300	Monthly
Evolve Global Materials & Mining Enhanced Yield Index ETF	BASE BASE.B	$0.20000 $0.20000	Monthly Monthly
Evolve US Banks Enhanced Yield Fund	CALL CALL.B CALL.U	$0.12500 $0.12500 USD $0.12500	Monthly Monthly Monthly
Evolve Automobile Innovation Index Fund	CARS CARS.B CARS.U	$0.02000 $0.02000 USD $0.02000	Monthly Monthly Monthly
Evolve Cyber Security Index Fund	CYBR CYBR.B CYBR.U	$0.01000 $0.01000 USD $0.01000	Monthly Monthly Monthly
Evolve Cloud Computing Index Fund	DATA DATA.B	$0.01000 $0.01000	Monthly Monthly
Evolve Active Canadian Preferred Share Fund	DIVS	$0.07000	Monthly
Evolve Active Global Fixed Income Fund	EARN	$0.12500	Monthly
Evolve European Banks Enhanced Yield ETF	EBNK EBNK.B EBNK.U	$0.06000 $0.06000 USD $0.06000	Monthly Monthly Monthly
Evolve S&P 500® Enhanced Yield Fund	ESPX ESPX.B ESPX.U	$0.15500 $0.15500 USD $0.15500	Monthly Monthly Monthly
Evolve S&P/TSX 60 Enhanced Yield Fund	ETSX	$0.16000	Monthly
Evolve Active Core Fixed Income Fund	FIXD	$0.05500	Monthly
High Interest Savings Account Fund	HISA	$0.25444	Monthly
US High Interest Savings Account Fund	HISU.U	USD $0.52491	Monthly
Evolve Future Leadership Fund	LEAD LEAD.B LEAD.U	$0.10500 $0.10500 USD $0.10500	Monthly Monthly Monthly
Evolve Global Healthcare Enhanced Yield Fund	LIFE LIFE.B LIFE.U	$0.16000 $0.16000 USD $0.16000	Monthly Monthly Monthly
Premium Cash Management Fund	MCAD	$0.48096	Monthly
US Premium Cash Management Fund	MUSD.U	USD $0.50975	Monthly
Evolve FANGMA Index ETF	TECH TECH.B TECH.U	$0.00160 $0.00160 USD $0.00160	Monthly Monthly Monthly

Distributions for the funds will vary from period to period. For further information regarding the Distributions, please visit www.evolveetfs.com

About Evolve Funds Group Inc.

With over $6.8 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) index-based income strategies; (ii) long term investment themes; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook | Youtube

SOURCE Evolve ETFs

For further information:

Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT, Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Lithium is the Spark Igniting Global Car Market Transformation

Posted on August 22, 2023August 23, 2023 by Veronica Carlasuc

Earlier this month, Albemarle Corporation, the world’s largest lithium provider for electric vehicle batteries, announced its second-quarter results. The company saw net sales of $2.4 billion, an increase of 60% year over year, and net income of $650 million, also a rise of 60% year over year. They also announced an agreement with Ford Motor Company. Between 2026 and 2030, Albemarle will supply over 100,000 metric tons of lithium hydroxide to the auto manufacturer. And Albemarle was named to the Fortune 500 rankings and the TIME100 Most Influential Companies list.¹

And all of this was driven by growing global lithium demand to feed the transition to electric vehicles (EVs).

Lithium is a crucial element for renewable energy, playing a pivotal role in the lithium-ion batteries that power EVs and store renewable energy from solar and wind. As countries embrace cleaner energy solutions, lithium’s demand is set to surge, propelling its value higher despite increased supply.²

The International Energy Agency (IEA) predicts a staggering 30-fold rise in mineral demand for EV battery use by 2040. Auto giants like General Motors, Volkswagen, Ford, and BMW aim for a complete shift to electric vehicles by 2035. And in Q1 2023, U.S. sales of battery-powered cars and plug-in hybrids surged by 45% year-on-year, indicating the growing traction of EVs.³

Given the exponential growth of EV adoption, investors need to understand the importance of lithium-ion batteries to the industry, the challenges of meeting the demand for lithium, and the potential for growth in the lithium mining sector.

EV Adoption Booming Worldwide and Expected to Continue

To explain why lithium is so essential, look no further than the IEA’s recent “Global Electric Vehicle Outlook” report. Lithium’s relevance is apparent in the remarkable global growth of electric vehicles highlighted by the report.

Global sales of battery-electric cars and plug-in hybrids surged past the 10 million mark in 2022, capturing 14% of the overall global car market for the first time. The IEA projects that EV sales will pass 14 million globally in 2023, for an 18% market share. This growth is all the more impressive considering that EV sales were just 5% of the global market as recently as 2020.

The epicentre of this growth is, of course, China. The Chinese market accounts for 60% of global EV sales and has already surpassed its own 2025 sales targets. In second place is Europe, where there was 15% growth in EV sales in 2022, making one in five new cars sold last year electric. The United States, the third-largest market, recorded a remarkable 55% increase in electric car sales in 2022, accounting for 8% of total sales.

And the IEA estimates global EV sales could reach 35% of all new vehicles by 2030—an increase from their earlier projections of 25%–thanks to EV-friendly policies being enacted around the world. Such policies include the E.U.’s new Fit for 55 package of legislation, which lays out tough new CO₂ standards for vehicles, as well as the U.S. Inflation Reduction Act, which provides incentives for greater EV adoption, and the strict California Advanced Clean Cars II emissions regulation which a number of other states have adopted.⁴

With all those new EVs comes the need for more and more batteries and the lithium that makes them possible.

Lithium’s Role in Battery Technology

At the heart of the EV revolution is the lithium-ion battery. These batteries offer a compelling blend of attributes, including their power-to-weight ratio, fast charging, performance even at high temperatures, and their ability to hold a significant charge relative to their total weight. This is a significant benefit in EV engineering, where the more excess weight an EV can shed from its components, the farther it can travel on a single charge.⁵

And so, with growing demand for EVs comes growing demand for lithium-ion batteries.

In 2022, global demand for automotive batteries surged 65% to 550 GWh, up from 330 GWh just a year earlier. China’s vehicle battery demand alone soared by over 70% in 2022 compared to 2021. In the United States in 2022, battery demand for vehicles experienced an 80% YoY boost, despite electric car sales only rising by around 55% during the same period.⁶

Globally, batteries dominated lithium consumption in 2022, accounting for nearly 80% of the total. This share is projected to climb to 90% by 2028 as electric vehicle adoption rises due to falling EV prices.⁷

This suggests the long-term growth potential for lithium due to demand caused by the green energy transition and the need for batteries across both the automotive and renewables sector.

How Much Lithium Is Needed?

So, just how much lithium will we need to help drive the transition to EVs? A great deal, it turns out.

A 70 kWh Tesla battery holds about 62.6 kilograms of lithium carbonate, resulting in approximately 82,000 tonnes needed for Tesla’s 1.31 million EVs sold in 2022 alone. With 10.6 million EVs sold in 2022, that means around 663,500 tonnes of lithium carbonate were required for their batteries.

With millions of EVs on the road, the race to achieve the IEA’s target of 200 million EVs by 2030 implies an astonishing 17.9-fold increase in lithium demand over the next seven years. This projection amounts to approximately 12.52 million tonnes of lithium carbonate by 2030, dwarfing 2021 production by more than 23 times.

As it stands, global lithium demand is expected to be the equivalent of 989,000 tonnes this year, which is 25,000 tonnes short of the total expected global production (964,000 tonnes) in all of 2023.⁸ This necessitates a rapid scaling of mining and processing efforts to accommodate the clean energy transition and EV proliferation.

Investing in Electric Vehicles with ETFs

The auto industry is undergoing the biggest transformation in our lifetimes and there is a growing demand for ways to invest in this industry.

The Evolve Automobile Innovation Index Fund (CARS), is Canada’s first automobile innovation ETF. CARS ETF takes a diversified approach to invest in the development of electric cars, self-driving cars, and automobile innovation, including in some of the world’s leading manufacturers and automobile companies. CARS ETF is a great way to gain access to the future of the automobile and shift your investments into gear. For more information about the Evolve Automobile Innovation Index Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Sources

“Albemarle Reports Net Sales Increase of 60% for Second Quarter,” Albemarle Corporation, August 2, 2023; https://s201.q4cdn.com/960975307/files/doc_earnings/2023/q2/earnings-result/Q22023_pressrelease.pdf
Bourlioufas, N., “Lithium prices to keep rising as demand outpaces supply,” Australian Financial Review, May 16, 2023; https://www.afr.com/wealth/investing/lithium-prices-to-keep-rising-as-demand-outpaces-supply-20230508-p5d6m3
Valerio, P., “Is There Enough Lithium for Massive EV Adoption?,” EPS News, July 11, 2023; https://epsnews.com/2023/07/11/is-there-enough-lithium-for-massive-ev-adoption
“Global EV Outlook 2023: Catching up with climate ambitions,” International Energy Agency, April 2023; https://iea.blob.core.windows.net/assets/dacf14d2-eabc-498a-8263-9f97fd5dc327/GEVO2023.pdf
“How do electric car batteries work?,” EnergySage, November 28, 2022; https://www.energysage.com/electric-vehicles/101/how-do-electric-car-batteries-work/
“Global EV Outlook 2023: Trends in batteries,” International Energy Agency, April 2023; https://www.iea.org/reports/global-ev-outlook-2023/trends-in-batteries
Bourlioufas, N., “Lithium prices to keep rising as demand outpaces supply,” Australian Financial Review, May 16, 2023; https://www.afr.com/wealth/investing/lithium-prices-to-keep-rising-as-demand-outpaces-supply-20230508-p5d6m3
Ibid

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

EU Proposes New Governance Model for the Metaverse

Posted on August 20, 2023December 18, 2023 by Veronica Carlasuc

According to a leaked European Commission paper, the metaverse requires new global governance to ensure openness and legality. The document, revealed in July, proposes relaxed regulations to facilitate innovation and remove barriers to new digital cooperation models, like decentralized autonomous organizations (DAOs).

The paper highlights the need for international cooperation to shape the metaverse as an open, secure space that respects E.U. values and regulations. It calls for a new multi-stakeholder governance process for virtual worlds and Web4 on the Internet Corporation for Assigned Names and Numbers (ICANN) model that establishes rules and processes for today’s Internet.

According to the report, the Commission’s work for the rest of this year will focus on digital cooperation models, like DAOs, and barriers preventing their adoption. Next year, “regulatory sandboxes” will be set up to test short-term projects in a less regulated system.¹

Legislation in the metaverse. 3d illustration. Source: Gettyimages

Meanwhile, Bank of America is already leveraging AI, virtual reality, and the metaverse to provide immersive training to 2,000 new hires, signalling a broader trend of VR in the banking sector.

The bank is also exploring use of the metaverse at career fairs to attract younger potential hires, providing a glimpse into the life of an associate through VR experiences.²

Company Specific Updates

Apple Inc

Following the splashy debut of its new Vision Pro VR/AR headset in June, in July, Apple announced that the headset’s retail launch would begin in select U.S. markets early next year and be appointment-only, following the 2015 launch strategy of the Apple Watch.

The headset will be available for purchase in early 2024, both in-store and online, but only in the United States. Apple plans to create special areas in their U.S. stores featuring seating, headset demo units, and sizing tools. The initial rollout will target major centres like New York and Los Angeles before expanding across the U.S.

The company aims to launch Vision Pro internationally by the end of 2024, with the UK and Canada among the first markets, followed by Asia and Europe. Apple engineers are currently localizing the device for France, Germany, Australia, China, Hong Kong, Japan, and Korea.

The headset, priced at $3,500 US, is considered Apple’s most significant launch since the Apple Watch. Apple has already announced plans to introduce a cheaper model and a second-generation Pro version by 2026.³

Meta Platforms Inc

Meta is revamping its Horizon Worlds virtual reality app to attract a larger audience. The free social platform, where users can create avatars and interact with others, has struggled to gain popularity as the public waits for a compelling VR experience.

To make Horizon Worlds more compelling, Meta has established Ouro Interactive as an in-house studio developing first-party VR games. Their debut game, Super Rumble, offers better graphics and gameplay than previous VR games on the app. More games are expected to follow as Meta improves the platform to support more complex, higher-quality games, as well as roll out third-party developer tools.

Meta also plans to release a mobile version of Horizon Worlds as a bridge between smartphones and its Quest VR headsets. Despite significant investments, the Reality Labs unit, responsible for VR and augmented reality technologies, has incurred losses of over $21 billion since 2022, highlighting the massive investment required to develop a compelling metaverse experience.⁴

Investing in the Metaverse with MESH ETF

Looking to invest in the Metaverse? The Evolve Metaverse ETF (MESH ETF), is Canada’s first metaverse ETF.

MESH ETF provides investors with an actively managed diversified portfolio of companies involved in the development of the metaverse. To learn more about MESH ETF, please click here: https://evolveetfs.com/mesh/.

Portfolio Strategy and Activity

For the month, Coinbase Global Inc made the largest contribution to the Fund, followed by eXp World Holdings Inc and Alibaba Group Holding Ltd. The largest detractors to performance for the month were Snap Inc, followed by Roblox Corp and Taiwan Semiconductor Mfg Ltd.

Sources

Schickler, J., “EU’s Leaked Metaverse Strategy Proposes Regulatory Sandbox, New Global Governance,” CoinDesk, July 6, 2023; https://www.coindesk.com/policy/2023/07/06/eus-leaked-metaverse-strategy-proposes-regulatory-sandbox-new-global-governance/
Doherty, K., “Bank of America Is Using AI and Metaverse to Train New Hires,” Bloomberg, July 13, 2023; https://www.bloomberg.com/news/articles/2023-07-13/bank-of-america-is-using-the-metaverse-ai-to-train-its-hires
Gurman, M., “Apple Plans a Slow, Appointment-Only Rollout of Its $3,500 Vision Pro,” Bloomberg, July 7, 2023; https://www.bloomberg.com/news/articles/2023-07-07/apple-vision-pro-headset-to-launch-in-us-stores-by-appointment
Vanian, J., “Meta is rebooting Horizon Worlds as the VR platform struggles to grow,” CNBC, July 28, 2023; https://www.cnbc.com/2023/07/28/meta-horizon-worlds-metaverse-is-getting-an-update-with-more-games.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Microsoft Acquisition of Activision Blizzard Cleared To Proceed in U.S., Awaiting Decision in U.K.

Posted on August 16, 2023December 18, 2023 by Veronica Carlasuc

Microsoft’s $69 billion acquisition of video game maker Activision Blizzard (held by the Fund) received a significant boost in July, with U.S. courts allowing the merger to proceed and denying the Federal Trade Commission’s (FTC) appeal to temporarily stop closure of the deal.¹

A federal judge ruled in July that the FTC failed to demonstrate that Microsoft’s ownership of Activision would harm competition in the console or cloud-gaming markets and would, in fact, increase consumer access to Activision content, such as the immensely popular “Call of Duty” series.² This decision was later held up on appeal.

In response to the denial of their appeal, the FTC moved to cancel its in-house administrative challenge to Microsoft’s Activision Blizzard deal, which was slated to go before a judge in August. It is important to note that such a challenge could be re-filed at some point in the future, and the FTC still has a pending appeal of the denial of its preliminary injunction.³

The only remaining hurdle to the deal is the Competition and Markets Authority (CMA) in the United Kingdom. Having initially blocked the acquisition in April, the CMA remains the loan regulator holdout after the Microsoft-Activision deal received approval in every other jurisdiction.

At the end of July, Microsoft submitted a change of circumstances document to the CMA, arguing that the regulator should take a second look at the proposed acquisition. Microsoft wants the CMA to take into consideration Microsoft’s cloud gaming agreements with Nvidia, Boosteroid, and others made since the deal’s initial rejection, a deal with Sony to keep “Call of Duty” available on PlayStation post-acquisition,⁴ and material included in the FTC case that Microsoft contends addresses all the CMA’s previous concerns about the deal and potential anti-competitive impacts.

*Source: Activision/Blizzard/CallofDuty*

Company Specific Updates

Activision Blizzard Inc

Activision Blizzard reported impressive financial results for Q2. Net bookings saw 50% year-over-year growth, while both GAAP operating income and segment operating income experienced over 70% YoY growth.

The “Call of Duty” franchise contributed to the 17% year-over-year growth in the company’s Activision segment revenue, and operating income saw an impressive increase of over 80% YoY.

Meanwhile, Blizzard segment revenue demonstrated growth of over 160% year-over-year, with operating income more than tripling year-over-year, primarily due to the successful launch of Diablo IV. The success of Diablo IV helped Blizzard achieve its first $1 billion net bookings quarter, setting a new record for segment operating income.⁶

Electronic Arts Inc

Electronic Arts revealed its first game under its new EA SPORTS FC brand in July, entitled EA SPORTS FC24. Set to launch globally on September 29, 2023, the game’s cover star is Manchester City striker Erling Haaland, who made a surprise appearance during the unveiling event in Amsterdam alongside soccer legends Didier Drogba, Luis Figo, Laura Georges, and Alex Scott.

EA SPORTS FC24 introduces three innovative technologies, including HyperMotion V, which uses real match data from over 180 professional matches in both men’s and women’s football to deliver ground-breaking, realistic football movement and gameplay.

The game also marks a world-first by combining men and women footballers on the same pitch. Early access to EA SPORTS FC 24 will be available September 22, 2023, through the Ultimate Edition, and the game will launch on various platforms, including PlayStation 5, PlayStation 4, Xbox Series X|S, Xbox One, PC, and Nintendo Switch a week later.⁷

HERO ETF: Diversified Investing in eGaming

Interested in a diversified approach to investing in video games? Canada’s first esports and gaming ETF, the Evolve E-Gaming Index ETF (HERO ETF), is an index-based exchange-traded fund that invests in the leading video game companies across the globe. For more information about the Evolve E-Gaming Index ETF or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Portfolio Strategy and Activity

For the month, NetEase Inc made the largest contribution to the Fund, followed by Activision Blizzard Inc and Electronic Arts Inc. The largest detractors to performance for the month were Krafton Inc, followed by Bandai Namco Hldgs, and Roblox Corp. On last rebalance, these securities were added to the portfolio: Soft-World International Corp, Gamania Digital Entertainment Co Ltd, Archosaur Games Inc, AppLovin Corp, Playstudios Inc, and Rovio Entertainment Oyj.

Sources

Novet, J., “FTC loses appeals court bid to temporarily block Microsoft-Activision deal,” CNBC, July 15, 2023; https://www.cnbc.com/2023/07/14/ftc-loses-appeals-court-bid-to-temporarily-block-microsoft-activision-deal.html
Needleman, S. & Michaels, D., “Microsoft Can Close Its $75 Billion Buy of Activision Blizzard, Judge Rules,” July 11, 2023; https://www.wsj.com/articles/microsoft-activision-blizzard-deal-ftc-hearing-d42675f1
Warren, T. & Lawler, R., “FTC withdraws its in-house challenge to Microsoft’s Activision Blizzard deal,” The Verge, July 20, 2023; https://www.theverge.com/2023/7/20/23795591/ftc-microsoft-activision-administrative-challenge
Novet, J. & Goswami, R., “Microsoft and Sony sign deal to keep Activision’s Call of Duty on PlayStation,” July 16, 2023; https://www.cnbc.com/2023/07/16/microsoft-and-sony-sign-deal-to-keep-activisions-call-of-duty-on-playstation.html
Warren, T., “Microsoft argues its Activision Blizzard case with UK regulators,” July 31, 2023; https://www.theverge.com/2023/7/31/23813956/microsoft-activision-blizzard-cma-argument-uk-regulator
“Activision Blizzard Announces Second Quarter 2023 Financial Results,” Activision Blizzard, July 19, 2023; https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-second-quarter-2023-financial
“Electronic Arts Sets out Vision for EA SPORTS FC™ and Reveals First Look at EA SPORTS FC™ 24 Gameplay,” Electronic Arts, July 13, 2023; https://ir.ea.com/press-releases/press-release-details/2023/Electronic-Arts-Sets-out-Vision-for-EA-SPORTS-FC-and-Reveals-First-Look-at-EA-SPORTS-FC-24-Gameplay/default.aspx

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

AstraZeneca’s Billion-Dollar Bid to Combat Rare Diseases Amidst Growing Drug Shortages

Posted on August 14, 2023December 18, 2023 by Veronica Carlasuc

A tornado caused significant damage to a Pfizer Inc. plant in North Carolina in July and may have worsened the existing drug shortage in the United States. The Pfizer plant was responsible for producing 25% of the company’s sterile injectables used in U.S. hospitals. Pfizer is currently assessing the extent of the damage and its impact on production.

At least 129 sterile injectable drugs, including crucial cancer treatments, are currently in short supply in the United States. Drug shortages have reached their highest levels since 2014, affecting a wide range of medications. The U.S. Food and Drug Administration is monitoring the situation and collaborating with Pfizer to understand the potential impact on the drug supply. The issue is also being considered by a White House task force, and Congress has conducted hearings on the matter.¹

In other White House-related news, in a bid to lower healthcare costs the Biden administration has proposed new regulations that would reverse the expansion of short-term health insurance plans introduced by the previous administration. The new rules would rescind a 2018 policy that made these plans accessible to millions of Americans for up to 12 months instead of the previous limit of three months and which made such short-term coverage renewable.

Critics argue that the expansion of short-term coverage undermines protections for patients with pre-existing conditions, as outlined in the Affordable Care Act (ACA). These short-term plans do not offer benefits like maternity coverage and guaranteed insurance regardless of health. The proposed measures are part of a larger package aimed at addressing healthcare expenses in the United States.²

And it was revealed in July that Google’s medical AI chatbot, Med-PaLM 2, has been undergoing testing in research hospitals, including the Mayo Clinic, since April of this year. This AI tool is designed to provide answers to medical questions and is built around an updated version of Google’s LLM, which powers their Bard AI.

Med-PaLM 2 was trained on expert medical demonstrations, making it more adept at healthcare conversations compared to generalized chatbots like Bard, Bing, and ChatGPT. Google believes this AI could be particularly valuable in regions with limited access to doctors. Testers of Med-PaLM 2 will have control over their encrypted data, ensuring Google won’t have access to it.

While not yet ready for market, and while early data indicates that Med-PaLM 2 still faces the kind of accuracy issues seen in large language models, it generally performed as well as actual doctors in various metrics, such as evidence of reasoning and providing consensus-supported answers.³

*Source: Breezyscroll.com/technology/medpalm2*

Company Specific Updates

Eli Lilly & Co

More Eli Lilly & Co news

AstraZeneca Plc

AstraZeneca is set to acquire a selection of rare disease gene therapies from Pfizer Inc., signalling the company’s focus on future revenue and growth prospects. The agreement, valued at up to $1 billion with tiered royalties on sales, is expected to be completed in Q3. This move builds upon AstraZeneca’s significant investment in rare diseases following its $39 billion acquisition of Alexion in 2021.

*Source: Scientificamerican/GettyImages*

Rare diseases, 80% of which are caused by genetic mutations, comprise over 7,000 known conditions. The acquired portfolio from Pfizer targets genetic disorders affecting the central nervous system, heart, kidneys, liver, and muscles.

AstraZeneca’s CEO, Pascal Soriot, sees this deal as a strategic step to advance the company’s presence in cell and gene therapies. Gene therapies have the potential to play a crucial role in addressing rare diseases with significant genetic components, broadening the range of conditions that can be effectively addressed.⁵

LIFE ETF: Investing in Global Healthcare

Investing in ETFs can be one way to add cutting-edge healthcare to your portfolio.

Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip companies in the healthcare industry, with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Portfolio Strategy and Activity

For the month, AbbVie Inc made the largest contribution to the Fund, followed by Danaher Corporation and Amgen Inc. The largest detractors to performance for the month were Merck & Co Inc, followed by Stryker Corporation, and Intuitive Surgical Inc. On last rebalance, Vertex Pharmaceuticals Inc was added to the portfolio.

Sources

1. Cattan, N. & Swetlitz, I., “Key Pfizer Plant Damaged in Tornado Amid Drug Shortage,” Bloomberg, July 19, 2023; https://www.bloomberg.com/news/articles/2023-07-19/pfizer-injectables-plant-damaged-in-tornado-amid-drug-shortage
2. “Biden to crack down on short-term health insurance plans, Politico reports,” Reuters, July 6, 2023; https://www.reuters.com/world/us/biden-crack-down-short-term-health-insurance-plans-politico-2023-07-06/
3. Davis, W., “Google’s medical AI chatbot is already being tested in hospitals,” The Verge, July 8, 2023; https://www.theverge.com/2023/7/8/23788265/google-med-palm-2-mayo-clinic-chatbot-bard-chatgpt
4. Lovelace Jr., B., “Eli Lilly’s experimental Alzheimer’s drug slows progression of the disease, study finds,” NBC News, July 17, 2023; https://www.nbcnews.com/health/health-news/eli-lillys-alzheimers-drug-slows-memory-decline-study-finds-rcna94530
5. Ring, S., “Astra Strikes $1 Billion Pfizer Deal, Dismisses Trial Concerns,” Bloomberg, July 28, 2023; https://www.bloomberg.com/news/articles/2023-07-28/astrazeneca-strikes-rare-disease-gene-therapy-deal-with-pfizer

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How the SEC’s New Cybersecurity Rules Could Impact Public Companies

Posted on August 11, 2023December 18, 2023 by Veronica Carlasuc

The Canadian Centre for Cyber Security, along with the Federal Bureau of Investigation (FBI), the Cybersecurity and Infrastructure Security Agency (CISA) and the Multi-State Information Sharing and Analysis Center (MS-ISAC) in the U.S. issued a joint advisory warning in July about the “Truebot” malware, attributed to the Russian-speaking Silence Group.

Hackers are exploiting a vulnerability in security software Netwrix Auditor, which is used by over 7,000 organizations, including clients in insurance, finance, healthcare, and legal sectors in Canada and the U.S. The malware enables threat actors to execute enumeration and privilege escalation attacks, granting unauthorized access to computer networks and enabling the theft of sensitive information. Truebot poses a significant cybersecurity threat, and the joint advisory urged organizations to take appropriate measures to protect their networks.¹

Meanwhile, in the United States, the Securities and Exchange Commission (SEC) is introducing new rules to enhance cybersecurity disclosure by public companies. Under these rules, companies must report “material” cybersecurity breaches within four days of determining their significance.

And Microsoft announced in July that it is expanding its offerings in the cybersecurity market with two new products, Microsoft Entra Internet Access and Microsoft Entra Private Access, currently in the preview stage.

The Entra products fall under the Secure Access Service Edge (SASE) aspect of cybersecurity and are aimed at providing secure access to cloud and on-premises applications for corporate workers. Entra Private Access service will be an alternative to traditional virtual private networks (VPNs), while Entra Internet Access will allow security admins to control employees’ connections to cloud apps, including Microsoft 365 applications like Teams. By entering the SASE market, Microsoft aims to strengthen its position in the cybersecurity sector, competing with cloud network security providers like Palo Alto Networks and Zscaler (both held by the Fund).

While pricing details are yet to be disclosed, these new offerings could elevate security as a top category for Microsoft, as SASE remains the last and largest cybersecurity segment for which Microsoft has yet to make a play.³

Company Specific Updates

Zscaler Inc

Zscaler, Inc. has released its 2023 ThreatLabz Ransomware Report, highlighting the rise of complex ransomware attacks and key trends in cyber threats. Notably, there has been an increase in attacks on public organizations and those businesses with cyber insurance. The report also sheds light on the growth of ransomware-as-a-service (RaaS), in which threat actors offer their services on the dark web in exchange for a cut of ransomware profits (often 70-80%). The growing popularity of this model has contributed to a nearly 40% surge in ransomware attacks over the past year. Encryption-less extortion, a style of cyberattack prioritizing data exfiltration over encryption, has also become more prevalent.

The United States is the primary target for ransomware attacks, with 40% of victims based there. The next three countries on the list—Canada, the United Kingdom, and Germany—had a combined total of less than half the attacks focused on the U.S. The report found that manufacturing is the most targeted sector globally due to the appeal of intellectual property and critical infrastructure.

The data analyzed by the ThreatLabz team came from the Zscaler security cloud, monitoring over 500 trillion daily signals and blocking 8 billion threats daily through 250,000 security updates.⁴

CrowdStrike Inc.

CrowdStrike has been honoured with the prestigious 2023 U.S. Independent Software Vendor Partner of the Year award by Amazon Web Services (AWS). This recognition highlights CrowdStrike’s exceptional business model, which prioritizes specialization, innovation, and collaboration. The winners were carefully chosen by a panel of AWS experts, using objective criteria and third-party vendor audits.

The award comes after CrowdStrike’s successful partnership with AWS in developing endpoint security for the OCSF schema, which forms the foundation of AWS’s newly released Amazon Security Lake. Additionally, over the last year, they unveiled a generative AI collaboration for CrowdStrike’s Charlotte AI assistant.

As part of the AWS Partner Network (APN), CrowdStrike is one of AWS’s fastest-growing and largest technology and innovation partners. This acknowledgement by AWS underscores CrowdStrike’s leadership in the cloud security domain, demonstrating their dedication to innovation and success in safeguarding customers’ cloud environments across various segments and locations.⁵

CYBR ETF: Diversified Investing in Cybersecurity

Portfolio Strategy and Activity

For the month, Okta Inc made the largest contribution to the Fund, followed by Zscaler Inc and CrowdStrike Inc. The largest detractors to performance for the month were Palo Alto Networks Inc, followed by Blackberry Ltd and Trend Micro Inc.

Sources

Otis, D., “Canadian cybersecurity agency and FBI issue advisory over rising ‘Truebot’ cyberattacks,” CTV News, July 7, 2023; https://www.ctvnews.ca/sci-tech/canadian-cybersecurity-agency-and-fbi-issue-advisory-over-rising-truebot-cyberattacks-1.6471754
Pisani, B., “The SEC wants corporate America to tell investors more about cybersecurity breaches and what’s being done to fight them,” CNBC, July 26, 2023; https://www.cnbc.com/2023/07/26/sec-wants-to-know-whats-being-done-to-fight-cybersecurity-breaches.html
Novet, J., “Cloudflare, Palo Alto Networks and Zscaler tumble as Microsoft expands in cybersecurity,” CNBC, July 12, 2023; https://www.cnbc.com/2023/07/12/palo-alto-networks-and-zscaler-tumble-as-microsoft-expands-in-security.html
“Zscaler 2023 Ransomware Report Shows a Nearly 40% Increase in Global Ransomware Attacks,” Zscaler, June 28, 2023; https://ir.zscaler.com/news-releases/news-release-details/zscaler-2023-ransomware-report-shows-nearly-40-increase-global
“AWS Selects CrowdStrike for 2023 US ISV Partner of the Year Award,” CrowdStrike, July 27, 2023; https://ir.crowdstrike.com/news-releases/news-release-details/aws-selects-crowdstrike-2023-us-isv-partner-year-award

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

From Cloud Computing Triumphs to Mixed iPhone Sales: Unpacking the Latest Earnings from Tech Giants

Posted on August 9, 2023August 11, 2023 by Veronica Carlasuc

During the latest fiscal period, tech leaders reported significant financial developments. Google’s cloud division marked its second consecutive quarter of profitability, Meta’s financial results reflected the efficacy of its cost-containment strategies, and Microsoft navigated margin compression due to substantial investments in AI.

Apple

Earnings: $1.26 per share vs. $1.19 expected by Refinitiv

Revenue: $81.80B vs. $81.69B expected by Refinitiv

Apple reported a slight fall in sales for the fiscal third quarter ended July 1, with revenue at $81.8 billion, a decrease of 1.4%, but still topping expectations of $81.69 billion. EPS rose 5% to $1.26, exceeding the anticipated $1.19. Weaker iPhone sales were offset by a strong performance in the services segment, including Apple TV+, and 8% growth in sales in China. However, concerns persist over the future growth of iPhone sales, and the company’s sales forecast for the fiscal fourth quarter is below analyst expectations. Despite this, Apple’s gross profit margin is pegged at 44% to 45%, above expectations, and research and development spending has reached $22.61 billion for the fiscal year, an increase of $3.12 billion over the previous year. The mixed results reflect Apple’s ongoing battle in a mature market and uncertainty around its next big product, the Vision Pro mixed-reality headset.²

Netflix

Earnings: $3.29 per share vs. $2.86 expected by Refinitiv

Revenue: $8.19 billion vs $8.30 billion expected by Refinitiv

Netflix reported earnings of $3.29 per share on revenue of $8.19 billion for the latest quarter, beating earnings expectations but falling slightly short on the anticipated revenue of $8.30 billion. The company added 5.9 million customers during the second quarter, a growth attributed to its broader crackdown on password sharing in the U.S., with plans to extend this policy. Revenue increased 3% from the prior-year period, and net income climbed to $1.49 billion. The Hollywood writers and actors strikes may potentially impact the streaming giant, but analysts expect Netflix to fare better due to its substantial international content. As a result of the strike, Netflix increased its free cash flow forecast to $5 billion for 2023, up from a prior estimate of $3.5 billion. The company forecasts further revenue growth in the coming quarters, expecting $8.5 billion for Q3, a 7% increase year over year, as it capitalizes on paid sharing and growth in its ad-supported plan.³

Alphabet

Earnings: $1.44 per share vs. $1.34, adjusted, expected by Refinitiv.

Revenue: $74.6 billion vs. $72.82 billion expected by Refinitiv.

Alphabet, Google’s parent company, reported a strong earnings report for the latest quarter, with earnings at $1.44 per share on revenue of $74.6 billion, beating expectations of $1.34 per share and $72.82 billion, respectively. Second-quarter revenue rose 7% from the same period last year, continuing a trend of single-digit growth as the company grapples with concerns about economic conditions and a pullback in digital ad spending. Notably, Google’s cloud unit reported its second straight profitable quarter, with operating income of $395 million, a significant turnaround from a loss of $590 million a year earlier, reflecting a 28% increase in revenue for the division. Google’s ad revenue also increased by 3.3% to $58.14 billion, while YouTube ads exceeded expectations at $7.67 billion, up from $7.34 billion last year, despite facing increased competition from TikTok. Overall, the report highlights Alphabet’s solid performance, especially in its cloud business, amid ongoing market challenges.⁴

Microsoft

Earnings: $2.69 per share, vs. $2.55 as expected by Refinitiv.

Revenue: $56.19 billion, vs. $55.47 billion as expected by Refinitiv.

Microsoft reported Q4 earnings of $2.69 per share on revenue of $56.19 billion, beating expectations, but shares fell following worse-than-expected revenue guidance for the fiscal first quarter. The company’s Intelligent Cloud segment performed well, contributing $23.99 billion in revenue, a 15% increase. However, concerns were raised as recent investments in artificial intelligence (AI) aren’t expected to yield immediate results, and extra spending on AI infrastructure is cutting into Microsoft’s cloud gross margin. The guidance for the operating segment featuring the Windows operating system also came up short of analyst expectations. Additionally, for the first time since 2016, the company’s research and development costs declined year over year, reflecting internal cost-saving measures. Despite some challenges, many analysts remain optimistic about Microsoft’s long-term prospects, particularly in AI’s potential to drive growth in Azure and Office productivity software.^5,6

Amazon

EPS: $0.65 per share vs. $0.35 as expected by Refinitiv

Revenue: $134.4 billion vs. $131.5 billion as expected by Refinitiv

Amazon reported a substantial earnings beat for the latest quarter, with EPS of 65 cents, almost doubling the 35 cents expected, and revenue of $134.4 billion, surpassing the expected $131.5 billion. This represents Amazon’s biggest earnings beat since Q4 2020, reflecting the success of CEO Andy Jassy’s cost-cutting efforts, including the largest layoffs in the company’s history, with 27,000 jobs cut since last fall. Global headcount has fallen 4% year over year. For the third quarter, Amazon expects sales between $138 billion and $143 billion, reflecting the success of its “biggest ever” Prime Day discount event. After being stuck in single-digit growth for five of the past six quarters, the company has returned to double-digit growth, with some of the improvement attributed to AWS, Amazon’s cloud computing platform. Jassy’s leadership seems to be steering the company in a positive direction following the departure of founder Jeff Bezos.⁷

Investing in FANGMA: TECH ETF

With the Evolve FANGMA Index ETF (TECH ETF), investors gain exposure to all six companies – Facebook, Amazon, Netflix, Google, Microsoft, and Apple – for a reasonable unit price.

For more information about the Evolve FANGMA Index ETF (TECH ETF) or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Sources

Vanian, J. (2023, July 31). Meta reports better-than-expected results and issues optimistic guidance for third quarter. CNBC. https://www.cnbc.com/2023/07/26/meta-to-report-second-quarter-earnings-after-the-bell.html#:~:text=Earnings%3A%20%242.98%20per%20share%20vs,%2431.12%20billion%20expected%20by%20Refinitiv.
Nellis, S. (2023, August 4). Apple sees sales slump continuing, shares drop 2% despite beating sales expectations. Reuters. https://www.reuters.com/technology/apple-profit-tops-wall-street-targets-strong-services-counter-weaker-iphone-2023-08-03/
Rizzo, L. (2023, July 19). Netflix subscriptions jump 8%, revenue climbs as password sharing crackdown takes hold. CNBC. https://www.cnbc.com/2023/07/19/netflix-nflx-earnings-2q-2023.html#:~:text=Netflix%20subscriptions%20rose%208%25%20in,reported%20%248.19%20billion%20in%20revenue
Elias, J. (2023, July 25). Alphabet reports better-than-expected quarterly results driven by growth in cloud. CNBC. https://www.cnbc.com/2023/07/25/alphabet-googl-q2-earnings-report-2023.html
Novet, J. (2023a, July 25). Microsoft shares dip after Quarterly revenue guidance misses expectations. CNBC. https://www.cnbc.com/2023/07/25/microsoft-msft-q4-earnings-report-2023.html
Novet, J. (2023b, July 26). Microsoft shares fall after earnings report as analysts process a delayed A.I. Ramp. CNBC. https://www.cnbc.com/2023/07/26/microsoft-stock-falls-as-analysts-digest-a-delayed-ai-ramp.html
Palmer, A. (2023, August 3). Amazon reports blowout profit, beats on sales and issues optimistic guidance. CNBC. https://www.cnbc.com/2023/08/03/amazon-amzn-q2-earnings-report-2023.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

What the Next Decade Holds for Growth in Cybersecurity

Posted on August 7, 2023December 18, 2023 by Veronica Carlasuc

So far in 2023, the cybersecurity sector has faced some challenges that have impacted investment and growth within the industry.

Challenges Confronting the Cybersecurity Sector

However, it’s worth noting that the decline doesn’t indicate a lack of interest or potential in the industry. Indeed, market research firm IDC expects that total spending on cybersecurity products and services across the economy will pass $219 billion this year, representing growth of 13% from 2022.2 Rather, the investment slowdown reflects a changing investment landscape.

Within the last year, the number of victims paying ransomware increased from 21% to 85%. In 2022 alone, attackers extorted $456.8 million from victims. Total costs of cybercrime are predicted to be $8 trillion this year and $10.5 trillion by 2025, with 60% of companies going out of business within six months of a cyberattack.3 So clearly, despite an investment slowdown, the threat posed by cyber attack isn’t going anywhere.

In the near term, industry observers expect to see investment rebound in the second half of 2023 and into 2024, with M&A activity picking up, as well.4

Growth Projected for Cybersecurity Over the Next Decade

The cybersecurity industry is poised for significant growth over the next decade, with the critical importance of robust cybersecurity driving demand for innovative solutions and services.

Diversified Investing in Cybersecurity with CYBR ETF

Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR), invests in global companies involved in the cybersecurity industry.

For more information, visit the fund page here: https://evolveetfs.com/cybr/.

Sources

1. Vijayan, J., “Analysts: Cybersecurity Funding Set for Rebound,” Dark Reading, July 10, 2023; https://www.darkreading.com/operations/analysts-cybersecurity-funding-uptick-2h-2023
2. “New IDC Spending Guide Forecasts Worldwide Security Investments Will Grow 12.1% in 2023 to $219 Billion,” IDC, March 16, 2023; https://www.idc.com/getdoc.jsp?containerId=prUS50498423
3. “The impact of inflation on cybersecurity,” RFA, June 30, 2023; https://rfa.com/news-and-insights/thought-leadership/the-impact-of-inflation-on-cybersecurity/
4. Vijayan, J., “Analysts: Cybersecurity Funding Set for Rebound,” Dark Reading, July 10, 2023; https://www.darkreading.com/operations/analysts-cybersecurity-funding-uptick-2h-2023
5. “Global Cyber Security Market Size [2023-2030] to Reach USD 424.97 Billion and Exhibit a CAGR of 13.8%,” Fortune Business Insights, April 19, 2023; https://www.globenewswire.com/news-release/2023/04/19/2649842/0/en/Global-Cyber-Security-Market-Size-2023-2030-to-Reach-USD-424-97-Billion-and-Exhibit-a-CAGR-of-13-8.html
6. “Cyber Security Market Size Is Valued At US$ 534 Bn by 2032: Data Analysis by Experts at Market.Us,” GlobalNewswire, March 23, 2023; https://www.globenewswire.com/en/news-release/2023/03/23/2632956/0/en/Cyber-Security-Market-Size-Is-Valued-At-US-534-Bn-by-2032-Data-Analysis-by-Experts-at-Market-Us.html
7. Kovacs, E., “Industrial Cybersecurity Market Expected to Soar in Next Decade,” SecurityWeek, October 18, 2022; https://www.securityweek.com/industrial-cybersecurity-market-expected-soar-next-decade/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Growth Potential of Generative AI Gives Investors an Edge

Posted on August 2, 2023December 18, 2023 by Veronica Carlasuc

International Data Corporation (IDC) projects that by 2026, worldwide artificial intelligence systems spending will top $300 billion, up from less than $100 billion in 2021,¹ and this meteoric rise in AI adoption and spending is hardly surprising.

AI is disrupting virtually every industry, with businesses recognizing the technology’s transformative potential. Early adopters have reported substantial benefits and have revealed exciting investment opportunities. As companies worldwide recognize the competitive edge AI offers, the future holds transformative promise driven by the growth potential of AI.

AI Is Disrupting Virtually Every Industry

According to a recent IDC survey, approximately half of respondents plan to integrate artificial intelligence into their business within the next year. Notably, AI-powered automation is predicted to take center stage, fueled by remarkable advancements in natural language processing such as ChatGPT.²

As such, generative AI stands to revolutionize multiple industries by autonomously generating everything from text and images to computer code. The technology is currently reshaping a range of sectors, including marketing, pharmaceuticals, and video gaming, to name just a few.³

And some of the benefits of AI are already being realized, with innovation and sustainability standing out as the primary advantages of AI implementation. Early adopters of AI have reported substantial business improvements, with innovation seeing a remarkable 35% gain and efforts toward improved sustainability experiencing a significant 33% boost over the past three years. Additionally, customer and employee retention each saw a notable improvement of 32% that was attributable to AI investment.⁴

With the upward trajectory of AI adoption, industries are investing heavily and positioning themselves to harness the full capabilities of this transformative technology, meaning that expenditure on AI will continue to grow.

AI Adoption and Spend Are on the Rise

There has already been a threefold increase in AI adoption across industries since 2019, with the largest companies increasing AI spend by 4% or more annually every year since 2020.⁵

Analysts foresee a significant effect on customer spending as the integration of generative AI tools becomes more prevalent among software companies. For instance, TD Cowen estimated generative AI software spending by consumers would grow from $1 billion in 2022 to $81 billion in 2027—a five-year CAGR of 190%.⁶

If this alone isn’t enough to underline the potential of generative AI as a powerful driver of economic growth, PwC’s research further cements the significance of AI on a global scale. Their predictions suggest that by 2030, AI could increase global GDP by up to 14%, amounting to an astonishing additional $15.7 trillion. According to PwC, China stands to gain the most from AI, with a potential boost of up to 26% in its GDP by 2030, followed closely by North America, with a projected 14% increase. This massive economic opportunity positions AI as the most significant commercial prospect today.⁷

And we are already seeing some of that expansion in 2023. So far this year, the NASDAQ® composite is up 35%, primarily driven by the promise of generative AI.⁸

Looking at just the Technology stocks within the NASDAQ-100® (the top 100 stocks in the whole exchange), they have contributed 76.2% of the index’s overall performance this year. Of the top ten companies in the NASDAQ-100®, seven—Alphabet, Amazon, Apple, Broadcom, Meta, Microsoft, and NVIDIA—are at the forefront of AI development.⁹ These companies develop the hardware and software necessary for the AI boom, whether that be chip sets for AI computations, cloud infrastructure to host and run AI programs, or cutting-edge user interfaces. The AI boom has meant boom times for many of these companies, and growth is only projected to continue in this sector.

Taking just two examples from this list—Nvidia and Microsoft—illustrates the promise of growth for AI both now and in the near term.

For AI-driven growth right now, look no further than chip manufacturer Nvidia. Since the debut of ChatGPT in late 2022, perhaps no single company has benefited from AI as much as Nvidia. The company’s processors are instrumental in training AI algorithms, and that has meant a record-breaking 2023 for the company. Nvidia unexpectedly beat analyst projects in Q2 by a staggering $4 billion on their way to a market valuation of $1 trillion.¹⁰ As it stands, Nvidia stock is up over 209% so far this year due to demand for its AI tools.¹¹

And as for the future possibilities of AI-driven growth, the poster child is Microsoft. Already dominant in enterprise software and rapidly gaining share in cloud computing, AI promises to turbocharge Microsoft’s business in both areas.

Microsoft was an early investor (to the tune of $10 billion) in OpenAI, the company responsible for Chat GPT. Analysts at Morgan Stanley estimate that investment could result in a $90 billion market opportunity by 2025. According to Morgan Stanley, Microsoft can indirectly monetize ChatGPT and any related future products because it provides all cloud services for OpenAI. Likewise, Microsoft can connect developers with OpenAI models for building custom applications. And the company will be able to charge a premium for its enterprise software as generative AI capabilities are embedded into its Microsoft 365 suite of products.¹²

The AI revolution is undeniably reshaping the global economy and driving remarkable growth across the global economy. With AI adoption and spending on the rise, the stage is set for a transformative future, with generative AI tools creating unprecedented disruption across industries as well as exciting investment opportunities.

Canada’s First NASDAQ-100® Technology-Focused ETF with QQQT ETF

Looking for ways to take advantage of a pure tech play within the NASDAQ-100®?

QQQT is Canada’s first NASDAQ-100® technology-focused ETF designed to provide investors with exposure to only the “technology company” elements of the NASDAQ-100 Index®.

The new ETF comes in three versions: Canadian dollar hedged Units (QQQT), Canadian dollar unhedged units (QQQT.B) and U.S. dollar unhedged units (QQQT.U).

To learn more about the Evolve NASDAQ Technology Index Fund, please click here: https://evolveetfs.com/qqqt/.

Sources

Jyoti, R. & Kuppuswamy, R., “Create More Business Value from Your Organizational Data Embrace Organic Integration of AI across the Business,” IDC, February 2023, https://pages.dataiku.com/report-idc-2023
Ibid
Krause, R., “AI Stocks: Tech Giants, Cloud Titans, Chipmakers Battle For An Edge,” Investor’s Business Daily, July 24, 2023; https://www.investors.com/news/technology/artificial-intelligence-stocks/
Jyoti, R. & Kuppuswamy, R., “Create More Business Value from Your Organizational Data Embrace Organic Integration of AI across the Business,” IDC, February 2023, https://pages.dataiku.com/report-idc-2023
Ibid
Krause, R., “AI Stocks: Tech Giants, Cloud Titans, Chipmakers Battle For An Edge,” Investor’s Business Daily, July 24, 2023; https://www.investors.com/news/technology/artificial-intelligence-stocks/
“Sizing the prize What’s the real value of AI for your business and how can you capitalise?”, PwC, n.d.; https://www.pwc.com/gx/en/issues/analytics/assets/pwc-ai-analysis-sizing-the-prize-report.pdf
Krause, R., “AI Stocks: Tech Giants, Cloud Titans, Chipmakers Battle For An Edge,” Investor’s Business Daily, July 24, 2023; https://www.investors.com/news/technology/artificial-intelligence-stocks/
Marex, M., “NDXT10™ Index: Accessing the Pure Tech Sector Exposure of the Nasdaq-100®,” Nasdaq, n.d., https://evolve-cdn.tor1.cdn.digitaloceanspaces.com/wp-content/uploads/2023/07/NDXT10-Research.pdf
De Vynck, G., “The tech industry was deflating. Then came ChatGPT.” The Washington Post, June 4, 2023; https://www.washingtonpost.com/technology/2023/06/04/ai-bubble-tech-industry-outlook/
Krause, R., “AI Stocks: Tech Giants, Cloud Titans, Chipmakers Battle For An Edge,” Investor’s Business Daily, July 24, 2023; https://www.investors.com/news/technology/artificial-intelligence-stocks/
Jennewine, T., “This Artificial Intelligence (AI) Growth Stock Could Be Worth $3 Trillion by 2024, According to Wall Street,” The Motley Fool, July 13, 2023; https://www.fool.com/investing/2023/07/13/ai-growth-stock-worth-3-trillion-2024-wall-street/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index are trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Evolve ETFs. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

Focusing on Technology Investing Within the NASDAQ-100®

Posted on July 27, 2023December 18, 2023 by Veronica Carlasuc

The resurgence of the technology sector in 2023 has been fueled by a combination of compelling growth prospects in AI and increasingly favourable economic conditions globally. Both factors have led to significant new investments in tech companies that leverage cutting-edge technologies and offer investors high-growth potential and innovation-driven prospects.

And since the NASDAQ® has long been synonymous with “Big Tech,” it is no surprise that the NASDAQ® has so far had a remarkable 2023.

But it may surprise investors to learn that both the broader NASDAQ® and the NASDAQ-100®— an index focused on the largest non-financial companies listed on the NASDAQ® exchange—aren’t that heavily focused on the technology sector.

So why then is the NASDAQ-100® doing so well in 2023? And is there a better solution than the NASDAQ-100® for investors looking for a way to focus their investment on a pure tech play?

It’s because of the outsized role tech companies within the NASDAQ-100® play in the index’s overall returns.

Tech Makes a Comeback in 2023

If you look exclusively at the Technology stocks within the NASDAQ-100® you find that they have contributed an incredible 76.2% of the index’s overall performance in the first half of 2023. Of the top ten companies in the NASDAQ-100®, six—Alphabet, Apple, Broadcom, Meta, Microsoft, and NVIDIA—are in the Technology sector, while two others—Amazon and Tesla—are related in the Consumer Discretionary sector.³

In fact, the Technology sector has consistently outperformed the broader NASDAQ-100® index over the past decade and has propelled most of the index’s returns during that time. It will come as no surprise, then, that as of June 30, 2023, the NASDAQ-100®’s Technology sector exposure, based on ICB Industry classifications, is at a recent high of 61.5%.⁴

That’s because the big story in the technology sector and why it is booming in 2023 has been the growing prominence of AI, as well as moderating inflation and a perceived end to rate hikes.⁵

AI technologies’ enormous potential for revolutionizing various industries and reshaping business models by enhancing efficiency, productivity, and profitability has meant substantial new investment in tech companies leveraging these cutting-edge technologies.

At the same time, decreasing inflation and a perception that the era of rate hikes is nearing its end has meant a renewed interest in growth-oriented investments, with technology companies offering high-growth potential and innovation-driven prospects being particularly sought after.

Many of the Technology sector companies within the NASDAQ-100® are at the forefront of AI development, focused on developing hardware for data-intensive computations, providing cloud infrastructure platforms, and developing cutting-edge AI interface software. As a result, they have been instrumental in driving the technology sector’s resurgence and significantly contributing to the NASDAQ-100®’s overall performance in 2023.

A Pure Tech Play with NDXT10

So if the technology stocks within the NASDAQ-100® are yielding most of the index’s returns, is there a way to access just on the performance of that subset of stocks as an investor?

The NASDAQ-100® Technology Sector Adjusted Market-Cap Weighted™ Index (NDXT10) offers investors a means of further drilling down to track only those elements of the NASDAQ-100® that are pure Technology companies. And, when you do so, the strong performance of the NDXT10 becomes clear.

The NASDAQ-100® Technology Sector Adjusted Market-Cap Weighted™ Index (NDXT10)

Adobe Incorporated

Advanced Micro Devices, Inc.

Alphabet Inc.

Analog Devices, Inc.

ANSYS, Inc.

Apple Inc.

Applied Materials, Inc.

ASML Holding N.V.

Atlassian Corporation (Class A)

Autodesk, Inc.

Broadcom Inc.

Cadence Design Systems, Inc.

Cognizant Technology Solutions Corporation

CrowdStrike Holdings, Inc. (Class A)

Datadog, Inc. (Class A)

Fortinet, Inc.

GLOBALFOUNDRIES Inc.

Intel Corporation

Intuit Inc.

KLA Corporation

Lam Research Corporation

Marvell Technology, Inc.

Meta Platforms Inc. (Class A)

Microchip Technology Incorporated

Micron Technology, Inc.

Microsoft Corporation

NVIDIA Corporation

NXP Semiconductors N.V.

ON Semiconductor Corporation

Palo Alto Networks, Inc.

PDD Holdings Inc. (ADR)

QUALCOMM Incorporated

Synopsys, Inc.

Texas Instruments Incorporated

Workday, Inc. (Class A)

Zoom Video Communications, Inc. (Class A)

Zscaler, Inc.

* Current as of July 27, 2023

The NDXT10 outperformed the NASDAQ-100® by 18.7% (57.5% to 38.8%) on a price return basis in the first half of 2023. It also topped the S&P 500 Information Technology Sector Index (S5INFT) by 15.4% (57.5% to 42.1%) and outpaced the S&P 500 (SPX) as a whole, which was up only 15.9%.⁶ And over the last fove years, the NDXT10 has outperformed the NASDAQ-100® by 21.9% (147.4% to 125.5%).⁷

And, as the AI-driven boom continues to reshape the tech industry, the tech companies in the NDXT10 will remain at the forefront of innovation, driving substantial gains in the stock market.

AI’s Impact on NDXT10 Companies

Among the companies listed in the NDXT10 index, tech giants like NVIDIA, Microsoft, Alphabet, and Meta have been at the forefront of leveraging AI’s potential.

Since the debut of ChatGPT in late 2022, Microsoft and Google have integrated AI functionality into core products such as Microsoft Word and Google Search. As one sign of just how important AI has become in such short a time, Google CEO Sundar Pichai mentioned “AI” 34 times in a recent earnings call, up from just five times a year earlier.⁸

Google’s experimental AI chat service, Bard, operates similarly to ChatGPT but with a key difference—it retrieves information from the web, including images. Bard, like other AI chatbots, can handle coding, math problems, and writing assistance. Recently, it received a significant upgrade, now powered by Google’s advanced large language model, PaLM 2, unveiled at the Google I/O 2023 conference. With this transition, Bard has become more efficient and capable, surpassing its earlier version backed by LaMDA.⁹

Meta, Amazon, and Apple have also made strides in incorporating AI into their technology in the first half of 2023.

Apple, for example, is working on what some developers have nicknamed “Apple GPT,” an AI chatbot meant to rival OpenAI, Alphabet, and Google’s AI offerings.¹⁰ Based on Apple’s own LLM foundation, Ajax, the company so far has no release strategy for its chatbot, but reports suggest that Apple employees already have internal access to the tool and are using it for quick text summaries, queries, and product prototyping.¹¹

But to date, the biggest AI gold rush winner must be chip manufacturer Nvidia. The company’s processors, initially meant for video games, are instrumental in training AI algorithms, and Nvidia now offers specialized products and software for AI training and processing support. Nvidia announced that it expected to sell $11 billion worth of chips in Q2, beating analyst predictions by $4 billion.¹² This announcement sent their stock surging 24% to a market valuation of $1 trillion, and their stock up over 182% so far this year due to demand for its AI tools.¹³

Other NDXT10 companies like Adobe and Apple have also embraced AI, integrating the technology into their products and services. Adobe has incorporated generative AI into its image and video editing software, while Apple has leveraged AI across its range of devices, including smartphones, tablets, and wearable gadgets.¹⁴

As AI continues to drive innovation, NDXT10 companies (which are focused on transformative technology) are well-positioned to thrive in the evolving market landscape. The convergence of AI and technology stocks’ resurgence has positioned the NDXT10 as a focal point for investors seeking exposure to the forefront of technological innovation.

Canada’s First NASDAQ-100® Technology-Focused ETF with QQQT ETF

Looking for ways to take advantage of a pure tech play within the NASDAQ-100®?

QQQT is Canada’s first NASDAQ-100® technology-focused ETF designed to provide investors with exposure to only the “technology company” elements of the NASDAQ-100 Index®.

The new ETF comes in three versions: Canadian dollar hedged Units (QQQT), Canadian dollar unhedged units (QQQT.B) and U.S. dollar unhedged units (QQQT.U).

To learn more about the Evolve NASDAQ Technology Index Fund, please click here: https://evolveetfs.com/qqqt/.

Sources:

Treece, D., “What is NASDAQ?,” Business News Daily, February 21, 2023; https://www.businessnewsdaily.com/3403-nasdaq.html
Bajpai, P., “What is the Nasdaq Composite, and What Companies are in It?,” Nasdaq.com, May 21, 2021; https://www.nasdaq.com/articles/what-is-the-nasdaq-composite-and-what-companies-are-in-it-2021-05-12
Marex, M., “NDXT10™ Index: Accessing the Pure Tech Sector Exposure of the Nasdaq-100®,” Nasdaq, n.d., https://evolve-cdn.tor1.cdn.digitaloceanspaces.com/wp-content/uploads/2023/07/NDXT10-Research.pdf
Ibid
“Evolve Launches Canadian ETF Tracking Nasdaq Technology Index,” Nasdaq, July 12, 2023; https://www.nasdaq.com/articles/evolve-nasdaq-tech-index-qqqt
Marex, M., “NDXT10™ Index: Accessing the Pure Tech Sector Exposure of the Nasdaq-100®,” Nasdaq, n.d., https://evolve-cdn.tor1.cdn.digitaloceanspaces.com/wp-content/uploads/2023/07/NDXT10-Research.pdf
Ibid
De Vynck, G., “The tech industry was deflating. Then came ChatGPT.” The Washington Post, June 4, 2023; https://www.washingtonpost.com/technology/2023/06/04/ai-bubble-tech-industry-outlook/
Ortiz, S., “What is Google Bard? Here’s everything you need to know,” ZDNET, June 1, 2023; https://www.zdnet.com/article/aws-hones-in-on-generative-ai-at-summit-and-unveils-new-ai-projects-here-are-the-highlights/
“Apple’s new AI project: What to expect in the future from ‘Apple GTP,’” HT Tech, July 24, 2023; https://tech.hindustantimes.com/tech/news/apples-new-ai-project-what-to-expect-in-the-future-from-apple-gpt-71690168298155.html
Gurman, M., “Apple Tests ‘Apple GPT,’ Develops Generative AI Tools to Catch OpenAI,” Bloomberg, July 19, 2023; https://www.bloomberg.com/news/articles/2023-07-19/apple-preps-ajax-generative-ai-apple-gpt-to-rival-openai-and-google
De Vynck, G., “The tech industry was deflating. Then came ChatGPT.” The Washington Post, June 4, 2023; https://www.washingtonpost.com/technology/2023/06/04/ai-bubble-tech-industry-outlook/
Mozée, C., “Nvidia achieves $1 trillion market cap for the first time as AI-fueled stock surge continues,” Markets Insider, May 30, 2023; https://markets.businessinsider.com/news/stocks/nvidia-stock-price-ai-artificial-intelligence-trillion-valuation-chipmaker-gpus-2023-5
Marex, M., “NDXT10™ Index: Accessing the Pure Tech Sector Exposure of the Nasdaq-100®,” Nasdaq, n.d., https://evolve-cdn.tor1.cdn.digitaloceanspaces.com/wp-content/uploads/2023/07/NDXT10-Research.pdf

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Nasdaq®, Nasdaq-100®, Nasdaq-100 Index®, Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index are trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Evolve ETFs. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

Evolve Announces Final Distributions for Evolve ETF

Posted on July 25, 2023 by Veronica Carlasuc

TORONTO, July 25, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve“) announces the final income distribution and capital gain distribution amount per unit (the “Distributions“) for the Evolve Slate Global Real Estate Enhanced Yield Fund (the “Evolve ETF“), as indicated in the table below. Evolve will de-list units of the Evolve ETF from the Toronto Stock Exchange (“TSX“) on or about August 8, 2023 with termination date on or about August 10, 2023.

		Final Distributions per Unit
Evolve ETF	TSX Ticker	Income	Capital Gains	Currency
Evolve Slate Global Real Estate Enhanced Yield Fund	BILT	$0.00000	$0.00000	CAD

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). ETFs are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to ETFs. Investors may incur customary brokerage commissions in buying or selling ETFs. Please read the prospectus before investing.

About Evolve Funds Group Inc.

With over $6.5 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) index-based income strategies; (ii) long term investment themes; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook

SOURCE Evolve ETFs

For further information: CONTACT INFORMATION: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT: Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Competition Questions Grow Across Disruptive Industries

Posted on July 24, 2023December 18, 2023 by Veronica Carlasuc

The disruptive nature of the industries included in the Evolve Innovation Index Fund (EDGE ETF) mean that, by nature, transformative change is part of the portfolio. However, June was an interesting study in contrasts. The automotive sector looks to be changing by coming to a consensus on a common EV charging standard for the industry, while the big change in the cloud computing and e-gaming industry was around the nature of competition—between Microsoft and Google in the cloud space and between Microsoft and the rest of the gaming industry should the acquisition of Activision-Blizzard be approved.

Updates on Specific Industries

Automobile Innovation

Rivian Automotive Inc. became the latest EV manufacturer (after Ford and General Motors) to announce it was adopting Tesla Inc.’s electric vehicle charging ports for their vehicles, as Tesla’s ports rapidly become an unofficial industry standard.

Beginning next year, Rivian drivers will be able to access more than 12,000 Tesla superchargers across the United States and Canada. Additionally, Rivian will incorporate Tesla’s North American Charging Standard port into their current and future EV models beginning in 2025.

The availability and dependability of charging infrastructure are crucial factors for wider EV adoption, and the establishment of a unified standard could entice consumers to consider a plug-in EV. Tesla’s charging network is considered highly reliable, having received the highest ranking in a recent J.D. Power survey of EV drivers.¹

Cybersecurity

Okta, Inc. announced the results of its international Secure Sign-In Trends Report, which analyzes billions of monthly logins from around the world to Okta Workforce Identity Cloud. The report shows that across more than sixteen industries the use of multi-factor authentication (MFA) has nearly doubled since 2020 and that MFA represents the best choice in terms of security and convenience for users.

Okta found that MFA adoption by Okta’s workforce customers jumped from 35% to 50% between February and March 2020, ramping up as the pandemic began. By January 2023, Okta found that 90% of administrators and 64% of users were signing in via MFA. While MFA has long been resisted because of the assumption that it trades security for a degraded user experience, the Okta report found that, on average, MFA saved users time and led to fewer failures compared to traditional passwords.2

Cloud Computing

In a June letter to the Federal Trade Commission (FTC), Google accused Microsoft of employing restrictive licensing terms in an effort to establish monopoly control of the cloud market.

An FTC request for input regarding potential anti-competitive practices within the cloud industry prompted the letter. Google specifically targeted Microsoft in its letter, asserting that because of the dominance of Microsoft’s Windows Server and Microsoft Office products in the market, it is challenging for Microsoft clients to explore alternatives to Microsoft’s Azure cloud offering. Google claimed that Microsoft’s licensing restrictions hinder businesses’ ability to diversify their enterprise software providers.

Additionally, Google emphasized the substantial national security and cybersecurity risks associated with monopolistic control of the cloud, citing previous cyberattacks involving Microsoft products, including the SolarWinds breach of 2020.³

E-Gaming

After the U.K.’s competition authority blocked Microsoft’s acquisition of Activision-Blizzard in April, and the E.U. and China joined 37 other countries in giving the deal the green light in May, all eyes turned to await the decision of the U.S. Federal Trade Commission (FTC) as to whether the deal could proceed.⁴

In mid-June, the FTC received a court injunction to temporarily block the acquisition and a U.S. District Court in San Francisco agreed to hold a hearing just days later.

During the weeklong hearing, the court heard testimony From the FTC arguing that the acquisition would harm competition within the video game sector based on concerns that Microsoft could make Activision’s library of games exclusive to its own Xbox console at the expense of other platforms, such as PlayStation. The FTC further argued that controlling Activision’s library of games would also give Microsoft an unfair advantage in the emerging cloud gaming space.⁵

Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick both appeared in court to argue their companies’ commitment to “open platforms and consumer choice,” pledging (as they have already done in other jurisdictions) not to withdraw Activision’s games from rival consoles and citing the potential for backlash and reputational damage amongst the gaming community should they do so.⁶

A decision from the judge hearing the case is expected imminently, as Microsoft and Activision Blizzard have set a drop-dead date of July 18 to terminate the deal if it is not completed. Should the court rule against Microsoft and Activision, the FTC wants to further adjudicate the acquisition in their own internal court before granting any decision—a delay which would likely sink the deal entirely.⁷

Genomics

Recent figures from Stifel, Nicolas & Co. show that mergers and acquisitions in biotech have finally shaken a three-year-long slump. For the year so far, the sector has seen nearly $90 billion in deals done, compared to just $127 billion in all of 2022. Analysts project that the volume of deals will reach as high as $208 billion this year, meaning the sector is on pace for its third-highest M&A year of the last ten years.

Amongst these deals will be the deal struck for Novartis AG to buy Vancouver- and Seattle-based Chinook Therapeutics Inc. for as much as $3.5 billion US in June, largely on the strength of two drugs—atrasentan and zigakibart—the company has pioneered to treat a rare kidney disease that affects an estimated 500,000+ sufferers in the U.S. and Europe, with millions more throughout Japan and Asia.⁸

And count Novo Nordisk’s move to take a controlling stake in BIOCORP as another such deal. In an offer worth 154 million Euros, Novo Nordisk would delist and absorb the French biotech company while maintaining the “agility and entrepreneurial spirit of BIOCORP.”

BIOCORP specialises in medical delivery systems and devices, including Mallya, an innovative Bluetooth-enabled smart add-on device for pen injectors, including the Novo Nordisk FlexTouch pen used by people with diabetes. Novo Nordisk and Mallya have been collaborating since 2021 on commercialising Mallya for the diabetes market as well as other therapy areas.⁹

Fintech

Mastercard announced a hiring push for tech talent across its seven global technology hubs.

Widely recognized as a card company, Mastercard is also in the vanguard of the open banking movement. Consequently, the firm is actively recruiting software architects, product developers specializing in IT and cybersecurity, projects and program managers, as well as professionals with expertise in crypto and artificial intelligence strategy.

The growing need for tech-oriented staff is thanks to the boom in Mastercard’s open banking business, which often sees multiple releases of production code each day, as well as larger projects that will scale globally, each of which may require months of planning and development before they launch.

Tech hires will have the opportunity to work from any of Mastercard’s seven tech hubs, including New York, Dublin, Sydney, and Vancouver. These hubs serve as centres of innovation and collaboration for Mastercard, fostering an environment conducive to cutting-edge ideas and breakthrough solutions.¹⁰

Robotics & Automation

Amazon Web Services (AWS), Amazon’s cloud unit, has announced a $100 million investment to develop a new center to assist companies in utilizing generative artificial intelligence (AI) more effectively. Assistance will come through no-cost workshops, engagements, and training to help customers envision innovative new use cases for AI based on best practices and industry expertise. This move comes both as a recognition of the significance of generative AI, as well as a response to strides made in AI by rivals Microsoft and Google.¹¹

In a similar move, Google announced that its cloud-computing unit would also begin offering consulting services to help clients maximize the utility of generative AI across industries. This new service from Google Cloud will help “identify trends, summarize information, boost automation and generate content,” so that customers get the most from generative AI tools.¹²

5G

June saw a dramatic expansion of 5G access across the United States.

UScellular announced the launch of its 5G mid-band network, giving customers in parts of 10 states up to 10x faster speeds than its 4G LTE network and low-band 5G. The new 5G mid-band network is available mainly in parts of Illinois, Iowa and Wisconsin, with communities in Maine, Missouri, Nebraska, Oklahoma, Oregon, Virginia and Washington also receiving access. By the end of 2023, UScellular expects this network to cover more than 1 million households.¹³

Also in June, Verizon initiated its 5G Ultra Wideband network across parts of Indiana after doing the same a month earlier in Illinois.

The new 5G network will provide customers up to 10x speeds, greater capacity, and enhanced network reliability. This network uses Verizon’s recently acquired C-band spectrum, and when additional bandwidth becomes available at the end of this year, Verizon will be able to provide additional speed and capacity for the full network.¹⁴

Investment in Innovation with EDGE ETF

The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5G, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/ or click here to give your portfolio an EDGE.

Portfolio Strategy and Activity

For the month, Evolve Automobile Innovation Index Fund (CARS) made the largest contribution to the Fund, followed by Evolve Cloud Computing Index Fund (DATA ETF), and Evolve E-Gaming Index ETF (HERO ETF). The largest detractors to performance for the month were BeiGene Ltd, followed by Fiserv Inc and Genmab A/S.

Sources

Ludlow, E., “Rivian Adopts Tesla’s EV Charging Standard, Joining Ford and GM,” Bloomberg, June 20, 2023; https://www.bloomberg.com/news/articles/2023-06-20/rivian-adopts-tesla-s-charging-standard-joining-ford-and-gm
“Use of Multi-Factor Authentication (MFA) Nearly Doubles Since 2020, New Okta Secure Sign-In Trends Reports Finds,” Okta, June 12, 2023; https://investor.okta.com/news-releases/news-release-details/use-multi-factor-authentication-mfa-nearly-doubles-2020-new-okta
Goswami, R. & Elias, J., “Google accuses Microsoft of unfair practices in Azure cloud unit,” CNBC, June 21, 2023; https://www.cnbc.com/2023/06/21/google-accuses-microsoft-of-anticompetitive-practices-in-azure-cloud.html
Fineman, J., “Microsoft’s planned $69B Activision purchase gets China antitrust approval – report,” Seeking Alpha, May 19, 2023; https://seekingalpha.com/news/3973465-microsofts-planned-69b-activision-purchase-gets-china-antitrust-approval-report
Browning, K. & McCabe, D., “Microsoft Says It Could Abandon Activision Deal if Judge Delays It,” The New York Times, June 22, 2023; https://www.nytimes.com/2023/06/22/technology/microsoft-activision-federal-hearing.html
Browning, K., “Microsoft and Activision Chiefs Testify Merger Will Benefit Consumers,” The New York Times, June 28, 2023; https://www.nytimes.com/2023/06/28/business/microsoft-activision-ceo-testify.html
Novet, J., “The biggest takeaways from Microsoft’s courtroom showdown with the FTC over Activision Blizzard,” CNBC, June 30, 2023; https://www.cnbc.com/2023/06/30/microsoft-activision-showdown-with-ftc-biggest-takeaways.html
Silcoff, S., “Novartis buys Chinook for US$3.2-billion, latest in string of big exits for Canadian biotechs,” The Globe and Mail, June 12, 2023; https://www.theglobeandmail.com/business/article-novartis-to-buy-chinook-drug-developer/
“Novo Nordisk enters exclusive negotiations to acquire a controlling stake in BIOCORP, to be followed by a tender offer on all remaining shares,” Novo Nordisk, June 5, 2023; https://www.novonordisk.com/content/nncorp/global/en/news-and-media/news-and-ir-materials/news-details.html?id=166114
Hagy, P., “How payments giant Mastercard is revamping its work culture to lure developers — from free days to work on passion projects to $200,000 salaries,” Business Insider, June 29, 2023; https://www.businessinsider.com/mastercard-hiring-technologist-software-engineer-payments-fintech-2023-6
Novet, J., “AWS is investing $100 million in generative A.I. center in race to keep up with Microsoft and Google,” CNBC, June 22, 2023; https://www.cnbc.com/2023/06/22/aws-invests-100-million-in-generative-ai-as-it-sees-a-long-race-ahead.html
Love, J., “Google Cloud Launches Consulting Services to Help Clients Use AI,” Bloomberg, June 7, 2023; https://www.bloomberg.com/news/articles/2023-06-07/google-cloud-launches-consulting-services-to-help-clients-use-ai
“UScellular Launches 5G Mid-Band Network,” UScellular, June 22, 2023; https://www.prnewswire.com/news-releases/uscellular-launches-5g-mid-band-network-301857138.html
“Verizon lights up 5G Ultra Wideband across Indiana,” Verizon, June 7, 2023; https://www.verizon.com/about/news/verizon-lights-5g-ultra-wideband-across-indiana

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Breakthrough in Pill Form of New Weight Loss Drugs

Posted on July 21, 2023December 18, 2023 by Veronica Carlasuc

There continues to be a gold rush around weight loss drugs in the pharmaceutical sector, with several major players releasing new data in June for what promises to be the next frontier in obesity treatment: a daily weight loss pill.

Novo Nordisk has released phase three clinical trial results for a high-dose semaglutide tablet—the same drug used in the injectable (and incredibly popular) Wegovy and Ozempic treatments. The results showed subjects receiving the semaglutide tablet lost 15% of their total starting body weight after 17 months versus just a 2.4% decrease for those on the placebo.¹ Novo Nordisk will seek FDA approval for this oral treatment later this year.

At the same time, Eli Lilly is in phase three clinical trials for its oral weight loss drug, orforglipron. Stage two results, also released in June, show that subjects receiving the orforglipron tablet lost 14.7% of their total starting body weight after nine months versus just a 2.3% decrease for those on the placebo.²

Given its comparable effectiveness to Novo Nordisk’s tablet, many analysts expect Eli Lilly’s drug to have a competitive advantage—the same results in half the time—if these results hold up during the phase three trial.³

This news comes as Eli Lilly & Co became the largest pharmaceutical company in the world by market value in June. An 8.5% gain in share price in May put the company’s market cap around $408 billion. Marking a third straight month of gains for Eli Lilly, the company’s shares have been driven up by announcements that its diabetes drug Mounjaro is effective against obesity and news that its new Alzheimer’s treatment succeeded in a final-stage trial.⁴

And across the industry, recent figures from Stifel, Nicolas & Co. show that mergers and acquisitions in biotech have finally shaken its three-year-long slump. For the year so far, the sector has seen nearly $90 billion in deals done, compared to just $127 billion in all of 2022. Analysts project that the volume of deals will reach as high as $208 billion this year, meaning the sector is on pace for its third-highest M&A year of the last ten years.⁵

Specific Updates on Companies

Novartis AG

Novartis AG agreed to buy Vancouver- and Seattle-based Chinook Therapeutics Inc. for $3.2 billion US in June, largely on the strength of two drugs the company has developed to treat a rare kidney disease. Chinook shareholders also have the potential to earn another $4 a share if the company meets additional milestones prior to regulatory approval, which would bring the deal to $3.5 billion when it closes in the second half of the year.

Chinook has pioneered two drugs—atrasentan and zigakibart—for the treatment of IgA nephropathy, also known as Berger’s disease, which causes inflammation and fibrosis in the kidneys, ultimately leading to kidney failure. There are an estimated 500,000+ sufferers in the U.S. and Europe, with millions more throughout Japan and Asia.⁶

Chinook reported promising preliminary results from both drugs in 2022 and released follow-up data this June. The results of the ongoing phase 1/2 study of zigakibart show that the drug is well-tolerated and that it promotes rapid, sustained, and clinically meaningful reductions in biomarkers for IgA nephropathy. Levels were reduced 67% at 76 weeks of treatment and 72% by 100 weeks of treatment.⁷ A large efficacy trial for atrasentan will report results next year, but preliminary data (also released in June) shows it is generally well tolerated in healthy volunteers.⁸

Novo Nordisk A/S

Novo Nordisk A/S announced in June that it was in exclusive negotiations to take a controlling stake in BIOCORP that would see the French biotech company delisted and absorbed into Novo Nordisk. The deal is worth 154 million Euros.

Novo Nordisk plans to maintain the “agility and entrepreneurial spirit of BIOCORP,” while leveraging their cutting-edge devices in markets around the globe to serve those with serious chronic diseases.⁹

An Easy Way to Invest in Global Healthcare with LIFE ETF

Looking to add cutting-edge healthcare to your portfolio? Investing in ETFs can be one strategy.

Portfolio Strategy and Activity

For the month, Intuitive Surgical Inc made the largest contribution to the Fund, followed by Eli Lilly & Co and Stryker Corporation. The largest detractors to performance for the month were CSL Ltd., followed by Roche Ltd and Pfizer Inc. For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Sources

Knop, F., Aroda, V., et al., “Oral semaglutide 50 mg taken once per day in adults with overweight or obesity (OASIS 1): a randomised, double-blind, placebo-controlled, phase 3 trial,” The Lancet, June 25, 2023; https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(23)01185-6/fulltext
“Lilly’s phase 2 results published in the New England Journal of Medicine show orforglipron, a once-daily oral nonpeptide GLP-1 receptor agonist, achieved up to 14.7% mean weight reduction at 36 weeks in adults with obesity or overweight,” Eli Lilly, June 23, 2023; https://investor.lilly.com/news-releases/news-release-details/lillys-phase-2-results-published-new-england-journal-medicine
Constantino, A.K., “As drugmakers race to develop the next big weight loss pill, Eli Lilly may have an edge,” CNBC, June 28, 2023; https://www.cnbc.com/2023/06/28/eli-lilly-pfizer-novo-nordisk-weight-loss-pills.html
Adegbesan, A. & Langreth, R., “Obesity Shot Frenzy Makes Eli Lilly World’s Most Valuable Drugmaker,” Bloomberg, May 31, 2023; https://www.bloomberg.com/news/articles/2023-05-31/obesity-shot-frenzy-makes-lilly-lly-world-s-most-valuable-drugmaker
Silcoff, S., “Novartis buys Chinook for US$3.2-billion, latest in string of big exits for Canadian biotechs,” The Globe and Mail, June 12, 2023; https://www.theglobeandmail.com/business/article-novartis-to-buy-chinook-drug-developer/
Ibid
“Chinook Therapeutics to Present Updated Data from Zigakibart (Bion-1301) Phase 1/2 Trial in Patients with IgA Nephropathy (IgAN) at the 60th European Renal Association (ERA) Congress,” Chinook Therapeutics, June 12, 2023; https://investors.chinooktx.com/news-releases/news-release-details/chinook-therapeutics-present-updated-data-zigakibart-bion-1301
“Chinook Therapeutics Presents Data from CHK-336 Phase 1 Trial in Healthy Volunteers and New Insights into the Role of Failed Repair in Chronic Kidney Disease at the 60th European Renal Association (ERA) Congress,” Chinook Therapeutics, June 17, 2023; https://investors.chinooktx.com/news-releases/news-release-details/chinook-therapeutics-presents-data-chk-336-phase-1-trial-healthy
“Novo Nordisk enters exclusive negotiations to acquire a controlling stake in BIOCORP, to be followed by a tender offer on all remaining shares,” Novo Nordisk, June 5, 2023; https://www.novonordisk.com/content/nncorp/global/en/news-and-media/news-and-ir-materials/news-details.html?id=166114

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Evolve Announces July 2023 Distributions for Certain Evolve Funds

Posted on July 21, 2023July 24, 2023 by Veronica Carlasuc

TORONTO, July 21, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve”) is pleased to announce the distribution amounts per unit (the “Distributions”) for certain funds (the “Evolve Funds”), for the period ending July 31, 2023, as indicated in the table below.

The ex-dividend date for the Distributions is anticipated to be July 28, 2023, for all Evolve Funds except for the High Interest Savings Account Fund (“HISA”), US High Interest Savings Account Fund (“HISU.U”), Premium Cash Management Fund (“MCAD”) and US Premium Cash Management Fund (“MUSD.U”). The ex-dividend date for the Distributions for HISA, HISU.U, MCAD and MUSD.U is anticipated to be July 27, 2023. Unitholders of HISA, HISU.U, MCAD and MUSD.U with record on July 27, 2023 and unitholders of all other Evolve Funds with record on July 31, 2023 will receive cash distributions payable on or about August 8, 2023.

Evolve Funds	Ticker Symbol	Distribution per Unit	Frequency
Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund	BANK	$0.09300	Monthly
Evolve Global Materials & Mining Enhanced Yield Index ETF	BASE BASE.B	$0.20000 $0.20000	Monthly Monthly
Evolve Slate Global Real Estate Enhanced Yield Fund	BILT	$0.15000	Monthly
Evolve US Banks Enhanced Yield Fund	CALL CALL.B CALL.U	$0.12500 $0.12500 USD $0.12500	Monthly Monthly Monthly
Evolve Automobile Innovation Index Fund	CARS CARS.B CARS.U	$0.02000 $0.02000 USD $0.02000	Monthly Monthly Monthly
Evolve Cyber Security Index Fund	CYBR CYBR.B CYBR.U	$0.01000 $0.01000 USD $0.01000	Monthly Monthly Monthly
Evolve Cloud Computing Index Fund	DATA DATA.B	$0.01000 $0.01000	Monthly Monthly
Evolve Active Canadian Preferred Share Fund	DIVS	$0.07000	Monthly
Evolve Active Global Fixed Income Fund	EARN	$0.12500	Monthly
Evolve European Banks Enhanced Yield ETF	EBNK EBNK.B EBNK.U	$0.06000 $0.06000 USD $0.06000	Monthly Monthly Monthly
Evolve S&P 500^® Enhanced Yield Fund	ESPX ESPX.B ESPX.U	$0.15500 $0.15500 USD $0.15500	Monthly Monthly Monthly
Evolve S&P/TSX 60 Enhanced Yield Fund	ETSX	$0.16000	Monthly
Evolve Active Core Fixed Income Fund	FIXD	$0.05500	Monthly
High Interest Savings Account Fund	HISA	$0.19876	Monthly
US High Interest Savings Account Fund	HISU.U	USD $0.40512	Monthly
Evolve Future Leadership Fund	LEAD LEAD.B LEAD.U	$0.10500 $0.10500 USD $0.10500	Monthly Monthly Monthly
Evolve Global Healthcare Enhanced Yield Fund	LIFE LIFE.B LIFE.U	$0.16000 $0.16000 USD $0.16000	Monthly Monthly Monthly
Premium Cash Management Fund	MCAD	$0.38566	Monthly
US Premium Cash Management Fund	MUSD.U	USD $0.40036	Monthly
Evolve FANGMA Index ETF	TECH TECH.B TECH.U	$0.00160 $0.00160 USD $0.00160	Monthly Monthly Monthly

Distributions for the funds will vary from period to period. For further information regarding the Distributions, please visit www.evolveetfs.com

About Evolve Funds Group Inc.

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The S&P 500^® Index and the S&P/TSX 60 Index are each a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI“), and has been licensed for use by the Evolve Funds. S&P^® and S&P 500^® are trademarks of S&P Global, Inc. or its affiliates (“S&P“); Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones“). It is not possible to invest directly in an index. The Evolve Funds are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, “S&P Dow Jones Indices“). S&P Dow Jones Indices does not make any representation or warranty, express or implied, to the owners of the Evolve Funds or any member of the public regarding the advisability of investing in securities generally or in the Evolve Funds particularly or the ability of the S&P 500^® Index and the S&P/TSX 60 Index to track general market performance. Past performance of an index is not an indication or guarantee of future results. S&P Dow Jones Indices’ only relationship to the Evolve Funds with respect to the S&P 500^® Index and the S&P/TSX 60 Index is the licensing of the Indexes and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The S&P 500^® Index and the S&P/TSX 60 Index are determined, composed and calculated by S&P Dow Jones Indices without regard to the Evolve Funds. S&P Dow Jpones Indices have no obligation to take the needs of the Evolve Funds or the owners of the Evolve Funds into consideration in determining, composing or calculating the S&P 500^® Index and the S&P/TSX 60 Index. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of the Evolve Funds. There is no assurance that investment products based on the S&P 500^® Index or the S&P/TSX 60 Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an “investment adviser, commodity trading advisory, commodity pool operator, broker dealer, fiduciary, promoter” (as defined in the Investment Company Act of 1940, as amended), “expert” as enumerated within 15 U.S.C. s. 77k(a) or tax advisor. Inclusion of a security, commodity, crypto currency or other asset within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, commodity, crypto currency or other asset, nor is it considered to be investment advice or commodity trading advice.

S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P 500^® INDEX AND THE S&P/TSX 60 INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY THE EVOLVE FUNDS, THE OWNERS OF THE EVOLVE FUNDS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500^® INDEX AND THE S&P/TSX 60 INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. S&P DOW JONES INDICES HAS NOT REVIEWED, PREPARED AND/OR CERTIFIED ANY PORTION OF, NOR DOES S&P DOW JONES INDICES HAVE ANY CONTROL OVER, THE LICENSEE PRODUCT REGISTRATION STATEMENT, PROSPECTUS OR OTHER OFFERING MATERIALS. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND THE EVOLVE FUNDS OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.

SOURCE Evolve ETFs

For further information: Evolve ETFs, info@evolveetfs.com, t.416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT, Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Microsoft, Google, and Amazon’s Strategies for Cloud Dominance Revealed

Posted on July 19, 2023December 18, 2023 by Veronica Carlasuc

In a June letter to the Federal Trade Commission (FTC), Google accused Microsoft of employing restrictive licensing terms in an effort to establish monopoly control of the cloud market.

Closer to home, Toronto-based artificial intelligence company Cohere raised US$270 million in June from investors that include chipmaker Nvidia Corp, Salesforce Ventures, and software company Oracle Corp (held by the Fund).

Cohere builds language models that can power cloud-based chatbots and search engines, and current clients include Spotify, legal tech company Casetext, and customer service provider LivePerson.

In 2017, one of Cohere’s founders co-authored a research paper outlining a novel method for computers to produce and interpret language, and that technique is now standard in large language models.²

Oracle Corp

Oracle has announced its move to a new type of processor for the first time in decades. Oracle revealed that the latest version of its database software is now compatible with chips from Ampere Computing, a five-year-old Santa Clara, California-based startup. Customers can now run Oracle’s database on servers powered by Ampere’s processors, whether on Oracle’s cloud service or their own on-premises servers.

The processors from Ampere Computing incorporate technology from Arm Ltd., a UK-based company, and offer enhanced performance at a significantly reduced cost. Oracle describes its transition to this new chip architecture as “the future” of cloud computing, indicating a shift away from Intel’s technology leading to superior performance at a more affordable price point.³

Amazon.com, Inc

Amazon Web Services (AWS), Amazon’s cloud unit, has announced a $100 million investment to develop a new center to assist companies in utilizing generative artificial intelligence (AI) more effectively. Assistance will come through no-cost workshops, engagements, and training to help customers envision innovative new use cases for AI based on best practices and industry expertise.⁴ This move comes both as a recognition of the significance of generative AI, as well as a response to strides made in AI by rivals Microsoft and Google.

Andy Jassy, CEO of AWS, said he believes generative AI will be the next major innovation driving customer adoption of cloud services, reversing the recent slowdown in customer spending on cloud. He emphasized the importance of cloud infrastructure for AI computing. “Really, you need the cloud for generative AI,” Jassy said in a recent interview.

He believes that with Amazon’s Bedrock generative AI service, Titan language models, and the newly established innovation center, AWS and Amazon are well-positioned to continue their dominance in the cloud infrastructure and services market.⁵

Investing in Cloud Computing with DATA ETF

Portfolio Strategy and Activity

For the month, Oracle Corp made the largest contribution to the Fund, followed by Amazon.com, Inc and Intuit Inc. The largest detractors to performance for the month were Salesforce Inc, followed by Alphabet Inc and Okta Inc. To learn more about DATA ETF, please click here: https://evolveetfs.com/data/.

Sources

Goswami, R. & Elias, J., “Google accuses Microsoft of unfair practices in Azure cloud unit,” CNBC, June 21, 2023; https://www.cnbc.com/2023/06/21/google-accuses-microsoft-of-anticompetitive-practices-in-azure-cloud.html
Castaldo, J., “Canadian AI company Cohere raises US$270-million from Inovia, NVIDIA, Oracle and Salesforce Ventures,” The Globe and Mail, June 8, 2023; https://www.theglobeandmail.com/business/article-ai-cohere-fundraising-inovia-nvidia-oracle-salesforce/
King, I., “Oracle Expands Database to Ampere Chips, Dealing a Blow to Intel,” Bloomberg, June 28, 2023; https://www.bloomberg.com/news/articles/2023-06-28/oracle-expands-database-to-ampere-chips-dealing-a-blow-to-intel
“AWS Announces Generative AI Innovation Center,” Amazon, June 22, 2023; https://press.aboutamazon.com/2023/6/aws-announces-generative-ai-innovation-center
Novet, J., “AWS is investing $100 million in generative A.I. center in race to keep up with Microsoft and Google,” CNBC, June 22, 2023; https://www.cnbc.com/2023/06/22/aws-invests-100-million-in-generative-ai-as-it-sees-a-long-race-ahead.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cybersecurity Gets a Boost from Growing Use of Multi-Factor Authentication

Posted on July 17, 2023July 27, 2023 by Veronica Carlasuc

Several companies and the provincial government of Nova Scotia reported breaches in June related to a flaw in the secure file transfer product MOVEit from Progress Software Corp. The exploit allowed the theft of files companies had uploaded to MOVEit, meaning potentially thousands of companies were impacted.

While Progress Software released a patch within days, it came only after the U.S. Department of Homeland Security, the U.K. National Cyber Security Centre, and Microsoft all released alerts and after British Airways and Boots, a U.K. pharmacy chain, reported losing control of the personal data of an unknown number of employees numbering “in the thousands,” including names, dates of birth, and possibly even banking details through a cyberattack on their payroll provider, Zellis, which used MOVEit. The BBC also confirmed it had suffered a breach via Zellis, but the extent of the compromise remained under investigation.¹

It was timely, then, that also in June, Okta, Inc. announced the results of its international Secure Sign-In Trends Report, which analyzes billions of monthly logins from around the world to Okta Workforce Identity Cloud. The report shows that across more than sixteen industries the use of multi-factor authentication (MFA) has nearly doubled since 2020 and that MFA represents the best choice in terms of security and convenience for users.

By industry, Okta found that (perhaps unsurprisingly) the tech sector is farthest along in MFA logins (87%), with Insurance (77%), Professional Services (75%), Construction (74%), and Media & Communications (72%) making up the rest of the top five. The report also found that smaller organizations with 300 employees or fewer were better at MFA sign-ins (79%) than businesses with 20,000+ employees (54%).

While much resistance to MFA is due to the assumption that it trades security for a degraded user experience, the Okta report found that, on average, MFA saved users time and led to fewer failures compared to traditional passwords.²

CrowdStrike Inc

CrowdStrike announced a strategic collaboration with Amazon Web Services (AWS) to develop cutting-edge cybersecurity-oriented generative AI applications. The partnership also includes cloud-based security solutions tailored to the needs of customers building and securing their generative AI apps.

In leveraging the advanced generative AI capabilities of Amazon Bedrock, CrowdStrike will provide customers access to enhanced search capabilities, robust reporting mechanisms, and streamlined automation processes within CrowdStrike’s Falcon cybersecurity platform.

This partnership is already yielding fruit in developing CrowdStrike’s Charlotte AI, an AI-powered security analyst. By harnessing Amazon Bedrock, Charlotte AI enables customers to leverage the power of natural language queries for advanced threat detection, investigation, and response within CrowdStrike Falcon.

Legitimate security concerns exist about malicious tampering with AI training data and the potential for inadvertent release of sensitive information used in LLM queries. By pooling their expertise, CrowdStrike and AWS can help safeguard the cybersecurity of customers engaging with a range of AI and ML services in the cloud.³

Fortinet Inc

Fortinet announced new partnerships with 11 managed security service providers (MSSPs) to adopt Fortinet Secure SD-WAN. This strategic decision by these MSSPs aims to drive improved business outcomes and enhance customer experiences. New adopters include Kyndryl, Globe Business, InfiniVAN, Inc., KT Corporation, and Tata Teleservices, amongst others.

Fortinet’s secure networking solutions bring together networking and security capabilities, creating a robust platform that can easily expand across various domains such as SD-WAN, SASE, SD-Branch, and ZTNA. What sets Fortinet apart is its ability to integrate all such functionality within a single operating system, FortiOS.

This comprehensive integration across solutions opens new avenues for revenue generation for MSSP partners. Moreover, it offers an opportunity to assist customers in securely reducing complexity and enhancing digital experiences. In fact, a recent study by Forrester revealed that companies leveraging Fortinet Secure SD-WAN have witnessed an average of 300% return on investment over three years, along with a 65% reduction in network disruptions, amongst other notable benefits.

Gartner predicts the managed SD-WAN market will reach $8.8 billion by 2026, a CAGR of 20.2%. This projection underscores the significance of Fortinet’s Secure SD-WAN solution in meeting the evolving demands of the market.⁴

Diversified Investing in Cybersecurity with CYBR ETF

Portfolio Strategy and Activity

For the month, Palo Alto Networks Inc made the largest contribution to the Fund, followed by Booz Allen Hamilton and Fortinet Inc. The largest detractors to performance for the month were Okta Inc, followed by SentinelOne Inc and CrowdStrike Inc.

Sources

Turton, W., “Hacking Spree Feared After Breach of File-Sharing Software,” Bloomberg, June 5, 2023; https://www.bloomberg.com/news/articles/2023-06-05/hacking-spree-hits-british-airways-as-experts-warn-of-extortion
“Use of Multi-Factor Authentication (MFA) Nearly Doubles Since 2020, New Okta Secure Sign-In Trends Reports Finds,” Okta, June 12, 2023; https://investor.okta.com/news-releases/news-release-details/use-multi-factor-authentication-mfa-nearly-doubles-2020-new-okta
“CrowdStrike to Accelerate Development of AI in Cybersecurity with AWS,” CrowdStrike, May 31, 2023; https://www.crowdstrike.com/press-releases/crowdstrike-and-aws-to-accelerate-ai-development-in-cybersecurity/
“Fortinet Expands Global Secure SD-WAN and SASE Presence with New MSSP Partnerships,” Fortinet, June 07, 2023; https://investor.fortinet.com/news-releases/news-release-details/fortinet-expands-global-secure-sd-wan-and-sase-presence-new-mssp

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Will Apple’s New AR Headset Revolutionize the Metaverse?

Posted on July 13, 2023December 18, 2023 by Veronica Carlasuc

Apple introduced their long-awaited augmented reality headset in June.

Called Apple Vision Pro, the headset promises to “seamlessly” combine the real world with digital elements. While the Vision Pro is aimed at augmented reality experiences, it can also switch to full virtual reality using a dial. The headset has a separate battery pack and can be controlled using eye movements, hand gestures, and voice commands. Users can give voice commands, and a wide range of familiar iPhone and iPad apps will automatically be compatible with the headset.¹

Priced at $3,499, Apple Vision Pro will launch early next year in the United States and roll out to other countries later in 2024.

Experts, including Mark Zuckerberg and Tim Cook, all see the next era of personal computing as one dominated by the metaverse, virtual worlds, and interactive 3D objects.² As a result, the race to dominate the headset market is on. That goes a long way to explaining why the day after its big Vision Pro announcement, Apple wasted no time in buying an AR headset startup called Mira, which has deals in place with Nintendo theme parks and contracts with the U.S. military.³

Shanghai, China’s largest city and financial capital, announced a plan in June to build 30 culture and tourism metaverse projects by the end of 2025 to help spur a local metaverse tourism industry that could generate as much as 50 billion yuan (US$6.9 billion) within two years.

The city’s focus will be on “smart tourism” and incorporate virtual performances by what they term “virtual idols,” digital public artwork on blockchains, and integrating metaverse technologies into real-world tourist attractions to give visitors augmented reality options, such as having avatar tour guides.⁴

SoftBank-backed virtual reality startup Improbable has unveiled its plan for a network of “interoperable Web3 metaverses” called MSquared. The project aims to create 3D virtual spaces where thousands of users can live, work, and interact with each other. Improbable has partnered with Google, Nvidia, and Japanese cloud gaming firm Ubitus to provide the necessary technical infrastructure for the metaverse network. The service will be accessible through cloud streaming, similar to how movies and TV shows stream online, eliminating the need for software downloads. Last. Year, Improbable raised $150 million from investors for work on the MSquared project.⁵

Industry Updates on Specific Companies

Unity Software Inc

Unity launched a dedicated AI marketplace in its Unity Asset Store aimed at helping developers leverage AI to create and grow real-time 3D (RT3D) content for use in video games and metaverse applications. The AI tools available will include professional-quality solutions from Unity, as well as community-built solutions and cutting-edge AI technology. The new marketplace will act as a central hub for developer tools, allowing them to find AI solutions more easily. Tools will include generative 3D AI that will simplify the creation of assets and virtual worlds, producing them in a fraction of the current time, using natural language to help 3D artists render and texture objects, and apply real-time simulation and lifelike physics in virtual worlds.⁶

eXp World Holdings Inc

eXp World Holdings released updates to its metaverse offerings in June, including Virbela and Frame.

Virbela and Frame provide organizations with virtual environments to create new workflows and help reduce overhead and travel costs while keeping employees in touch and collaborating across distances.

Updates to Virbela include a new virtual campus that looks and feels like a modern city. The most advanced enterprise metaverse available for remote work today, Virbela’s new diverse avatar system and integration with Zoom will roll out later in 2023.

Frame updates include support for 150 simultaneous users, new virtual meeting environments, and a “Connections” feature to help you easily find colleagues in the metaverse. Frame also recently launched an app version for Microsoft Teams that was featured at Microsoft Build.⁷

Investing in the Metaverse with MESH ETF

Looking to invest in the Metaverse? The Evolve Metaverse ETF (MESH ETF), is Canada’s first metaverse ETF. MESH ETF provides investors with an actively managed diversified portfolio of companies involved in the development of the metaverse.

Portfolio Strategy and Activity

For the month, Unity Software Inc made the largest contribution to the Fund, followed by eXp World Holdings Inc and Adobe Systems Incorporated. The largest detractors to performance for the month were Advanced Micro Devices Inc, followed by Sony Group Corp and Roblox Corp.

To learn more about MESH ETF, please click here: https://evolveetfs.com/mesh/.

Sources

Robertson, A., “Apple Vision Pro is Apple’s new $3,499 AR headset,” The Verge, June 5, 2023; https://www.theverge.com/2023/6/5/23738968/apple-vision-pro-ar-headset-features-specs-price-release-date-wwdc-2023
Vanian, J., “Meta’s heated rivalry with Apple enters new phase as the tech giants go after headsets,” CNBC, June 5, 2023; https://www.cnbc.com/2023/06/05/meta-apple-rivalry-enters-new-phase-as-tech-giants-go-after-headsets.html
Schiffer, Z. & Heath, A., “Apple has bought an AR headset startup called Mira,” The Verge, June 6, 2023; https://www.theverge.com/2023/6/6/23751350/apple-mira-ar-headset-startup
Zuo, T., “Shanghai targets US$6.9 billion metaverse revenue from culture, tourism projects,” Yahoo Finance, June 27, 2023; https://finance.yahoo.com/news/shanghai-targets-us-6-9-043537652.html
Browne, R., “SoftBank-backed startup Improbable outlines plan for metaverse to rival Microsoft, Meta,” CNBC, June 16, 2023; https://www.cnbc.com/2023/06/16/softbank-backed-improbable-outlines-plan-for-msquared-metaverse.html
“Unity Launches New AI Marketplace as Premier Destination for AI Solutions,” Unity Software, June 27, 2023; https://investors.unity.com/news/news-details/2023/Unity-Launches-New-AI-Marketplace-as-Premier-Destination-for-AI-Solutions/default.aspx
“eXp World Holdings Continues to Innovate and Expand Its Metaverse Offerings,” eXp World Holdings, June 21, 2023; https://expworldholdings.com/press-releases/exp-world-holdings-continues-to-innovate-and-expand-its-metaverse-offerings/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Evolve NASDAQ Technology Index Fund Begins Trading Today on TSX

Posted on July 12, 2023July 12, 2023 by Veronica Carlasuc

TORONTO, July 12, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve“) is pleased to announce that the Evolve NASDAQ Technology Index Fund (“QQQT” or the “Fund“) has closed initial offering of units and will begin trading on the Toronto Stock Exchange (“TSX“) today under the ticker symbol QQQT.

QQQT seeks to replicate, to the extent reasonably possible and before fees and expenses, the performance of the Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index, or any successor thereto (the “Index“). The Index is designed to measure the performance of the technology companies in the Nasdaq-100 Index^®, which measures the performance of 100 of the largest non-financial companies listed on Nasdaq. The Index consists of a selection of securities in the Nasdaq-100 Index^® which must be classified as a “technology company” (i.e., any company classified under the “technology industry”) according to the Industry Classification Benchmark (ICB). No issuer weight may exceed 10% of the Index.

The Fund will be market-capitalization-weighted and rebalanced quarterly. The following chart sets out the TSX Ticker Symbol for the Units of the Fund:

	TSX Ticker Symbol
	CAD Hedged Units	CAD Unhedged Units	USD Unhedged Units
Evolve NASDAQ Technology Index Fund	QQQT	QQQT.B	QQQT.U

About Evolve Funds Group Inc.

With over $6.4 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook | Youtube

Nasdaq^®, Nasdaq-100^®, Nasdaq-100 Index^®, Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index are trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Evolve ETFs. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

SOURCE Evolve ETFs

For further information: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT: Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Microsoft’s $69 Billion Acquisition of Video Game Maker Activision Blizzard Hangs in the Balance

Posted on July 11, 2023December 18, 2023 by Veronica Carlasuc

The big story in the E-gaming world continues to be the saga of Microsoft’s attempt to close its $69 billion acquisition of Activision Blizzard (held by the Fund).

After the U.K.’s competition authority blocked the acquisition in April, and the E.U. and China joined 37 other countries in giving the deal the green light in May, all eyes turned to await the decision of the U.S. Federal Trade Commission (FTC) as to whether the deal could proceed.¹

In mid-June, the FTC received a court injunction to temporarily block the acquisition and a U.S. District Court in San Francisco agreed to hold a hearing just days later.

Updates on Specific Companies

NetEase Inc

NetEase and Warner Bros. Games announced the release of their highly anticipated, free-to-play mobile game, Harry Potter: Magic Awakened, based on the bestselling book and movie series. The game is a collectible card roleplay game (RPG) set in the world of Harry Potter. The game saw its global launch as free-to-play on both the App Store for iOS and Google Play for Android. Co-developed and co-published by NetEase and Warner Bros. Games, Harry Potter: Magic Awakened is the latest release under the Portkey Games label. Portkey focuses on mobile and platform videogame experiences inspired by the world of the Harry Potter franchise.⁵

Take-Two Interactive Software, Inc.

Take-Two Interactive Software’s publishing label Private Division, in partnership with boutique game studio Evening Star, announced a new character-driven platforming action game, Penny’s Big Breakaway, set to arrive on Nintendo Switch, PlayStation 5, Xbox Series X|S, and PC in early 2024. The stylized, colourful adventure game will see players in the role of Penny as she tries to escape a variety of challenging levels. Penny’s Big Breakaway is not yet rated by the ESRB.⁶

Diversified Investing in Video Games with HERO ETF

Portfolio Strategy and Activity

For the month, NetEase Inc made the largest contribution to the Fund, followed by Nintendo Ltd and Take-Two Interactive Software, Inc. The largest detractors to performance for the month were Roblox Corp, followed by Nexon Co Ltd and Netmarble Corp. To learn more about HERO ETF, please click here: https://evolveetfs.com/hero/.

Sources

Fineman, J., “Microsoft’s planned $69B Activision purchase gets China antitrust approval – report,” Seeking Alpha, May 19, 2023; https://seekingalpha.com/news/3973465-microsofts-planned-69b-activision-purchase-gets-china-antitrust-approval-report
Browning, K. & McCabe, D., “Microsoft Says It Could Abandon Activision Deal if Judge Delays It,” The New York Times, June 22, 2023; https://www.nytimes.com/2023/06/22/technology/microsoft-activision-federal-hearing.html
Browning, K., “Microsoft and Activision Chiefs Testify Merger Will Benefit Consumers,” The New York Times, June 28, 2023; https://www.nytimes.com/2023/06/28/business/microsoft-activision-ceo-testify.html
Novet, J., “The biggest takeaways from Microsoft’s courtroom showdown with the FTC over Activision Blizzard,” CNBC, June 30, 2023; https://www.cnbc.com/2023/06/30/microsoft-activision-showdown-with-ftc-biggest-takeaways.html
“Warner Bros. Games and NetEase Announce the Worldwide Launch of Harry Potter: Magic Awakened,” NetEase, June 27, 2023; https://ir.netease.com/news-releases/news-release-details/warner-bros-games-and-netease-announce-worldwide-launch-harry
“Private Division and Evening Star Announce Penny’s Big Breakaway,” BusinessWire, June 21, 2023; https://www.businesswire.com/news/home/20230621006468/en/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How Tesla’s Charging Network Standardization Impacts the EV Industry

Posted on July 10, 2023December 18, 2023 by Veronica Carlasuc

In June, the automobile industry witnessed significant developments in the realm of electric vehicles (EVs) and charging infrastructure. The decision by Swedish automaker Volvo to adopt Tesla’s charging design marks an important step towards standardizing EV charging across the sector. This move, in line with similar decisions by Ford, GM, and Rivian, reinforces Tesla’s influence in shaping the future of EV infrastructure.¹ Additionally, SAE International aims to establish an industry standard configuration of Tesla’s charging connector, engaging with Tesla, Ford, GM, and other automakers, further solidifying the push towards standardization.²

Furthermore, Ford Motor received a conditional $9.2 billion loan from a US government program to construct three battery factories, a significant step in President Joe Biden’s green technology-focused industrial policy.³ This deal, the biggest government backing for a US automaker since the 2009 financial crisis, aligns with President Biden’s aggressive green technologies initiative and significantly bolsters Ford’s EV production ambitions. The loan will aid in the construction of these battery factories, bringing Ford closer to its expansion goals and providing low-interest financing through taxpayer support.

Overall, the developments in June indicate the increasing collaboration and adoption of innovative technologies in the automobile industry. The partnership between Tesla and other EV manufacturers for charging infrastructure showcases the industry’s recognition of Tesla’s extensive network and standardization efforts. Simultaneously, Ford’s substantial loan and plans for three battery factories highlight the government’s support for American manufacturers in the pursuit of electric mobility. These advancements in EV technology and infrastructure contribute to the overall growth and potential of the automobile innovation ETF, reflecting the industry’s progress and future prospects in the electric vehicle space.

XPeng Inc

XPeng Inc had an impressive performance in June 2023, with its American Depository Shares (ADS) surging by an astonishing 67.33%. A notable development that contributed to this surge was the company receiving approval to roll out its assisted driving technology in Beijing. This followed the successful introduction of XPeng’s urban scenario driver-assist technology in Shanghai, Shenzhen, and Guangzhou earlier in the year. Significantly, XPeng is currently the only automaker in China that matches Tesla in offering this level of driver-assist technology. ⁴

Another contributing factor to XPeng’s remarkable rally was the pricing strategy it adopted for its new G6 sport utility vehicle (SUV). The company priced the G6 SUV approximately 20% lower than Tesla’s Model Y in China, which resulted in an over 11% jump in its U.S.-listed shares. This aggressive pricing strategy is expected to bolster XPeng’s competitive position in the Chinese market, which is the largest global market for electric vehicles.⁵

Blink Charging Co

In June, the electric vehicle charging infrastructure landscape experienced a major shift with the announcement that automakers such as Volvo, Ford, GM, and Rivian have signed deals with Tesla for utilizing its charging network. This has signaled that Tesla’s charging technology is on the fast track to become the standard for EV charging, as more manufacturers continue to sign on.

In light of these developments, Blink Charging Co’s outlook is under scrutiny. With Tesla likely emerging as a dominant force in the EV charging space, Blink Charging may face increased competition and challenges in expanding its market share. However, the company could still find opportunities in niche markets or by establishing partnerships with automakers or other stakeholders who are yet to commit to Tesla’s charging standards. It will be crucial for Blink Charging to adapt its strategy in response to the industry’s evolution and explore innovative solutions to maintain relevance and competitiveness.⁶

Portfolio Strategy And Activity

The Evolve Automobile Innovation Index Fund returned 9.26% during the month of May. For the month, XPeng made the largest contribution to the Fund, followed by Tesla and Li Auto. The largest detractors to performance for the month were Fisker, followed by Lucid and Chargepoint.

Sources:

Rosevear, J. (2023, June 27). Volvo just became the latest EV maker to move to Tesla’s charging standard. CNBC. https://www.cnbc.com/2023/06/27/volvo-adopts-teslas-ev-charging-standard.html
Jin, H., & Hunnicutt, T. (2023, June 27). Tesla charging technology put on fast track to become US standard. Reuters. https://www.reuters.com/business/autos-transportation/tesla-charging-technology-put-fast-track-become-us-industry-standard-2023-06-27/
Rathi, A., Natter, A., & Naughton, K. (2023, June 22). Ford gets $9.2 billion to help us catch up with China’s EV dominance. Bloomberg.com. https://www.bloomberg.com/graphics/2023-ford-ev-battery-plant-funding-biden-green-technology/
Cheng, E. (2023, June 16). Chinese tesla rival Xpeng gets approval to roll out driver-assist tech in Beijing. CNBC. https://www.cnbc.com/2023/06/14/chinese-ev-brand-xpeng-gets-approval-for-driver-assist-in-beijing.html
Mehta, C. (2023, June 30). Xpeng shares jump as China EV maker prices SUV below Tesla Model Y. Reuters. https://www.reuters.com/business/autos-transportation/chinese-ev-maker-xpengs-shares-jump-after-pricing-suv-below-tesla-model-y-lifts-2023-06-30/
Reinicke, C. (2023, June 9). EV charging stocks sink after General Motors says it will use Tesla’s charging network. Yahoo! Finance. https://finance.yahoo.com/news/ev-charging-stocks-sink-general-165617817.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Evolve NASDAQ Technology Index Fund to Begin Trading on July 12, 2023

Posted on July 10, 2023July 12, 2023 by Veronica Carlasuc

TORONTO, July 10, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve“) is pleased to announce that it has filed a final prospectus for the Evolve NASDAQ Technology Index Fund (“QQQT” or the “Fund“). QQQT is expected to begin trading on Wednesday, July 12, 2023, on the Toronto Stock Exchange (“TSX”), subject to TSX approval. QQQT is Canada’s first Nasdaq-100® technology-focused ETF designed to provide investors with market cap exposure to only the companies deemed “technology” within the Nasdaq-100 Index®.

“We are very pleased to be working with the Nasdaq to bring this first of its kind product to Canadian investors,” says Raj Lala, President and CEO at Evolve ETFs. “QQQT can be a great portfolio completion tool by providing investors with pure-play access to only the technology sector of the Nasdaq-100 Index®.”

QQQT seeks to replicate, to the extent reasonably possible and before fees and expenses, the performance of the Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index, or any successor thereto (the “Index”). The Index is designed to measure the performance of the technology companies in the Nasdaq-100 Index®, which measures the performance of 100 of the largest non-financial companies listed on Nasdaq. The Index consists of a selection of securities in the Nasdaq-100 Index® which must be classified as a “technology company” (i.e., any company classified under the “technology industry”) according to the Industry Classification Benchmark (ICB). No issuer weight may exceed 10% of the Index.

The Fund will be market-capitalization-weighted and rebalanced quarterly. The following chart sets out the ETF Units for each of the Fund:

	ETF Units
	Hedged ETF Units (CAD$)	Unhedged ETF Units (CAD$)	Unhedged ETF Units (USD$)
Evolve NASDAQ Technology Index Fund	QQQT	QQQT.B	QQQT.U

About Evolve Funds Group Inc.

Join us on social media: Twitter | LinkedIn | Facebook | Youtube

SOURCE Evolve ETFs

For further information: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT, Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Cybersecurity Poised to Thrive in the Decade Ahead

Posted on July 7, 2023July 21, 2023 by Veronica Carlasuc

So far in 2023, the cybersecurity sector has faced some challenges that have impacted investment and growth within the industry.

Challenges Confronting the Cybersecurity Sector

Market research reports indicate the first half of 2023 saw a decline in overall investment in the cybersecurity sector compared to the previous year. Funding rounds and venture capital investments showed a more cautious approach from investors, leading to a decrease in the total capital raised.

In the near term, industry observers expect to see investment rebound in the second half of 2023 and into 2024, with M&A activity picking up, as well.⁴

Growth Projected for Cybersecurity Over the Next Decade

The cybersecurity industry is poised for significant growth over the next decade, with the critical importance of robust cybersecurity driving demand for innovative solutions and services.

Diversified Investing in Cybersecurity with CYBR ETF

Sources

Vijayan, J., “Analysts: Cybersecurity Funding Set for Rebound,” Dark Reading, July 10, 2023; https://www.darkreading.com/operations/analysts-cybersecurity-funding-uptick-2h-2023
“New IDC Spending Guide Forecasts Worldwide Security Investments Will Grow 12.1% in 2023 to $219 Billion,” IDC, March 16, 2023; https://www.idc.com/getdoc.jsp?containerId=prUS50498423
“The impact of inflation on cybersecurity,” RFA, June 30, 2023; https://rfa.com/news-and-insights/thought-leadership/the-impact-of-inflation-on-cybersecurity/
Vijayan, J., “Analysts: Cybersecurity Funding Set for Rebound,” Dark Reading, July 10, 2023; https://www.darkreading.com/operations/analysts-cybersecurity-funding-uptick-2h-2023
“Global Cyber Security Market Size [2023-2030] to Reach USD 424.97 Billion and Exhibit a CAGR of 13.8%,” Fortune Business Insights, April 19, 2023; https://www.globenewswire.com/news-release/2023/04/19/2649842/0/en/Global-Cyber-Security-Market-Size-2023-2030-to-Reach-USD-424-97-Billion-and-Exhibit-a-CAGR-of-13-8.html
“Cyber Security Market Size Is Valued At US$ 534 Bn by 2032: Data Analysis by Experts at Market.Us,” GlobalNewswire, March 23, 2023; https://www.globenewswire.com/en/news-release/2023/03/23/2632956/0/en/Cyber-Security-Market-Size-Is-Valued-At-US-534-Bn-by-2032-Data-Analysis-by-Experts-at-Market-Us.html
Kovacs, E., “Industrial Cybersecurity Market Expected to Soar in Next Decade,” SecurityWeek, October 18, 2022; https://www.securityweek.com/industrial-cybersecurity-market-expected-soar-next-decade/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How Microsoft’s Merger with Activision Could Transform Gaming

Posted on July 4, 2023December 18, 2023 by Veronica Carlasuc

Microsoft’s $69 billion acquisition of video game maker Activision Blizzard received a major boost in July, with a U.S. federal judge allowing the merger to proceed.

The judge ruled that the Federal Trade Commission (FTC) failed to demonstrate that Microsoft’s ownership of Activision games would harm competition in the console or cloud-gaming markets and would, in fact, increase consumer access to Activision content, such as the immensely popular “Call of Duty” series. While the FTC had sought an injunction to halt the merger, the ruling allows the companies to proceed with the deal before the agency initiates a separate process to challenge it.¹

After a year and a half of wrangling, how did the Microsoft-Activision merger get to this point? And if it goes through, what are the implications for the gaming sector overall? The stakes are high, and industry stakeholders eagerly await the final resolution of this transformative merger.

Let’s take a deep dive into the case.

How we got here

The Microsoft-Activision merger has been an intricate 18-month-long global approval process, highlighting the challenges of regulatory clearance across multiple jurisdictions.

While the merger was announced in January 2022 and has received regulatory approval in the European Union, China, Japan, and 37 other countries representing a total market of two billion people,² it was only in the last several months that the deal hit roadblocks.

In April, the U.K.’s Competition and Markets Authority (CMA) blocked the proposed merger on antitrust grounds. The CMA claimed the deal would make Microsoft (which already holds a 60%-70% global market share in cloud gaming) too dominant in the space, leading to “reduced innovation and less choice for U.K. gamers over the years to come.”³

To ease regulators’ concerns, Microsoft pledged to ensure continued competition by allowing Activision Blizzard games such as “Call of Duty” and “Overwatch” to appear on rival cloud gaming platforms like the Nintendo Switch (with whom Microsoft struck a 10-year agreement for same-day release and “full feature and content parity” for games)⁴ and Sony PlayStation. Microsoft CEO Satya Nadella and Activision CEO Bobby Kotick have offered to extend the same deal to Sony and pledged as much in court in June, reaffirming their companies’ commitment to “open platforms and consumer choice.”⁵ Such assurances were what gained E.U. and Chinese approval of the deal.⁶

With all eyes on a decision in the U.S., in mid-June, the FTC received a court injunction to temporarily block the acquisition and a U.S. District Court in San Francisco agreed to hold a hearing just days later.

During the weeklong hearing, the court heard testimony From the FTC arguing that the acquisition would give Microsoft an anti-competitive advantage in the emerging cloud gaming space.⁷ It was this case that the judge ruled on, finding that Microsoft’s ownership of Activision would not, in fact, harm competition.

The regulator has agreed to pause litigation and evaluate new proposals from Microsoft to address their concerns around competition and access to games across platforms.⁸

Microsoft has mobile gaming in mind

Microsoft’s motivation to acquire Activision-Blizzard is centred mainly around the company’s desire to strengthen its mobile and cloud gaming positions.

Mobile gaming, which represents the largest revenue-generating segment in the gaming industry, is an area where Microsoft has lagged its competitors.

With Activision-Blizzard’s ownership of the highly successful mobile game franchise, “Candy Crush,” Microsoft sees an opportunity to gain a significant foothold in this rapidly growing market, bolster its limited presence in the mobile gaming sector, and expand its offerings beyond the Xbox.⁹

Additionally, the acquisition aligns with Microsoft’s goal of enhancing its Game Pass subscription service. The inclusion of Activision Blizzard’s game titles in the Game Pass library will provide subscribers with access to a broader range of content, strengthening the value of its subscription service and attracting a broader user base.¹⁰

The ability to stream games through its Game Pass subscription service offers Microsoft an opportunity to reach a wider audience and capitalize on the growing demand for cloud-based gaming experiences.

The merger’s implications for the future of the gaming sector

The merger between Microsoft and Activision-Blizzard carries significant implications for the gaming sector, potentially reshaping the broader gaming ecosystem. The sector will be watching the deal’s implications for competition, consumer choice, and innovation in the industry.

Despite Microsoft’s assurances that it supports consumer choice (and the deal they struck with Nintendo), critics continue to raise concerns that Microsoft’s control of Activision Blizzard’s library of games could give the company an unfair advantage. Should Microsoft limit access to blockbuster titles like “Call of Duty” on rival consoles and subscription services, it could give Microsoft outsized control over the emerging cloud-gaming market and choke off competition, they say.

Additionally, the size and scope of this deal—the largest ever in the gaming industry—raises important questions about potential future mega-deals in the sector as well as antitrust enforcement in the gaming industry around the world.¹¹

As for innovation, industry watchers will have their eye on the effects this deal may have on smaller developers who lack the backing of larger studios or publishers and how successful they are at developing and promoting innovative new titles and other small indie games.

Likewise, the potential dominance of services like Game Pass in the cloud gaming space will also be of interest to developers and indie designers who rely on customers buying individual games for their revenue rather than the Netflix-for-games model of a Game Pass subscription.¹²

Diversified Investing in Video Games: HERO ETF

Interested in a diversified approach to investing in video games? Canada’s first esports and gaming ETF, the Evolve E-Gaming Index ETF (HERO ETF), is an index-based exchange-traded fund that invests in the leading video game companies across the globe. To learn more about HERO ETF, please click here: https://evolveetfs.com/hero/.

Sources

Needleman, S. & Michaels, D., “Microsoft Can Close Its $75 Billion Buy of Activision Blizzard, Judge Rules,” July 11, 2023; https://www.wsj.com/articles/microsoft-activision-blizzard-deal-ftc-hearing-d42675f1
Fineman, J., “Microsoft’s planned $69B Activision purchase gets China antitrust approval – report,” Seeking Alpha, May 19, 2023; https://seekingalpha.com/news/3973465-microsofts-planned-69b-activision-purchase-gets-china-antitrust-approval-report
Ziady, H., “UK blocks Microsoft takeover of Activision Blizzard,” CNN Business, April 26, 2023; https://www.cnn.com/2023/04/26/tech/microsoft-activision-blizzard/index.html
Porter, J., “Microsoft Signs Binding Call of Duty Deal With Nintendo Ahead Of EU Activision Hearing,” The Verge, February 21, 2023; https://www.theverge.com/2023/2/21/23608256/microsoft-nintendo-call-of-duty-agreement-legal-eu-hearing
Browning, K., “Microsoft and Activision Chiefs Testify Merger Will Benefit Consumers,” The New York Times, June 28, 2023; https://www.nytimes.com/2023/06/28/business/microsoft-activision-ceo-testify.html
Porter, J., “Microsoft Signs Binding Call of Duty Deal With Nintendo Ahead Of EU Activision Hearing,” The Verge, February 21, 2023; https://www.theverge.com/2023/2/21/23608256/microsoft-nintendo-call-of-duty-agreement-legal-eu-hearing
Browning, K. & McCabe, D., “Microsoft Says It Could Abandon Activision Deal if Judge Delays It,” The New York Times, June 22, 2023; https://www.nytimes.com/2023/06/22/technology/microsoft-activision-federal-hearing.html
Nylen, L., Ludlow, E. & Bass, D., “Microsoft, Activision Eye UK Rights Sale to Get Merger Done,” Bloomberg, July 13, 2023; https://www.bloomberg.com/news/articles/2023-07-13/microsoft-activision-weigh-sale-of-some-uk-cloud-gaming-rights
Howley, D., “Microsoft’s gaming future depends on the US,” Yahoo News, May 24, 2023; https://ca.news.yahoo.com/microsofts-gaming-future-depends-on-the-us-153820460.html
Needleman, S. & Michaels, D., “Microsoft Can Close Its $75 Billion Buy of Activision Blizzard, Judge Rules,” July 11, 2023; https://www.wsj.com/articles/microsoft-activision-blizzard-deal-ftc-hearing-d42675f1
Ibid
Lucas Austin, P., “Microsoft Buying Activision Blizzard Might Be Good For Gamers, But Bad for Developers,” Time, January 19, 2022; https://time.com/6140197/what-microsoft-buying-activision-blizzard-means/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Undervalued U.S. Banking Sector Offers Opportunity for Investors

Posted on June 30, 2023December 18, 2023 by Veronica Carlasuc

In the Spring of 2023, the U.S. banking sector faced a period of uncertainty and volatility, triggering concerns about its stability. However, thanks to the swift and resolute actions taken by key institutions and some of the largest U.S. banks, coupled with recent positive developments among regional lenders, it is now increasingly clear that the banking turmoil has subsided.

The good news for investors is that while banking stocks may have been battered, the resilience shown by the U.S. banking sector suggests that the worst is behind us and that the time may be right to pick up some bargains in an undervalued sector.

U.S. banking sector demonstrates its resilience

Ironically, the actions taken by the banking industry itself in the face of the recent crisis show the sector’s resilience. Through coordinated action (in conjunction with the U.S. Treasury and the Federal Reserve) U.S. banks moved swiftly to shore up struggling banks and prevent a full-blown crisis like that of 2008.

By providing $100 billion in emergency funding to rescue First Republic Bank, major U.S. lenders, including JPMorgan Chase, Citigroup, Bank of America Corp, Wells Fargo, Goldman Sachs, and Morgan Stanley, showed that the situation in 2023 was significantly different from the crisis of 2008. In this latest crisis, U.S. banks showed themselves to be far better capitalized than during the Great Recession, with easier access to funds that allowed them to prevent a domino effect of regional bank collapses that could have rippled out into the larger financial industry.¹

Likewise, the quick sale of the deposits, assets, and liabilities of the defunct Silicon Valley Bank (SVB) through the Federal Deposit Insurance Corporation (FDIC) to First Citizens Bank further demonstrated the durability and resilience of the sector.

In their Q1 earnings report, First Citizens highlighted the acquisition of SVB as having added significant scale and strength to their existing business. For the year, First Citizens shares have added approximately 44.2% so far in 2023 versus the overall S&P 500’s gain of 7.3%.²

Is banking turmoil really behind us?

Despite the resilience shown by the sector to date, it’s a question worth asking: how do we know that the worst is over for U.S. banks? For reassurance, we can look not only to statements from the Federal Reserve and the U.S. Treasury but also to positive developments among regional lenders that suggest the instability from earlier this year has abated.

In May, Federal Reserve Chairman Jerome Powell emphasized the soundness and resilience of the U.S. financial system, providing a much-needed vote of confidence. He acknowledged that the initial stress in March centred around SVB, Signature Bank, and First Republic but indicated that each bank had successfully resolved their issues while safeguarding their depositors’ interests.³

This assurance from Powell was echoed by other experts such U.S. Treasury Secretary Janet Yellen, who credited the “decisive and forceful” actions taken by large U.S. lenders to shore up smaller regional banks for demonstrating that the U.S. banking sector is on a stable footing.⁴

In addition, we can look to recent positive developments among these regional lenders for additional evidence that the worst is behind us.

Early in May, initial fears of a renewed crisis emerged when PacWest Bank, a regional bank based in Los Angeles, began exploring strategic options due to shareholder flight and reported losses. The announcement led to a sharp decline in stocks of other regional lenders, intensifying fears of contagion among small to mid-sized banks. However, the situation quickly turned around when PacWest Bancorp proactively sought to boost its liquidity by selling real estate construction loans worth $2.6 billion.⁵ Additionally, PacWest announced in June that to further boost liquidity, it was selling a $3.54 billion lender finance loan portfolio to Ares Management, as asset management firm.⁶

Likewise, Western Alliance Bank, a regional lender based in Phoenix, announced substantial deposit growth of over $2 billion, indicating a significant turnaround for the company and easing investor concerns after rumours of a potential sale.⁷ These developments, together with other positive indicators, helped restore confidence in the regional banking sector, signalling a turning point in the U.S. banking crisis.

What happens to U.S. banks if we enter a recession?

By late March, the Fed was so confident that the U.S. banking system was “sound and resilient” that, despite any remaining uncertainty, it felt able to proceed with another in its series of recent rate hikes.⁸

The risk posed by rate hikes, of course, is that any increase could put undue stress on the banking system, tightening credit and tipping the economy over into full-on recession—one long expected for later in 2023.⁹

So, what happens to U.S. banks if a recession arrives?

The good news is that post 2008, changes to financial sector regulations mean that (as mentioned earlier) banks must now hold much more capital—four times as much as before the Great Recession. Banks must also have greater liquidity and rely less on shorter-term funding so that in the event of a true crisis, the Fed and the Treasury will have enough time to organize relief in a severe liquidity crisis.¹⁰ So it is unlikely we would see widespread turmoil in the sector.

However, should the worst happen, and banks did begin to collapse, as we saw with the events this past Spring, deposits kept in a bank account (during a recession or not) are protected through the Federal Deposit Insurance Corporation (FDIC). Up to $250,000 is protected in individual bank accounts and $500,000 insured in joint accounts.¹¹

Is now a buying opportunity for U.S. bank stocks?

The good news for potential investors is that bank stocks have been going strong so far in 2023. In fact, U.S. banks have outperformed the S&P 500 for over a year, thanks especially to rising rates. In such an environment, high interest rates increase the profits banks make on their loans.¹²

Moreover, the crisis earlier this year triggered a sector-wide sell-off despite some banks (particularly large ones) being fundamentally sound. That means that some bank stocks may be undervalued relative to the underlying strength and liquidity of their institutions overall, making for an excellent opportunity to pick up bargains.¹³

Investing in U.S. banks for enhanced yield: CALL ETF

Are you looking for better yields from U.S. banks while mitigating risk through a covered call strategy??

Evolve’s U.S. banks ETF, the Evolve US Banks Enhanced Yield Fund (CALL ETF), offers investors a way to benefit from the positive fundamentals of the largest U.S. banks, with the added value of a covered call strategy applied on up to 33% of the portfolio. Covered call options have the potential to provide extra income and help hedge long stock positions. The CALL is yours.

For more information on CALL ETF, visit our website at https://evolveetfs.com/call/.

Sources

Schroeder, P., Prentice., C., & Anand, N., “Major US banks inject $30 billion to rescue First Republic Bank,” Reuters, March 16, 2023; https://www.reuters.com/business/finance/credit-suisse-borrow-up-54-bln-it-seeks-calm-investor-fears-2023-03-16/
“First Citizens BancShares (FCNCA) Misses Q1 Earnings Estimates,” Yahoo Life, May 10, 2023; https://ca.style.yahoo.com/first-citizens-bancshares-fcnca-misses-114511530.html

Evers-Hillstrom, K., “Fed chief says banking system is ‘sound and resilient’ after failures,” The Hill, May 3, 2023; https://thehill.com/business/banking-financial-institutions/3986213-fed-chief-says-banking-system-is-sound-and-resilient-after-failures/
Schroeder, P., Prentice., C., & Anand, N., “Major US banks inject $30 billion to rescue First Republic Bank,” Reuters, March 16, 2023; https://www.reuters.com/business/finance/credit-suisse-borrow-up-54-bln-it-seeks-calm-investor-fears-2023-03-16/
Singh, M. & Chibuike, O., “PacWest stock plunges as US regional banking woes worsen,” Reuters, May 4, 2023; https://www.reuters.com/markets/us/pacwest-western-alliance-hit-us-banking-concerns-widen-2023-05-04/
“PacWest sells $3.5 bln loan portfolio to asset management firm Ares,” Reuters, June 26, 2023; https://www.reuters.com/markets/deals/ares-acquires-35-bln-loan-portfolio-pacwest-2023-06-26/
Nishant, N. & Chibuike, O., “US regional bank shares rally after Western Alliance reports deposit growth,” Financial Post, May 17, 2023; https://financialpost.com/pmn/business-pmn/us-regional-bank-shares-rally-after-western-alliance-reports-deposits-growth
Siegel, R., “Federal Reserve raises benchmark rate by 0.25 point despite bank turmoil,” The Washington Post, March 22, 2023; https://www.washingtonpost.com/business/2023/03/22/fed-rate-hike-svb/
Shah, J., “Behind the Banking Crisis, an Era of Easy Money’s End: QuickTake,” The Washington Post, March 19, 2023; https://www.washingtonpost.com/business/2023/03/19/the-era-of-easy-money-is-over-what-does-that-change-quicktake/
Elliott, D., “Banks and the Next Recession,” Oliver Wyman, 2019; https://www.oliverwyman.com/content/dam/oliver-wyman/v2/publications/2019/may/Banks%20and%20the%20Next%20Recession.pdf
Acevedo, S., “How to know if you should keep your money in a bank if you’re worried about a recession,” Business Insider, March 10, 2023; https://www.businessinsider.com/personal-finance/is-money-safe-in-bank-during-recession
Schmidt, D., “Are Bank Stocks a Good Buy Right Now?,” MarketBeat, May 17, 2023; https://www.marketbeat.com/originals/are-bank-stocks-a-good-buy-right-now/
Berkowitz, B., “3 Top Bank Stocks to Buy in June,” The Motley Fool, June 3, 2023; https://www.fool.com/investing/2023/06/03/top-bank-stocks-to-buy-in-june/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

AI-Driven Innovation and Strategic Investments are Reshaping Disruptive Industries

Posted on June 27, 2023December 18, 2023 by Veronica Carlasuc

Innovation is the driving force behind transformative, disruptive change across a variety of industries. In May, whether it was Chinese EV manufacturers, AI-driven cybersecurity, cloud computing infrastructure in India, or innovations in genomics thanks to AI-powered insights, strategic investment played a significant role in the eight sectors covered by the Evolve Innovation Index Fund (EDGE ETF).

Sector Specific Updates

Automobile Innovation

Chinese electric car manufacturers like BYD Auto, NIO, Zeekr, and Ora are emerging as formidable competitors to Western and Japanese EV brands, even in their domestic markets. With their rapidly advancing technology and affordable pricing (sometimes 25% less than a Tesla), even Tesla’s CFO describes their success as “scary.”

Each Chinese EV manufacturer takes a different tack to win business, with some focused on competitive pricing, while others prioritize performance and advanced features to attract customers, thereby increasing the pressure on premium Western and Japanese EV manufacturers.

For example, NIO Inc’s latest luxury SUV model, the ES6, is slated for a European launch later this year. The vehicle boasts voice-activated controls and an impressive 610 kilometres range per charge. Consequently, it aims to carve a European niche for itself in the premium SUV segment.

The robust growth in sales of electric vehicles and hybrids in China is undeniable, almost doubling last year to reach 6.9 million units—fully half of the global total. This growth has been facilitated by billions of dollars in subsidies from the Chinese government, whose goal is to position China as a pioneer in EVs and clean energy more broadly. So, it was only a matter of time before these EV manufacturers looked beyond their own shores.¹

Cybersecurity

Hackers are using generative AI and ChatGPT to fine-tune ransomware and social engineering email-based attacks, leading to an increasing number of breaches. AI-enhanced threat actors are also exploiting unsecured gaps between endpoints and identity protection, showing that CISOs and other enterprise security experts are underprepared for cybersecurity in the age of artificial intelligence. These are among the conclusions of a new report from Forrester on the top cybersecurity threats in 2023. The report suggests that augmented by AI, threat actors will be able to attack any sector and any business with a speed, scale, and complexity of attack not previously possible.²

One such example comes from security firm Zscaler, who recently averted a social engineering attack from hackers using a synthesized soundalike of CEO Jay Chaudhry. The hackers used recordings of Chaudhry’s voice from talks available on the internet to build the audio doppelgänger using AI. This soundalike tried via phone to get a Zscaler sales director in India to transfer funds to a bank in Singapore. Zscaler cited the availability of AI as part of the 47% rise the company has seen in phishing attacks over the last year.³

Cloud Computing

Amazon Web Services (AWS) revealed ambitious plans in May to invest $12.7 billion USD in the Indian cloud infrastructure market by 2030. The announcement, made during the AWS Summit in Mumbai, reflects AWS’s commitment to meeting the escalating demand for cloud-based services from Indian customers.

This substantial investment will focus on bolstering India’s data centre infrastructure, paving the way for over 130,000 full-time equivalent jobs in various sectors each year, including construction, engineering, and telecommunications.

This recent announcement builds upon AWS’s previous investments in India, which total more than $3.7 billion between 2016 and 2022 and includes training more than four million people in cloud skills. Additionally, a 2021 study commissioned by Amazon found that companies in the Asia-Pacific could reduce their carbon footprint more than 78% by transitioning from on-premises data centres to the cloud, so the AWS move will also contribute to renewable energy projects in India.⁴

Cybersecurity — Source: Bnnbloomberg.ca/Katherine Gemmell

E-Gaming

After a rocky month in April, in which Microsoft saw the U.K.’s competition authority block its proposed $69 billion acquisition of gaming company Activision Blizzard, the tech giant received some good news from European and Chinese regulators in May.

The European Commission announced that Microsoft’s proposed remedies for the emerging field of cloud gaming—namely, that users would have the ability to stream Activision games on non-Microsoft cloud streaming platforms after purchase—had allayed their antitrust concerns and that the deal could proceed.⁵

Likewise, China’s State Administration also gave the Microsoft-Activision Blizzard deal the go-ahead in May, bringing the total number of national regulators supporting the deal to 37, including those in the EU and Japan. Collectively, these regulators represent a staggering two billion people.⁶

The remaining holdout, then, is the U.K.’s Competition and Markets Authority. Microsoft has announced its intention to challenge the U.K.’s decision through appeal.

The deal is still awaiting approval in the United States, with the Federal Trade Commission (FTC) set to decide in August. A clear consensus has yet to emerge amongst legal experts about how the FTC might rule.⁷

Genomics

The power of AI-driven innovation continues to show itself in the healthcare and pharmaceutical space. In May, researchers at McMaster University announced they had used AI to discover a potent new antibiotic, called abaucin, that can kill a deadly superbug known as Acinetobacter baumannii.

The researchers trained an AI to recognize the chemical structure of thousands of known pharmaceuticals and how they interacted with A. baumannii. They then provided the AI with a list of 6,680 compounds whose effectiveness against the bacterium was unknown. The AI worked up a shortlist of 240 promising potential drugs from those thousands of compounds in just an hour and a half. Studying the candidates on that shortlist, scientists found nine likely antibiotics, including abaucin.

The use of AI in scientific research holds the promise of accelerating the discovery of new therapies and saving lives. While abaucin requires further testing, the researchers say they expect the first AI-derived antibiotics to be prescribed by 2030.⁸

Fintech

Shopify announced a realignment of some elements of its business in May, as the e-commerce platform looks to refocus on its core mission of helping online merchants.

Shopify will sell the majority of its logistics business (including staff, technology, and services) to tech-driven global logistics firm Flexport. This logistics business (which Shopify built as a “port to porch” solution) will maintain the seamless integration into Shopify’s online tools that merchants rely on for speed, flexibility, and affordability in order fulfillment.

As part of the deal, Shopify will receive 13% equity interest in Flexport (all stock), as well as the right to name a director to Flexport’s board.

The news of the logistics sale came as part of Shopify’s Q1 financial reporting. For the quarter, Spotify’s total revenue was $1.5 billion, up 25% year-over-year, with Merchant Solutions revenue (up 31% to $1.1 billion YoY), Subscription Solutions revenue (up 11% to $382 million YoY), and Monthly Recurring Revenue (up 10% to $116 million YoY) all seeing increases.⁹

Robotics & Automation

FANUC America (held by the Fund) introduced two new high-payload capacity collaborative robots—called ‘cobots’—in May. These new cobots significantly increase the payload capacities of FANUC’s CRX and CR cobots. The CRX cobot will up its capacity from 4kg to 30kg, while the CR cobot line will increase its capacity to 50kg. These upgraded models greatly expand the kind and variety of tasks the cobots can accomplish.

The CRX and CR cobots join nine other cobot models produced by FANUC that accomplish a variety of industrial roles, including assembly, picking, packaging, palletizing, and welding, amongst others.

FANUC has seen substantial growth in sales of its cobot line. The cobot’s task flexibility and small footprint on a factory or warehouse floor have made the line particularly attractive to companies new to automation but who need robotic assistance to boost productivity and alleviate labour shortages.¹⁰

5G

Apple Inc signed a new multibillion-dollar deal for Broadcom Inc to supply 5G radio frequency components for Apple devices. The deal includes parts for wireless connectivity that help focus signals and reduce interference for mobile devices. These parts will be designed and built at Broadcom facilities in the United States.

The deal is part of Apple’s 2021 promise to spend $430 billion into the U.S. economy within five years. It is also part of Apple’s strategy to re-shore and diversify elements of its supply chain so as to avoid future shortages from overseas like those experienced during the pandemic. Overall, Apple is spending billions to build out and develop 5G technology to help it dominate the future of the consumer electronics space.¹¹

Investing in Innovation with EDGE ETF

Portfolio Strategy and Activity

For the month, Evolve Cyber Security Index Fund (CYBR ETF) made the largest contribution to the Fund, followed by Evolve Cloud Computing Index Fund (DATA ETF), and Evolve Automobile Innovation Index Fund (CARS). The largest detractors to performance for the month were PayPal Holdings Inc, followed by Agilent Technologies Inc and Global Payments Inc.

For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/ or click here. Give your portfolio an EDGE.

Sources:

McDonald, J., & Kageyama, Y., “Chinese electric vehicle brands expand to global markets,” ABC News, May 1, 2023; https://abcnews.go.com/Business/wireStory/chinese-electric-vehicle-brands-expand-global-markets-99002556
Columbus, L., “Forrester predicts 2023’s top cybersecurity threats: From generative AI to geopolitical tensions,” VentureBeat, May 22, 2023; https://venturebeat.com/security/forrester-predicts-2023-top-cybersecurity-threats-generative-ai-geopolitical-tensions/
Menn, J., “Cybersecurity faces a challenge from artificial intelligence’s rise,” The Washington Post, May 11, 2023; https://www.washingtonpost.com/technology/2023/05/11/hacking-ai-cybersecurity-future/
Bourne, J., “AWS to put $13 billion into India cloud infrastructure by 2030,” Cloud Tech, May 22, 2023; https://www.cloudcomputing-news.net/news/2023/may/22/aws-to-put-13-billion-into-india-cloud-infrastructure-by-2030/
Kharpal, A., “EU approves Microsoft’s $69 billion acquisition of Activision Blizzard, clearing huge hurdle,” CNBC, May 15, 2023; https://www.cnbc.com/2023/05/15/microsoft-activision-deal-eu-approves-takeover-of-call-of-duty-maker.html
Fineman, J., “Microsoft’s planned $69B Activision purchase gets China antitrust approval – report,” Seeking Alpha, May 19, 2023; https://seekingalpha.com/news/3973465-microsofts-planned-69b-activision-purchase-gets-china-antitrust-approval-report
Valentine, R., “China Approves Microsoft’s Acquisition of Activision Blizzard,” IGN, May 22, 2023; ign.com/articles/china-approves-microsofts-acquisition-of-activision-blizzard
Gallagher, J., “New superbug-killing antibiotic discovered using AI,” BBC News, May 25, 2023; https://www.bbc.com/news/health-65709834
“Shopify Announces First-Quarter 2023 Financial Results; Agrees to Sell Shopify Logistics to Flexport,” Shopify, May 4, 2023; https://news.shopify.com/shopify-announces-first-quarter-2023-financial-results-agrees-to-sell-shopify-logistics-to-flexport
“FANUC America Introduces High-Payload Cobots and Demonstrates Industry-Leading Automation Solutions at Automate,” FANUC America, May 18, 2023; https://www.fanucamerica.com/news-resources/fanuc-america-press-releases/2023/05/18/fanuc-america-introduces-high-payload-cobots-and-demonstrates-industry-leading-automation-solutions-at-automate
Gurman, M. & King, I,. “Apple Extends Broadcom Pact With Multibillion-Dollar 5G Deal,” Bloomberg, May 23, 2023; https://www.bloomberg.com/news/articles/2023-05-23/apple-signs-multibillion-dollar-deal-with-broadcom-for-5g-parts

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How Cash Alternative ETFs Can Offer Stability and Growth in Uncertain Times

Posted on June 23, 2023June 23, 2023 by Veronica Carlasuc

In a time of rising interest rates and increasing volatility in equity markets, investors are seeking alternative strategies for their cash.

Cash alternative ETFs, money market and cash equivalent funds have emerged as increasingly popular investment options, offering a means to protect capital while including the potential for attractive returns.

As ongoing rate hikes continue, navigating the cash landscape can be more manageable with money market and cash alternative ETFs.

Rate hikes make cash alternative ETFs attractive

Over the past year, the combination of stubbornly high inflation and central banks that keep ratcheting up interest rates has reminded many investors that “cash is king.” Suddenly, cash is an appealing option and has the potential to generate significant earnings.

High-interest ETFs and other money market or cash equivalent funds, for example, offer the opportunity to profit from the return rates of the underlying accounts, which have been rising in conjunction with interest rates. As a result, these investments have witnessed a surge in popularity among individuals seeking innovative places to park their cash.¹

With interest rates looking to stabilize or moderately climb in the near-term, volatility in equity markets, and the possibility of a recession still in the mix, cash alternative ETFs and other money market or cash equivalent funds offer a compelling solution for individuals seeking stability and potential growth despite an uncertain financial outlook.² It’s little wonder then that these kinds of instruments have seen such robust growth in recent months.

Growing demand for money market and cash alternative ETFs in and the U.S.

According to National Bank of Canada, Canadian ETFs have had inflows of $15 billion so far this year, with fixed income (including money market and cash alternative ETFs) making up the largest share of that growth at $9.2 billion.³

In May alone, money market ETFs drew nearly $1 billion of the total $2.6 billion in ETF flows in Canada.⁴ Of that, $298 million came from cash alternatives like high-interest savings ETFs, meaning that these ETFs dominated the fixed income category for the month.⁵

“The craze for money market or ‘cash-like’ exposure seems unstoppable, especially now that these ETFs are yielding close to 5%,” said the National Bank of Canada report.⁶

Investors in the United States could also benefit from cash alternative ETFs, such as high-interest savings ETFs. Given the turmoil in the U.S. banking sector earlier this year, which showed the risk of a bank run, the stability offered by HISA ETFs makes them great alternatives to traditional savings accounts when you have cash to park while considering next steps or riding out uncertainty.⁷

This growing demand is no doubt thanks in large part to the advantages that money market and cash alternative ETFs present in a period of market uncertainty, such as we are experiencing now.

The appeal of money market and cash alternative ETFs

Money market and cash alternative ETFs offer some substantial advantages in our current market environment. These include:

Capital preservation: With the lower risk associated with holding cash and cash equivalents, these investment options offer a way to help preserve capital and the investment principal.
Attractive yields: Cash alternative ETFs and money market funds provide competitive yields, making them appealing choices for investors looking to maximize returns in a rising interest rate environment.
Monthly income: These funds offer the potential for monthly income, making them particularly attractive to income-oriented investors who rely on regular cash flows.
Flexibility and convenience: These investments allow for access to funds whenever needed, providing the ability to manage assets according to changing goals and circumstances.
Daily liquidity with no lock-up periods: Investors appreciate that, unlike certain other investments, cash alternative ETFs provide the freedom to enter or exit positions on a daily basis.

Navigating your cash with money market and cash alternative ETFs

Our current climate of ongoing rate hikes has made money market and cash alternative ETFs appealing options for individuals looking to secure capital, generate attractive returns, and manage their investments conveniently.

Evolve’s High Interest Savings Account (HISA ETF) and US High Interest Savings Account (HISU.U ETF) invest in high-interest deposit accounts with Canada’s “Big Six” Banks, while Evolve’s two new money market funds, Premium Cash Management Fund (MCAD ETF) US Premium Cash Management Fund (MUSD.U ETF) invest in Canadian and U.S. dollar-denominated money market instruments, respectively.

To learn more about our cash solutions suite, click here for our Cash Solutions brochure. Understand your options for navigating your cash.

Sources

Dondo, J., “Cash alternative ETFs becoming increasingly popular,” Wealth Professional, June 7, 2023; https://www.wealthprofessional.ca/investments/etfs/cash-alternative-etfs-becoming-increasingly-popular/367240
Zadikian, M., “Try high-interest ETFs as a cash alternative: CIBC,” BNN Bloomberg, June 2, 2023; https://www.bnnbloomberg.ca/try-high-interest-etfs-as-a-cash-alternative-cibc-1.1773866
“May 2023: Japan, Emerging Market, and the Evergreen Money Market ETFs,” National Bank of Canada, June 2, 2023; https://cetfa.ca/wp-content/uploads/2023/06/May-2023-Canada-Flows.pdf
Burgess, M., “Cash ETFs lead monthly gains again, drawing $4.8 billion this year,” Advisor’s Edge, June 2, 2023; https://www.advisor.ca/news/etfs/cash-etfs-lead-monthly-gains-again-drawing-4-8-billion-this-year/
Dondo, J., “Cash alternative ETFs becoming increasingly popular,” Wealth Professional, June 7, 2023; https://www.wealthprofessional.ca/investments/etfs/cash-alternative-etfs-becoming-increasingly-popular/367240
Burgess, M., “Cash ETFs lead monthly gains again, drawing $4.8 billion this year,” Advisor’s Edge, June 2, 2023; https://www.advisor.ca/news/etfs/cash-etfs-lead-monthly-gains-again-drawing-4-8-billion-this-year/
Carrick, R., “High interest savings ETFs now pay 5 per cent, but that’s over if regulators step in,” The Globe and Mail, June 19, 2023; https://www.theglobeandmail.com/investing/investment-ideas/article-high-interest-savings-etfs-now-pay-5-per-cent-but-thats-over-if/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Evolve Announces June 2023 Distributions for Certain Evolve Funds

Posted on June 22, 2023June 23, 2023 by Veronica Carlasuc

TORONTO, June 22, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve”) is pleased to announce the distribution amounts per unit (the “Distributions”) for certain funds (the “Evolve Funds”), for the period ending June 30, 2023, as indicated in the table below.

The ex-dividend date for the Distributions is anticipated to be June 29, 2023, for all Evolve Funds including the High Interest Savings Account Fund (“HISA”), US High Interest Savings Account Fund (“HISU.U”), Premium Cash Management Fund (“MCAD”) and US Premium Cash Management Fund (“MUSD.U”). Unitholders of HISA, HISU.U, MCAD and MUSD.U with record on June 29, 2023 and unitholders of all other Evolve Funds with record on June 30, 2023 will receive cash distributions payable on or about July 10, 2023.

Evolve Funds	Ticker Symbol	Distribution per Unit	Frequency
Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund	BANK	$0.09300	Monthly
Evolve Global Materials & Mining Enhanced Yield Index ETF	BASE BASE.B	$0.20000 $0.20000	Monthly Monthly
Evolve Slate Global Real Estate Enhanced Yield Fund	BILT	$0.15000	Monthly
Evolve US Banks Enhanced Yield Fund	CALL CALL.B CALL.U	$0.12500 $0.12500 USD $0.12500	Monthly Monthly Monthly
Evolve Automobile Innovation Index Fund	CARS CARS.B CARS.U	$0.02000 $0.02000 USD $0.02000	Monthly Monthly Monthly
Evolve Cyber Security Index Fund	CYBR CYBR.B CYBR.U	$0.01000 $0.01000 USD $0.01000	Monthly Monthly Monthly
Evolve Cloud Computing Index Fund	DATA DATA.B	$0.01000 $0.01000	Monthly Monthly
Evolve Active Canadian Preferred Share Fund	DIVS	$0.07000	Monthly
Evolve Active Global Fixed Income Fund	EARN	$0.12500	Monthly
Evolve European Banks Enhanced Yield ETF	EBNK EBNK.B EBNK.U	$0.06000 $0.06000 USD $0.06000	Monthly Monthly Monthly
Evolve Innovation Index Fund	EDGE EDGE.U	$0.00500 USD $0.00500	Quarterly Quarterly
Evolve S&P 500® Enhanced Yield Fund	ESPX ESPX.B	$0.15500 $0.15500	Monthly Monthly
Evolve S&P/TSX 60 Enhanced Yield Fund	ETSX	$0.16000	Monthly
Evolve Active Core Fixed Income Fund	FIXD	$0.05500	Monthly
Evolve E-Gaming Index ETF	HERO	$0.05000	Quarterly
High Interest Savings Account Fund	HISA	$0.19854	Monthly
US High Interest Savings Account Fund	HISU.U	USD $0.41916	Monthly
Evolve Future Leadership Fund	LEAD LEAD.B LEAD.U	$0.10500 $0.10500 USD $0.10500	Monthly Monthly Monthly
Evolve Global Healthcare Enhanced Yield Fund	LIFE LIFE.B LIFE.U	$0.16000 $0.16000 USD $0.16000	Monthly Monthly Monthly
Premium Cash Management Fund	MCAD	$0.44975	Monthly
US Premium Cash Management Fund	MUSD.U	USD $0.48455	Monthly
Evolve FANGMA Index ETF	TECH TECH.B TECH.U	$0.00160 $0.00160 USD $0.00160	Monthly Monthly Monthly

Distributions for the funds will vary from period to period. For further information regarding the Distributions, please visit www.evolveetfs.com

About Evolve Funds Group Inc.

With over $6.2 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) index-based income strategies; (ii) long term investment themes; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook | Youtube

SOURCE Evolve ETFs

For further information: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT, Keith Crone, kcrone@evolveetfs.com, 416.966.8716

AI-Powered Growth in the NASDAQ Amidst Fed Hikes: What Investors Should Know

Posted on June 21, 2023December 18, 2023 by Veronica Carlasuc

The Federal Reserve’s recent decision to pause rate hikes has sparked discussions about the impact of more than a year’s worth of hikes on the market. While the initial outlook from this pause seemed positive, the potential for additional rate hikes soon is of particular concern for the stock market, especially technology stocks.

Understanding the interplay between the Federal Reserve’s rate decisions and their impact on the broader market is crucial for assessing the prospects of a continued bull run in the S&P 500® and tech-heavy NASDAQ®. Additionally, the ongoing AI boom has significantly influenced the tech industry, with AI technologies revolutionizing various sectors and attracting substantial investor interest.

Let’s examine the consequences of the Fed’s rate pause, its implications for the market, and the transformative power of AI in driving the tech industry’s growth.

Assessing the Impact of the Fed’s Rate Pause on the Market

In June, the Federal Reserve broke a string of 10 consecutive rate hikes, standing pat on its benchmark rate within a range of 5% to 5.25%. Fed Chairman Jerome Powell struck an optimistic tone, saying that progress was happening in the fight against inflation, but emphasized that a rate cut was unlikely until inflation significantly subsides, which could be “a couple of years out” in his estimation.¹

However, despite a sunny outlook, there are clouds on the horizon. The Fed’s “dot plot,” used to forecast rate policy, indicates two more rate hikes ahead, including one as early as July.²

The markets initially reacted negatively to the prospect of further rate hikes, taking losses after the announcement before closing with mixed results for the day. That’s because such rate hikes could pose challenges for the stock market, and particularly tech stocks. Tech companies rely heavily on low borrowing costs to finance R&D, acquisitions, and innovation. A persistently high-rate environment risks further tightening access to credit and impeding future growth.

Moreover, if history is any guide, the Fed tends to wait a considerable length of time—as long as seven months in the previous three rate hiking cycles—between rate hikes and any potential rate reductions.³ Consequently, the rate pause and possible future rate hikes play a significant role in the prospects for a continued a bull run in the S&P 500® and tech-heavy exchanges like the NASDAQ®, which have seen increased earnings thanks to the ongoing AI-driven boom in the sector.

How the AI gold rush is transforming the tech industry

Since the debut of ChatGPT in late 2022, AI has been a transformative force, revolutionizing industries and reshaping business models. From machine learning algorithms to autonomous systems, AI technologies have demonstrated their potential to enhance efficiency, productivity, and profitability.

Tech companies leveraging AI capabilities have attracted substantial investor interest, leading to soaring stock prices and market capitalizations. Since ChatGPT’s release, Microsoft and Google (which had previously approached AI research with caution) have jumped into the gold rush, integrating AI functionality into core products such as Microsoft Word and Google Search. Google CEO Sundar Pichai even mentioned “AI” 34 times in a recent earnings call, up from just five times last year.⁴

Facebook, Amazon, and Apple have also been keen to showcase their AI advancements and commitment to the technology in recent months. But perhaps the biggest winner of the AI gold rush so far is chip manufacturer Nvidia. The company’s processors, initially meant for video games, have been instrumental in training AI algorithms, and Nvidia now offers specialized products and software for AI. Nvidia announced that it expected to sell $11 billion worth of chips in Q2, beating analyst predictions by $4 billion.⁵ This surprise sent their stock surging 24% to a market valuation of $1 trillion. Nvidia’s stock is up 182% so far this year due to demand for its AI tools.⁶

Moreover, according to a Goldman Sachs senior strategist, AI-based gains in productivity could boost S&P 500® profits by 30% or more over the next 10 years.⁷ Given AI’s potential for productivity and profitability, it’s little wonder that the S&P 500® & NASDAQ® have both recently entered bull markets.

How the Fed and AI have spurred a bull run

The S&P 500® officially entered a bull market (defined as a rise of 20%+ from its most recent low) in early June, while the NASDAQ® entered bull territory in May.⁸

While the markets have reacted negatively to the Fed’s aggressive rate hikes since March 2022, the Fed has acted so aggressively because of a surprisingly resilient economy that keeps adding jobs. The market had been bracing for a recession that has so far refused to happen. The latest rate pause (while potentially brief) was certainly welcome on Wall Street.

This stubbornly hot economy has combined with record profits from Big Tech, driven by the AI boom happening since late last year. Tech giants have all outpaced the S&P 500® and the full NASDAQ®, with Alphabet (+25%), Apple (+30%), and Microsoft (+44%) delivering some of the most significant returns.⁹

And for a tech-heavy exchange like the NASDAQ®, the boom in tech earnings has been a huge win.

Big Tech and the nature of the NASDAQ®

While the S&P 500® represents a broader swath of the overall economy, the NASDAQ® composite reflects results just from stocks traded on the NASDAQ® market.¹⁰ And while tech-heavy, it will surprise many to learn that the NASDAQ® isn’t just about Big Tech.

More than 3,300 companies are publicly traded on the NASDAQ® exchange, making it the second-largest stock exchange by value and the largest electronic stock market overall. Stocks on the NASDAQ® cover a range of sectors, including energy, finance, healthcare, public utilities, technology, and transportation.¹¹ This diversification helps mitigate the risks associated with a concentrated portfolio while providing exposure to a wide range of industries.

The NASDAQ® Composite and the NASDAQ-100® are the best-known indexes within the NASDAQ®.

The NASDAQ® Composite (often what people mean when they refer to “the NASDAQ”) is a broad index encompassing thousands of companies listed on the exchange. It includes technology companies as well as companies in healthcare, finance, consumer goods, and more. This broad representation makes the NASDAQ® Composite a comprehensive barometer of the overall market.¹²

The NASDAQ-100®, on the other hand, is a subset of the Composite and is focused more closely on the tech sector. It consists of 100 of the largest non-financial companies listed on the NASDAQ®, with heavy representation (~56%) from tech giants, including Alphabet, Amazon, Apple, Nvidia, and Microsoft, amongst others. The NASDAQ-100® serves as a popular benchmark for technology-focused investors.¹³

Sources

Mercado, D., “Fed recap: Breaking down the market’s reaction to the Fed’s pause and all of Powell’s key comments,” CNBC, June 14, 2023; https://www.cnbc.com/2023/06/14/live-updates-fed-decision-june-2023.html
Matthews, S., “Fed to Pause and Keep Option to Raise Rates in July,” Bloomberg, June 14, 2023; https://www.bloomberg.com/news/articles/2023-06-13/fed-to-pause-and-keep-option-to-hike-in-july-decision-day-guide
Mercado, D., “Fed recap: Breaking down the market’s reaction to the Fed’s pause and all of Powell’s key comments,” CNBC, June 14, 2023; https://www.cnbc.com/2023/06/14/live-updates-fed-decision-june-2023.html
De Vynck, G., “The tech industry was deflating. Then came ChatGPT.” The Washington Post, June 4, 2023; https://www.washingtonpost.com/technology/2023/06/04/ai-bubble-tech-industry-outlook/
Ibid
Mozée, C., “Nvidia achieves $1 trillion market cap for the first time as AI-fueled stock surge continues,” Markets Insider, May 30, 2023; https://markets.businessinsider.com/news/stocks/nvidia-stock-price-ai-artificial-intelligence-trillion-valuation-chipmaker-gpus-2023-5
Daniel, W., “The A.I. boom will boost corporate profits 30% or more over the next decade, according to a Goldman Sachs senior strategist,” Yahoo Finance, May 18, 2023; https://finance.yahoo.com/news/boom-boost-corporate-profits-30-161954268.html
“The S&P 500 is in a bull market. Here’s what that means and how long the bull might run,” Associated Press, June 8, 2023; https://apnews.com/article/bull-stock-market-wall-street-cde5d042da6aa887e7d5ba64b62815ff
Ibid
Krantz, M., “Dow, S&P 500, Nasdaq: What’s the difference?,” ABC News, December 1, 2011; https://abcnews.go.com/Business/dow-sampp-500-nasdaq-difference/story
Treece, D., “What is NASDAQ?,” Business News Daily, February 21, 2023; https://www.businessnewsdaily.com/3403-nasdaq.html
Bajpai, P., “What is the Nasdaq Composite, and What Companies are in It?,” Nasdaq.com, May 21, 2021; https://www.nasdaq.com/articles/what-is-the-nasdaq-composite-and-what-companies-are-in-it-2021-05-12
Chen, J., “Nasdaq 100 Index: What It Is, How It’s Weighted and Traded,” Investopedia, December 31, 2021; https://www.investopedia.com/terms/n/nasdaq100.asp

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

AI-Powered Threat Actors Pose Unprecedented Cybersecurity Challenges

Posted on June 20, 2023December 18, 2023 by Veronica Carlasuc

And Forrester wasn’t alone in sounding the alarm in May about the increasing weaponization of AI by would-be hackers.

Security firm Zscaler (held by the Fund) recently averted a social engineering attack from hackers who had used recordings of CEO Jay Chaudhry’s voice from talks available on the internet to synthesize a soundalike using AI. This soundalike tried via phone to get a Zscaler sales director in India to transfer funds to a bank in Singapore. Zscaler cited the availability of AI as part of the 47% rise the company has seen in phishing attacks over the last year.²

And CISOs are being warned about the security implications of generative AI use by employees. As not every company has its own large language model (LLM), employees are going outside the organization to use public LLMs like ChatGPT, Microsoft’s Bing AI, or Google’s Bard to help make their everyday work tasks easier. As a result, many CISOs are playing catch-up on monitoring how employees are using this technology and assessing what kind of privacy and data security challenges the use of external generative AI poses.³

Industry Updates on Specific Companies

Zscaler Inc

Zscaler announced new AI-powered monitoring capabilities in its Zscaler Digital ExperienceTM (ZDX). The upgraded ZDX platform can provide end-to-end visibility into the user experience, offer intelligent solutions for user issues, and allows troubleshooting through the Zscaler security cloud.

Thanks to the integration of AI, troubleshooting can be reduced from hours or days to mere minutes. This capability is increasingly important with today’s workforce dispersed geographically, which poses challenges for IT and helpdesk teams. According to Zscaler, by using this digital experience monitoring and AI-powered troubleshooting, IT Ops productivity increased 70% within environments secured by Zscaler.⁴

CrowdStrike Inc

To help combat the growing risks posed by AI-enabled hackers, CrowdStrike unveiled its new Charlotte AI, a generative AI cybersecurity analyst meant to help users of the CrowdStrike Falcon platform stay ahead of threats, regardless of their cybersecurity skill level. Charlotte AI lets users as questions in natural language (including English and dozens of other languages) and receive intuitive, plain-language answers in real-time. According to CrowdStrike, the ability for even junior members of a security team to access Charlotte AI and benefit from its insights while hunting threats will mean that more members of an organization’s IT or cybersecurity team will be able to be as effective as a senior member.⁵

Diversified Investing in Cybersecurity with CYBR ETF

Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR), invests in global companies involved in the cybersecurity industry.

Portfolio Strategy and Activity

For the month, Zscaler Inc made the largest contribution to the Fund, followed by Okta Inc and CrowdStrike Holdings Inc. The largest detractors to performance for the month were GDS Holdings Ltd, followed by CACI International Inc and Check Point Software Tech Ltd.

For more information, visit the fund page here: https://evolveetfs.com/cybr/.

Sources:

Columbus, L., “Forrester predicts 2023’s top cybersecurity threats: From generative AI to geopolitical tensions,” VentureBeat, May 22, 2023; https://venturebeat.com/security/forrester-predicts-2023-top-cybersecurity-threats-generative-ai-geopolitical-tensions/
Menn, J., “Cybersecurity faces a challenge from artificial intelligence’s rise,” The Washington Post, May 11, 2023; https://www.washingtonpost.com/technology/2023/05/11/hacking-ai-cybersecurity-future/
Cohen, M., “Workers are secretly using ChatGPT, AI and it will pose big risks for tech leaders,” CNBC, April 30, 2023; https://www.cnbc.com/2023/04/30/the-big-cyber-risks-when-chatgpt-and-ai-are-secretly-used-by-employees.html
“Zscaler Expands Digital Experience Monitoring with New AI-Powered Insights and Analysis to Support Employee Productivity,” Zscaler, May 9, 2023; https://www.zscaler.com/press/zscaler-expands-digital-experience-monitoring-new-ai-powered-insights-and-analysis-support
“CrowdStrike Introduces Charlotte AI to Deliver Generative AI-Powered Cybersecurity,” CrowdStrike, May 30, 2023; https://www.crowdstrike.com/press-releases/crowdstrike-introduces-charlotte-ai-to-deliver-generative-ai-powered-cybersecurity/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

U.S. Banking Sector Crisis Fades as Regional Banks Regain Confidence

Posted on June 15, 2023December 18, 2023 by Veronica Carlasuc

While the acute phase of the banking crisis that struck the US market early in 2023 seems to have diminished, in May there remained some residual jitters amongst regional lenders.

Fresh concerns of a widening financial crisis emerged early in the month when Los Angeles-based regional bank PacWest Bancorp announced it was exploring strategic options for its future, including the potential for a sale or efforts to raise additional capital. PacWest Bancorp reported a loss of $1.1 billion in Q1 this year, which it attributed to the flight of shareholders to the safety of big banks.

This news sent stocks of other regional lenders sharply downward as fear grew that there might be a contagion within small to mid-sized banks.¹

By mid-month, the regional banking sector found a renewed sense of confidence after PacWest Bancorp agreed to sell $2.6 billion worth of real estate construction loans to global real estate investment firm Kennedy-Wilson Holdings Incorporated in an effort to boost its liquidity. In addition, PacWest agreed to sell six other real estate construction loans with an average balance of $363 million to Kennedy-Wilson.

Shares of other regional lenders also benefited mid-month after Western Alliance Bancorp announced strong deposit growth of more than $2 billion in the three months ending May 12. This represented a significant turnaround for Western Alliance, whose shares had plummeted nearly 60% after reports that it, too, was exploring a sale of part or all of its business in recent weeks.²

With stability returning to the regional lenders in light of PacWest and Western Alliance’s turnarounds in May, many industry observers suggest the crisis experienced by the U.S. banking sector in the early part of this year is now behind us.

Updates on Specific Companies

First Citizens BancShares Inc.

First Citizens BancShares reported its Q1 earnings in May, highlighting the acquisition (through its banking subsidiary, First-Citizens Bank & Trust Company) of the deposits, assets, and liabilities of the defunct Silicon Valley Bank (SVB) from the Federal Deposit Insurance Corporation (FDIC).

The purchase of SVB included assets of $106.60 billion, loans of $68.50 billion, including Global Fund Banking, Private Bank, and Technology & Life Science and Healthcare portfolios, as well as $35.28 billion in cash and interest-earning deposits at banks. Also, part of the deal was $55.96 billion in customer deposits.³

First Citizens shares have added approximately 44.2% so far in 2023 versus the overall S&P 500’s gain of 7.3%.⁴

Wells Fargo & Co

Wells Fargo & Co has agreed to settle a lawsuit brought by shareholders who accused the bank of misleading them about its efforts to course correct from scandals involving the treatment of customers. A judge in a Manhattan federal court gave preliminary approval to the $1 billion all-cash settlement in May. Final approval could come in September.

Wells Fargo denied any wrongdoing, with court records showing they agreed to settle the case now in order to avoid the costs and distraction posed by litigation.

Since 2018, Wells Fargo has been operating under consent orders from the Federal Reserve and other regulators, which mandate improved governance and oversight. In a recent letter to shareholders, CEO Charlie Scharf highlighted the strides made to improve both the culture and oversight at the nation’s fourth-largest bank. “Today, we approach these issues differently,” wrote Scharf.⁵

Investing in U.S. banks for enhanced yield with CALL ETF

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Evolve’s U.S. banks ETF, the Evolve US Banks Enhanced Yield Fund (CALL ETF), offers investors a way to benefit from the positive fundamentals of the largest U.S. banks with the added value of a covered call strategy applied on up to 33% of the portfolio. Covered call options have the potential to provide extra income and help hedge long stock positions. It’s your CALL to make.

Portfolio Strategy and Activity

For the month, First Citizens BancShares, Inc. made the largest contribution to the Fund, followed by Wells Fargo & Co. The largest detractors to performance for the month were First Horizon Corporation, followed by Citizens Financial Group Inc and Keycorp.

For more information on CALL ETF, visit our website at https://evolveetfs.com/call/.

Sources:

Singh, M. & Chibuike, O., “PacWest stock plunges as US regional banking woes worsen,” Reuters, May 4, 2023; https://www.reuters.com/markets/us/pacwest-western-alliance-hit-us-banking-concerns-widen-2023-05-04/
Nishant, N. & Chibuike, O., “US regional bank shares rally after Western Alliance reports deposit growth,” Financial Post, May 17, 2023; https://financialpost.com/pmn/business-pmn/us-regional-bank-shares-rally-after-western-alliance-reports-deposits-growth
“First Citizens BancShares Reports First Quarter 2023 Earnings,” First Citizen Bank, May 10, 2023; https://ir.firstcitizens.com/news-and-events/newsroom/news-details/2023/First-Citizens-BancShares-Reports-First-Quarter-2023-Earnings/default.aspx
“First Citizens BancShares (FCNCA) Misses Q1 Earnings Estimates,” Yahoo Life, May 10, 2023; https://ca.style.yahoo.com/first-citizens-bancshares-fcnca-misses-114511530.html
Stempel, J., “Wells Fargo to pay $1 billion to settle shareholder lawsuit over recovery from scandals,” May 16, 2023; https://www.reuters.com/legal/wells-fargo-reaches-1-bln-settlement-with-shareholders-over-recovery-scandals-2023-05-16/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Forecast Predicts $200 Billion Market for Weight Loss Drugs within a Decade

Posted on June 9, 2023December 18, 2023 by Veronica Carlasuc

In a testimony before the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP), the CEO of Eli Lilly & Co., Dave Ricks, pledged not to raise prices on the company’s existing insulin products in response to calls for the drug to be more affordable.

Novo Nordisk CEO Lars Fruergaard Jørgensen said his company would limit price increases to “single digits,” while Sanofi CEO Paul Hudson highlighted his company’s “responsible pricing policy” and the falling net price for Sanofi’s insulin products.

All three companies have faced years of political pressure to make insulin more affordable and, in March, agreed to begin price reductions in Q4 of this year. Together, the three companies (all held by the Fund) control more than 90% of the global insulin supply.¹

Life — Source: hcphms.harvard.edu/news/machine-learning-health

Identified by the World Health Organization as a “critical” threat, A. baumannii is resistant to multiple antibiotics, can survive on surfaces and medical equipment, and can infect wounds and cause pneumonia. With more than a million people dying each year from antibiotic-resistant bacterial infections, the use of AI in scientific research holds the promise of accelerating the discovery of new therapies, potentially saving lives. While abaucin requires further testing, the researchers say they expect the first AI-derived antibiotics to be prescribed by 2030.²

Updates on Specific Healthcare Companies

Novo Nordisk A/S

Novo Nordisk announced in May that unprecedented U.S demand for its obesity drug Wegovy meant the company would be limiting the supply of starter doses so it can ensure availability of the drug for existing patients.³ News of the supply cut came on the heels of Novo Nordisk’s forecast-beating Q1 sales increase—up 27% year-over-year—which was largely due to the sales of their weight loss and diabetes drugs.⁴

Pfizer Inc.

Results of a peer-reviewed phase two clinical trial were released in May, showing that a twice-a-day oral weight loss drug from Pfizer, called danuglipron, resulted in comparable weight loss to Novo Nordisk’s once-a-week injection, Ozempic. In a trial of 411 adults with Type 2 diabetes, participants receiving the danuglipron pills showed statistically significant weight loss after 16 weeks versus those taking a placebo. A daily oral treatment for weight loss could have an advantage in the marketplace over other therapies that require frequent injections.⁵

Danuglipron, Wegovy, and Ozempic are all GLP-1 drugs (glucagon-like peptide-1 agonists), and in May, Barclays forecasted that this class of drugs meant to treat obesity and control weight could be worth as much as $200 billion within a decade.⁶

Investing in Global Healthcare: LIFE

Investing in ETFs can be one way to add cutting-edge healthcare to your portfolio.

Portfolio Strategy and Activity

For the month, Eli Lilly & Co made the largest contribution to the Fund, followed by Intuitive Surgical Inc and Roche Ltd. The largest detractors to performance for the month were Medtronic Plc, followed by Stryker Corporation and Abbvie Inc.

For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Sources:

¹Constantino, A.K., “Eli Lilly CEO vows not to raise insulin prices again, while Novo Nordisk and Sanofi hedge,” CNBC, May 10, 2023; https://www.cnbc.com/2023/05/10/eli-lilly-novo-nordisk-sanofi-ceos-on-insulin-prices.html

²Gallagher, J., “New superbug-killing antibiotic discovered using AI,” BBC News, May 25, 2023; https://www.bbc.com/news/health-65709834

³Gilchrist, K., “Novo Nordisk cuts some U.S. supply of Wegovy obesity drug as demand soars,” CNBC, May 4, 2023; https://www.cnbc.com/2023/05/04/novo-nordisk-cuts-some-supply-of-wegovy-drug-amid-soaring-demand.html

⁴“Novo Nordisk (NVO) Q1 Earnings In Line, Sales Miss, View Up,” Nasdaq, May 4, 2023; https://www.nasdaq.com/articles/novo-nordisk-nvo-q1-earnings-in-line-sales-miss-view-up

⁵Constantino, A.K., “Pfizer oral weight loss drug may be as effective as Ozempic injection by Novo Nordisk, study says,” CNBC, May 22, 2023; https://www.cnbc.com/2023/05/22/pfizer-weight-loss-drug-compares-to-ozempic-by-novo-nordisk.html

⁶Gilchrist, K., “Novo Nordisk cuts some U.S. supply of Wegovy obesity drug as demand soars,” CNBC, May 4, 2023; https://www.cnbc.com/2023/05/04/novo-nordisk-cuts-some-supply-of-wegovy-drug-amid-soaring-demand.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Microsoft Partners with AMD to Strengthen Cloud Computing Capabilities

Posted on June 6, 2023December 18, 2023 by Veronica Carlasuc

India — Source: Zmurphy369, Getty Images

Meanwhile, also in the Asia-Pacific region, China’s largest cloud service, Alibaba Cloud, has begun streamlining its business in preparations for a spinoff over the next year, followed by an eventual IPO. The cloud division has started reducing staffing levels by 7% as part of their early efforts at transforming into what CEO Daniel Zhang termed the ‘Cloud Intelligence’ division, which will include Alibaba Cloud, AI, and DingTalk.

Alibaba Group Holding Ltd. plans to divide into six separate companies, with Alibaba Cloud being one of the biggest individual spinoffs, with projected annual revenue of up to $30 billion USD.²

Updates on Specific Cloud Companies

IBM, SAP — Source: www.ciol.com/sap-to-embed-ibm-watson-ai-into-sap-solutions/

SAP SE

SAP SE and IBM announced a partnership in May that will see IBM Watson AI technology integrated into SAP applications. IBM Watson will play a crucial role in driving the digital assistant feature within SAP Start. By incorporating IBM Watson into SAP Start, users will enjoy a seamless and consolidated entry point for SAP’s comprehensive range of cloud offerings.

By leveraging the power of IBM Watson’s AI capabilities within SAP Start, SAP aims to revolutionize the user experience within its cloud environment and create a more efficient and effective platform for users. With IBM Watson’s advanced natural language capabilities and predictive insights, users will have an enhanced ability to search for and interact with the various apps available in SAP and SAP S/4HANA Cloud.³

Microsoft, AMD — Source: Reuters/Dado Ruvic/Illustration

Microsoft Inc.

In a bid to strengthen its cloud computing capabilities, Microsoft has partnered with AMD to expand the chipmaker’s presence in artificial intelligence processors.

The exponential growth of AI services, such as the wildly popular ChatGPT, has meant a spike in demand for processors that can handle the substantial cloud-based computational workloads. Microsoft has recently introduced AI-driven features, such as a chat-based version of Bing and AI-enhanced tools within Office. It is likewise updating existing products like GitHub’s code-generating tool to leverage the benefits of AI.⁴ All these AI programs heavily rely on Nvidia’s processors, highlighting the dependence of Microsoft’s Azure Cloud infrastructure on those chips.

The partnership with AMD aims to challenge Nvidia, which dominates the AI processor market with a staggering 80% share, and is part of Microsoft’s larger strategy to ensure it has access to multiple sources of processors (including developing in-house AI chips) to help it build and maintain its Azure Cloud capabilities.⁵

Investing in Cloud Computing with DATA ETF

Portfolio Strategy and Activity

For the month, Amazon.com Inc made the largest contribution to the Fund, followed by ServiceNow Inc and Alphabet Inc. The largest detractors to performance for the month were Intuit, followed by SAP Se and Paylocity Holding Corp.

For more information about Evolve Cloud Computing Index Fund, please click here: https://evolveetfs.com/data/.

Sources:

¹Bourne, J., “AWS to put $13 billion into India cloud infrastructure by 2030,” Cloud Tech, May 22, 2023; https://www.cloudcomputing-news.net/news/2023/may/22/aws-to-put-13-billion-into-india-cloud-infrastructure-by-2030/

²“Alibaba’s Cloud Arm to Cut 7% of Staff in Overhaul, Sources Say,” Bloomberg News, May 23, 2023; https://www.bloomberg.com/news/articles/2023-05-23/alibaba-s-cloud-arm-is-said-to-cut-7-of-staff-in-overhaul

³“SAP to Embed IBM Watson Artificial Intelligence into SAP Solutions,” SAP News, May 2, 2023; https://news.sap.com/2023/05/ibm-watson-artificial-intelligence-in-sap-solutions/

⁴Bass, D., & King, I., “Microsoft Working With AMD on Expansion Into AI Processors,” Bloomberg, May 4, 2023; https://www.bloomberg.com/news/articles/2023-05-04/microsoft-is-helping-finance-amd-s-expansion-into-ai-chips

⁴Weatherbed, J., “Microsoft is reportedly helping AMD expand into AI chips,” The Verge, May 5, 2023; https://www.theverge.com/2023/5/5/23712242/microsoft-amd-ai-processor-chip-nvidia-gpu-athena-mi300

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Advancements in EV Technology Expected to Drive Demand Over the Next Decade

Posted on June 2, 2023December 18, 2023 by Veronica Carlasuc

The Electric Vehicle (EV) industry is facing a significant surge as the US government plans substantial changes in auto emissions standards. The proposed alterations are set to compel automakers to dramatically increase the sale of electric vehicles. By 2032, about two-thirds of all new cars sold in America would have to be electric. Without these obligations, the transition to this kind of market share was projected to be beyond 2035, according to Moody’s industry analyst, Matthias Heck. The proposed goals by the EPA are achievable, but challenging, requiring high levels of investment to meet the target.

As the next decade unfolds, profound changes in charging infrastructure and vehicle technology are expected. With improvements in battery technology and decreasing prices, consumers will be increasingly attracted to electric vehicles. The Inflation Reduction Act will further facilitate this shift through government incentives.¹ On a related note, Tesla’s recent announcement states that the batteries powering its Model S and Model X vehicles lose approximately 12% of their maximum capacity after approximately 200,000 miles, which interestingly also happens to be the average lifespan of a US vehicle.²

Chinese automakers are also making significant strides in the EV industry, challenging Western and Japanese brands in their domestic markets. Brands like BYD Auto offer fast-evolving technology and competitive prices, factors Tesla CFO referred to as “scary.” NIO Inc., another Chinese player, has successfully persuaded Chinese customers to match Tesla-level prices, and it is set to launch its new SUV, ES6, in Europe later this year. The Chinese government’s stringent regulations on EV credits has encouraged these brands to develop competitive EVs even without subsidies, further increasing their global market competitiveness.³

In the midst of this revolution, Mercedes-Benz is leveraging its Formula One team to expedite and enhance the development of efficient mass-market electric vehicles. The collaboration aims to reduce development times by at least a quarter as it propels efforts to compete with Tesla. Mercedes’ initiative is unique as it directly applies the racing mindset and technological expertise in product development. After decades of leading in combustion-engine technology, traditional carmakers like Mercedes have trailed Tesla in electric vehicles. However, the F1 team’s involvement could help Mercedes regain its competitive edge in the burgeoning EV market.⁴

Updates on Specific EV Companies

Microvision Inc

Microvision has reported encouraging financial results for Q1 2023 with revenue reaching $0.8 million, twice the $0.4 million figure of Q1 2022. This significant revenue growth in the first quarter has been primarily attributed to the acquisition of assets from Ibeo Automotive Systems GmbH. The boost in revenue reflects the successful sale of lidar hardware and associated software to a range of customers. The company’s leadership is particularly enthusiastic about the promising momentum of the financial performance, which exceeded expectations for this period.

CEO Sumit Sharma expressed his satisfaction with the substantial achievements made in the first quarter. The revenue growth was driven by the company’s expanded product offerings, efficient integration of teams in the U.S. and Germany, and accelerated engagement with multiple Original Equipment Manufacturers (OEMs). The CEO maintains an optimistic outlook for the future, reiterating Microvision’s 2023 revenue guidance of $10-15 million, derived from the company’s expanded product suite. This sustained progress in their top line reveals a robust business strategy and a promising future for the company.⁵

Nvidia

The EV industry’s growth is intrinsically tied to advancements in AI and semiconductors, essential for high-performance operations and autonomous driving. Leading semiconductor and AI firm, Nvidia, has reported impressive Q1 results for fiscal 2024, with earnings and revenue exceeding expectations. Its automotive division, responsible for chips and software for self-driving cars saw a remarkable 114% YoY growth. With its strong financial forecast indicating a crucial role in the EV market, Nvidia’s progress underscores the impact of AI and semiconductors on the EV industry’s future.⁶

EVgo Inc

EVgo Inc. released its Q1 2023 earnings in May, surpassing Wall Street projections for earnings per share. The company reported an EPS loss of $0.18 per share, an improvement over Wall Street’s estimated loss of $0.21 per share. However, the firm posted slightly disappointing revenues of $25.3 million, falling short of consensus estimates of $26.9 million. Despite this, the revenue figure represents a substantial 228.57% increase from the year-ago report. As the operator of a public DC fast-charging network in the U.S., EVgo’s growth in revenue is noteworthy. Nonetheless, the decline in earnings despite increased revenue indicates a decrease in profit margins for the company.⁷

Investing in Electric Vehicles: CARS ETF

If you’re looking to invest in electric vehicles, consider Canada’s first automobile innovation ETF, Evolve Automobile Innovation Index Fund (TSX Ticker: CARS). CARS ETF invests in global companies that are directly or indirectly involved in developing electric drivetrains, autonomous driving, or network-connected services for automobiles. Shift your investments into gear with CARS in your portfolio.

Portfolio Strategy and Activity*

The Evolve Automobile Innovation Index Fund returned 5.79% during the month of May. For the month, Microvision made the largest contribution to the Fund, followed by Nvidia and Fluence Energy. The largest detractors to performance for the month were EVgo, followed by Xpeng and Bloom Energy.

For more information on the Evolve Automobile Innovation Index Fund, please click here: https://evolveetfs.com/cars/.

*Source: Bloomberg as at May 31, 2023.

Sources:

¹Valdes-Dapena, P. (2023, April 12). US Government’s proposal to boost EV sales is challenging but not impossible | CNN business. CNN. https://www.cnn.com/2023/04/12/business/electric-car-regulations-response/index.html

²Kana, J. (2023, April 26). Tesla: EV batteries lose just 12% range after 320,000 km – driving. Driving.ca. https://driving.ca/auto-news/driver-info/tesla-ev-batteries-lose-12-range-320000-km

³McDonald, J., & Kageyama, Y. (2023, May 1). Chinese electric vehicle brands expand to global markets. ABC News. https://abcnews.go.com/Technology/wireStory/chinese-electric-vehicle-brands-expand-global-markets-99002558

⁴CNBC. (2023, May 2). In race for efficient evs, Mercedes taps F1 team to keep up with Tesla. CNBC. https://www.cnbc.com/2023/05/02/in-race-for-efficient-evs-mercedes-taps-f1-team-to-keep-up-with-tesla.html#:~:text=Mercedes%2DBenz%20has%20plugged%20its,over%20into%20mass%2Dmarket%20vehicles.

⁵Yahoo! (2023, May 9). Microvision announces First Quarter 2023 results. Yahoo! Finance. https://finance.yahoo.com/news/microvision-announces-first-quarter-2023-205000947.html

⁶Leswing, K. (2023, May 24). Nvidia shares spike 26% on huge forecast beat driven by A.I. chip demand. CNBC. https://www.cnbc.com/2023/05/24/nvidia-nvda-earnings-report-q1-2024.html

⁷InvestorsObserver. (2023, May 9). Evgo inc down 7.89% to $5.93 after earnings beat. InvestorsObserver. https://www.investorsobserver.com/news/stock-update/evgo-inc-down-7-89-to-5-93-after-earnings-beat

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How FANGMA Companies Are Racing to Lead the AI Revolution

Posted on May 29, 2023May 30, 2023 by Veronica Carlasuc

If you think you’ve noticed a flood of business stories centred around artificial intelligence (AI) in recent months, you’re certainly not mistaken.

With the advent of ChatGPT, the spotlight has firmly shifted onto AI, capturing the attention of investors and analysts alike.

In a race to take advantage of AI’s potential and its transformative capabilities, major tech players and especially the FANGMA companies—Facebook (Meta), Apple, Netflix, Google, Microsoft, and Amazon—are pursuing AI investments with a sense of urgency.

Let’s look at how the FANGMA companies are positioning themselves to take advantage of AI’s potential and secure their position in this burgeoning field.

Generative AI Takes Center Stage for Meta and Facebook

In a recent earnings call, Meta Platforms Inc. CEO Mark Zuckerberg underscored the significant role generative AI will have in shaping the future of Meta. Generative AI will soon “touch every single one of our products,” Zuckerberg said, specifically highlighting plans to integrate “AI agents,” such as chatbots and digital assistants, into billions of users’ experiences for tasks like business communication, customer support, and writing code.¹

Meta is also using AI to drive its ranking and recommendation systems, and has plans for incorporating generative AI into the popular messaging platforms WhatsApp and Messenger. Meta is also conducting tests on “visual creation tools” powered by artificial intelligence. These tools have the capability to generate content like image backgrounds and text variations to enhance posts and ads on Facebook and Instagram.²

A select group of advertisers will make up the initial list of invitees to experiment with these new tools in a designated “testing playground” called the AI Sandbox. Additional advertisers will gain access in July, and selected features will roll out for general-purpose ad products later in the year.³

While not as far along in incorporating AI as some of its competitors, due to its wide range of product offerings, Meta sees itself as uniquely positioned to adopt a comprehensive approach to generative AI—an advantage that few organizations can rival.⁴

Amazon Using AI to Revolutionize Customer Experience

Amazon is leveraging AI to enhance its delivery process and ensure faster shipping times by reducing the distance between products and customers. The company is implementing a “regionalization” strategy to dispatch items from warehouses nearest to customers rather than shipping from distant locations. The key focus for Amazon is achieving a lower cost of service through optimized inventory placement and speedy deliveries.

AI is tailor-made for such a task, as it is capable of analyzing vast amounts of data and patterns to predict product demand, determine the ideal locations for distribution, and even optimize logistics and transportation of goods, right down to mapping and planning delivery routes, taking factors like traffic and even weather conditions into account.⁵

Recent reports also suggest that Amazon is developing a new generative AI technology called Burnham. This technology aims to enhance Amazon’s smart home robot, Astro, by integrating large language models to provide a conversational spoken interface. Although it is still a work in progress, Amazon’s plans for Burnham and Astro involve introducing “contextual understanding.” This means that the robot, using AI, will be capable of identifying and addressing issues like alerting homeowners about a left-on stove, proactively cleaning up broken glass to prevent injuries, or even calling emergency services when someone requires assistance.⁶

How Netflix Harnesses AI in Entertainment

Netflix recently premiered a captivating three-minute animated short called “The Dog and the Boy,” marking a milestone in using AI technology to generate animation backgrounds. In response to a labour shortage within the Japanese anime industry, Netflix took the lead in integrating generative AI into animation, demonstrating the potential to expedite production times, and offering artists innovative tools to enhance their work in the entertainment industry.⁷

Netflix is likewise employing AI in live-action productions. With the proliferation of new original series in recent years, Netflix has formed partnerships with a number of venture capital-backed AI startups. These collaborations provide visual effects artists with invaluable tools to meet the demand for fresh content. Certain AI tools already enable special effects artists to accomplish in 20 minutes what previously required three full days of their time.⁸

While the current focus lies in AI’s capacity to de-age actors, recreate the voices of deceased performers, and digitally sharpen and enhance aging film and TV footage, AI tools capable of writing complete scripts, composing film scores, and generating personalized video game experiences are the next expected breakthroughs in this field.⁹

Understandably, these possibilities have raised concerns within certain sectors of the entertainment industry. A significant point of contention in the ongoing strike by the Writer’s Guild of America (WGA) revolves around future potential applications of AI in Hollywood. Specifically, the WGA has identified a clause in a Netflix contract that permits the unrestricted usage of an AI simulation of an actor’s voice through “all technologies and processes now known or hereafter developed, throughout the universe and in perpetuity” as particularly problematic.¹⁰

Google Unveils ‘Search Generation’ Powered by AI

At Google’s annual I/O developers’ conference in May, Alphabet CEO Sundar Pichai announced the widespread integration of AI into Google’s offerings. “We are reimagining all of our core products, including search,” said Pichai.

Part of these changes include the global expansion of Google Bard, the AI-powered chatbot, which is currently available in English-speaking countries. Google plans to make Bard accessible to users in over 180 countries and in multiple languages. Additionally, Google Bard will be “multimodal,” offering not only text-based responses but also AI-generated images in an effort to distinguish itself from its competitor, ChatGPT.¹¹

Moreover, AI enhancements will be introduced to popular Google products such as Gmail and Google Photos. Users will soon be able to draft emails using AI or apply advanced image manipulation techniques to photos, such as centring figures and colouring empty spaces.

However, the most ground-breaking change is happening to Google’s core product: search. Google introduced an invite-only demo of its new “Search Generation Experience” during the conference, marking the most significant upgrade to Google search in two decades. This enhanced search experience is powered by Google’s latest and most robust AI model, PaLM 2. Throughout the invite-only phase, Google will closely monitor the quality, speed, and cost of search results to maximize the efficiency of the Search Generation Experience.¹²

The primary goal of the Search Generation Experience is to provide users with more accurate and conversational results than previous iterations of Bard. Google intends to prevent misleading information by prioritizing accuracy and citing trustworthy sources in Bard’s responses, reducing the occurrence of so-called “hallucinations” where an AI generates inaccurate content. Furthermore, Google will implement image markup on AI-generated images to aid users in verifying the authenticity of pictures, a move towards promoting accuracy and reliability.¹³

From Consumer Products to Cloud Services: Microsoft’s AI Revolution

Having poured a reported $13 billion investment into OpenAI, the startup responsible for ChatGPT, Microsoft has wasted no time in integrating AI technology into its many offerings.¹⁴

Microsoft has made significant improvements to its AI-based search tools and announced the release of an open preview of its enhanced Bing search engine and Edge web browser. These tools now offer visual and multimodal searches, and the ability to generate charts, graphs, and other visuals within a search. Additionally, Bing Chat allows users to save and revisit previous interactions, enabling the AI to deliver more personalized and improved answers over time.

Bing is having a moment overall, surging in popularity since integrating GPT-4 into its programming. With over 100 million daily active users and a 4x increase in daily installs of the Bing mobile app, Microsoft’s AI-driven search capabilities have gained significant traction.¹⁵

However, Microsoft’s commitment to AI goes beyond consumer-facing products. Its cloud services are crucial to powering AI systems and driving innovation across various industries.

In the manufacturing sector, companies like Mercedes-Benz, Strabag, and Coca-Cola have harnessed the power of Microsoft’s cloud services to boost efficiency, reduce costs, and bolster security. Retailers such as Unilever, Campari Group, and Żabka have transformed customer experiences through AI and data-driven insights. Financial services providers like Finvero, HDFC Bank, and Sapiens have reinvented their offerings through cloud capabilities and innovation. In the transportation and energy industries, organizations like Ecolab, FirstGroup, and Deutsche Bahn have made significant strides in sustainability using data and automation. And professional services companies such as Laerdal Medical, Amdocs, and KPMG have been empowered with cutting-edge data and generative AI solutions.

Microsoft’s commitment to AI innovation is evident in its cloud services, providing businesses with the tools and technologies necessary to thrive in an increasingly AI-driven world.¹⁶

Apple Explores the AI Landscape with Deliberation

Unlike many of its competitors in the tech industry, Apple has taken a more cautious approach to embracing AI.

During a recent earnings call, Apple CEO Tim Cook notably omitted any mention of AI in his opening statements. Moreover, when asked about generative AI during the Q&A session, Cook stuck to Apple’s tradition of secrecy by remaining tight-lipped about the company’s potential future projects. Instead, he would only say, “I do think it’s very important to be deliberate and thoughtful in how you approach these things.”

Despite not dropping everything to pivot to generative AI, Cook acknowledged that Apple is no stranger to AI. One example is Siri, the voice assistant that utilizes natural language processing across multiple Apple devices. AI is also integrated into iOS software and can be found in various features of iPhones and Apple Watches. Noteworthy functionalities include fall detection, crash detection, and electrocardiogram (ECG) monitoring.¹⁷

In line with this commitment to health and well-being, Apple is reportedly focusing its AI efforts in this area. Reports suggest that the company is working on an AI-powered health coaching service, internally referred to as Quartz. This service, which would be available for a monthly fee, aims to motivate users to exercise, improve their eating habits, and enhance their quality of sleep. By leveraging AI learning and data from the user’s Apple Watch, Quartz will personalize coaching programs tailored to individual needs. Apple’s health, Siri, and AI teams are said to be collaborating on this initiative, with a potential launch as early as 2024.

Furthermore, Apple’s Health app may be upgraded with the ability to track emotions and manage vision conditions like nearsightedness. Users would be able to log their mood and answer questions about their day, enabling AI algorithms to follow and comprehend their emotional state based on speech, text, and other input.¹⁸

Investing in FANGMA: TECH ETF

With the Evolve FANGMA Index ETF (TECH ETF), investors gain exposure to all six companies – Facebook, Amazon, Netflix, Google, Microsoft, and Apple – for a reasonable unit price.

For more information about the Evolve FANGMA Index ETF (TECH ETF) or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Sources:

Heath, A., “Mark Zuckerberg says Meta wants to ‘introduce AI agents to billions of people’,” The Verge, April 26, 2023; https://www.theverge.com/2023/4/26/23699633/mark-zuckerberg-meta-generative-ai-chatbots-instagram-facebook-whatsapp
Paul, K. & Bhuiyan, J., “It’s a tough time for Meta. Can AI help make the company relevant again?”, The Guardian, May 11, 2023; https://www.theguardian.com/technology/2023/may/11/meta-artificial-intelligence-metaverse-mark-zuckerberg
Paul, K. & Dang, S., “Facebook owner Meta announces tests of generative AI ads tool,” Reuters, May 11, 2023; https://www.reuters.com/technology/facebook-owner-meta-announces-tests-generative-ai-ads-tool-2023-05-11/
Paul, K. & Bhuiyan, J., “It’s a tough time for Meta. Can AI help make the company relevant again?”, The Guardian, May 11, 2023; https://www.theguardian.com/technology/2023/may/11/meta-artificial-intelligence-metaverse-mark-zuckerberg
Kharpal, A., “Amazon is focusing on using A.I. to get stuff delivered to you faster,” CNBC, May 15, 2023; https://www.cnbc.com/2023/05/15/amazon-is-focusing-on-using-ai-to-get-stuff-delivered-to-you-faster.html
Pattison Tuohy, J., “Amazon’s working on a secret new home robot that could be more like Rosie,” The Verge, May 12, 2023; https://www.theverge.com/2023/5/12/23721400/amazon-astro-smarter-home-robot-ai
Deikova, M., “Netflix Uses AI to Generate Anime Short Film – Reactions Follow,” CineD, February 6, 2023; https://www.cined.com/netflix-uses-ai-to-generate-anime-short-film-reactions-follow/
Moses, L., “10 startups bringing AI tech to Netflix, Lucasfilm, Marvel, and more Hollywood studios — and attracting millions in VC funding,” Business Insider, May 8, 2023; https://www.businessinsider.com/ai-startups-netflix-marvel-lucasfilm-holllywood-deepfake-dubbing-vc-funding-2023-3
Ibid
Scheiber, N. & Koblin, J., “Will a Chatbot Write the Next ‘Succession’?,” The New York Times, May 2, 2023; https://www.nytimes.com/2023/04/29/business/media/writers-guild-hollywood-ai-chatgpt.html
“Google Fights Back Against Microsoft With New AI Search Capabilities,” Forbes, May 12, 2023; https://www.forbes.com/sites/qai/2023/05/12/google-fights-back-against-microsoft-with-new-ai-search-capabilities/
Dastin, J. & Bensinger, G., “Google I/O 2023: Search king adds AI to respond to Microsoft challenge,” Reuters, May 11, 2023; https://www.reuters.com/technology/google-expected-unveil-its-answer-microsofts-ai-search-challenge-2023-05-10/
“Google Fights Back Against Microsoft With New AI Search Capabilities,” Forbes, May 12, 2023; https://www.forbes.com/sites/qai/2023/05/12/google-fights-back-against-microsoft-with-new-ai-search-capabilities/
Novet, J., “Microsoft’s $13 billion bet on OpenAI carries huge potential along with plenty of uncertainty,” April 8, 2023; https://www.cnbc.com/2023/04/08/microsofts-complex-bet-on-openai-brings-potential-and-uncertainty.html
Nuñez, M., “Microsoft launches new features for its AI-powered Bing and Edge,” VentureBeat, May 4, 2023; https://venturebeat.com/ai/microsoft-launches-new-features-for-its-ai-powered-bing-and-edge/
Althoff, J., “The era of AI: How the Microsoft Cloud is accelerating AI transformation across industries,” Microsoft, Apr 24, 2023; https://blogs.microsoft.com/blog/2023/04/24/the-era-of-ai-how-the-microsoft-cloud-is-accelerating-ai-transformation-across-industries/
Kerner, S.M., “What are Apple’s plans for generative AI? Tim Cook wants to be ‘thoughtful’,” VentureBeat, May 5, 2023; https://venturebeat.com/ai/apple-plans-generative-ai-tim-cook-wants-to-be-thoughtful/
Malik, A., “Apple is reportedly developing an AI-powered health coaching service,” TechCrunch, April 25, 2023; https://techcrunch.com/2023/04/25/apple-is-reportedly-developing-an-ai-powered-health-coaching-service/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Premium Cash Management Fund and US Premium Cash Management Fund Begin Trading Today on TSX

Posted on May 29, 2023May 29, 2023 by Veronica Carlasuc

TORONTO, May 29, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve” or “the Manager“) is pleased to announce the launch of the Premium Cash Management Fund (“MCAD“) and US Premium Cash Management Fund (“MUSD“) (Collectively, the “Evolve Funds“). The Evolve Funds have closed initial offering of units and will begin trading on the Toronto Stock Exchange (“TSX“) today under the ticker symbols: MCAD and MUSD.U.

The Evolve Funds are designed to provide investors with the ability to maximize current income, while at the same time preserving capital and maintaining liquidity, by investing primarily in Canadian dollar-denominated and U.S. dollar-denominated high-quality short term debt securities (with a term to maturity of 365 days or less), respectively.

Premium Cash Management Fund

MCAD invests primarily in Canadian dollar-denominated high-quality short term debt instruments such as treasury bills, bankers acceptances, bearer deposit notes, commercial paper (including asset-backed commercial paper), promissory notes, floating rate notes as well as other short term debt obligations of, or guaranteed by, the Canadian governments or their agencies, Canadian chartered banks, Canadian loan or trust companies or Canadian corporations.

US Premium Cash Management Fund

MUSD invests primarily in U.S. dollar-denominated high-quality short term debt instruments such as treasury bills, bankers acceptances, bearer deposit notes, commercial paper (including asset-backed commercial paper), promissory notes, floating rate notes as well as other short term debt obligations of, or guaranteed by, the U.S. governments or their agencies, U.S. chartered banks, U.S. loan or trust companies or U.S. corporations

The following chart sets out the ETF Units for each of the Evolve Funds:

Evolve Funds	ETF Units
Evolve Funds	Unhedged ETF Units (CAD$)	USD Unhedged ETF Units (USD$)
Premium Cash Management Fund	MCAD	–
US Premium Cash Management Fund	–	MUSD

About Evolve Funds Group Inc.

With over $6.1 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook

SOURCE Evolve ETFs

For further information: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884; MEDIA CONTACT, Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Meta Wants to Bring AI Agents and the Metaverse to the Masses

Posted on May 25, 2023December 18, 2023 by Veronica Carlasuc

Google and Nvidia made duelling announcements in April that have implications for advancements in both AI and the metaverse.

Google published details about its latest artificial intelligence supercomputer in April, claiming its computer was faster, more efficient, and required nearly 2x less energy than rival Nvidia’s systems. While Nvidia’s graphics processing units (GPUs) control more than 90% of the market for AI model training and deployment, the new Google supercomputer uses 4000 of Google’s own tensor processing units (TPUs), which have been in development for AI training since 2016.¹

MESH — Source: acquisition-international.com/ai-and-metaverse

For its part, Nvidia unveiled new software called NeMo Guardrails, built to help AI designers prevent their models from stating incorrect or invented facts as accurate, prevent the chatbots from discussing harmful subjects, and prevent them from opening security vulnerabilities. The tendency of large language models like ChatGPT to invent information—so-called “hallucination”—is an ongoing challenge with the latest generation of AI models.²

As with Meta’s AI Research SuperCluster (RSC) supercomputer announced last year, next-generation supercomputers will be necessary for the massive computing needs of the metaverse. The improved AI models that such computers will make possible—ones that overcome the hallucination problem—will be the backbone of content-moderation algorithms, multimodal signal sorting, and augmented-reality features (amongst others) that will make the metaverse a safe, functional, and enjoyable space for users.³

Meanwhile, hints continue to trickle out on what we can expect from Apple’s long-rumoured mixed reality headset, reportedly set to debut at Apple’s Worldwide Developers’ Conference in June. Reporting in April suggests the mixed reality headset can switch between virtual reality (VR) and augmented reality (AR) and that the device will focus heavily on gaming, sports, and collaborative tools, as well as run Apple Fitness+ workouts in VR. Customers will be able to use “millions” of other existing apps on the headset’s 3D interface “with slight modifications” from developers.⁴

The device will also allow Apple to leverage its streaming rights for Major League Soccer and Major League Baseball by enabling “immersive sports viewing,” as well as “immersive video,” which will let users watch videos in virtual environments like a desert or the sky.⁵

The move into mixed reality has been signaled by Apple for years, and more recent generations of iPhones already contain metaverse-ready hardware and software.⁶ But the ultimate goal for an Apple mixed reality headset is to move such devices out of the hands of enthusiasts and early adopters and make them a widespread consumer product. If successful, some industry watchers suggest an Apple AR/VR headset could be the company’s biggest hit since the iPhone.⁷

Updates on Specific Companies

Meta Platforms Inc

Meta reported its first sales increase in four quarters in April and issued optimistic guidance for the rest of the year. Meta’s Q1 sales were up 3% year over year to $28.6 billion, and for Q2 Meta now expects revenue of between $29.5 billion and $32 billion against analyst expectations of $29.5 billion.⁸

On the April earnings call, CEO Mark Zuckerberg emphasized generative AI’s role in Meta’s future. Promising that generative AI will soon “touch every single one of our products,” Zuckerberg highlighted plans to introduce “AI agents” like chatbots or digital assistants like Siri and Alexa to billions of users—businesses and regular people alike—for tasks including business messaging, customer support, the creation of metaverse avatars, and the writing of code. Zuckerberg also said that any suggestion Meta is moving away from the metaverse is “not accurate,” and highlighted the upcoming release of the next Quest VR headset later this year.⁹

Microsoft

Microsoft reported revenue of $52.86 billion, beating expectations of $51.02 billion. Net income was $18.3 billion (up 9%), while revenue grew 7% year-over-year. Microsoft’s cloud-based offerings continued attracting new customers with sales up 22% to $28.5 billion. Microsoft also plans to increase spending on its cloud data centers to meet growing customer demand for new AI tools.¹⁰

While Microsoft and Activision Blizzard plan to appeal the ruling, the deal isn’t out of the woods even if they are successful. Both the US Federal Trade Commission and the European Union are evaluating the proposed takeover based on similar competition concerns.¹²

With Microsoft initially talking up the importance of the Activision Blizzard acquisition as strengthening its future offerings in the metaverse, if the deal ultimately falls through it remains to be seen what that means for Microsoft’s plans to compete with metaverse competitors like Sony, Amazon, and Google.¹³

MESH ETF: Diversified Investing in Metaverse

Looking to invest in the Metaverse? The Evolve Metaverse ETF (MESH ETF) is Canada’s first metaverse ETF.

MESH ETF provides investors with an actively managed diversified portfolio of companies involved in the development of the metaverse.

MESH ETF Portfolio Strategy and Activity

For the month, Meta Platforms Inc made the largest contribution to the Fund, followed by Ubisoft Entertainment and Microsoft Corp. The largest detractors to performance for the month were Snap Inc, followed by Roblox Corp and Coinbase Global Inc.

To learn more about MESH ETF, please click here: https://evolveetfs.com/mesh/.

To stay updated with insights on investing and related investment products, sign up for our weekly newsletter here.

Sources:

Leswing, K., “Google reveals its newest A.I. supercomputer, says it beats Nvidia,” CNBC, April 4, 2023; https://www.cnbc.com/2023/04/05/google-reveals-its-newest-ai-supercomputer-claims-it-beats-nvidia-.html
Leswing, K., “Nvidia has a new way to prevent A.I. chatbots from ‘hallucinating’ wrong facts,” CNBC, April 25, 2023; https://www.cnbc.com/2023/04/25/nvidia-nemo-guardrails-software-stops-ai-chatbots-from-hallucinating.html
Dominguez, D., “Meta Unveils AI Supercomputer for the Metaverse,” InfoQ, February 1, 2022; https://www.infoq.com/news/2022/02/meta-metaverse-ai-supercomputer/
Shanklin, W., “Latest Apple headset rumors say it’ll include VR workouts and sports,” Engadget, April 18, 2023; https://www.engadget.com/latest-apple-headset-rumors-say-itll-include-vr-workouts-and-sports-192316389.html
Gurman, M., “Apple’s AR/VR Headset to Feature Sports, Gaming, iPad Apps and Workouts,” Bloomberg, April 18, 2023; https://www.bloomberg.com/news/articles/2023-04-18/apple-vr-ar-headset-apps-sports-tv-fitness-gaming-wellness-ipad-features
“Apple Metaverse; How Apple Enters the New Digital Frontier,” Metamandrill, n.d., https://metamandrill.com/apple-metaverse/
Mims, C., “Apple’s iPhone Successor Comes Into Focus,” The Wall Street Journal, December 4, 2021; https://www.wsj.com/articles/apples-iphone-successor-comes-into-focus-11638594004
Vanian, J., “Meta shares pop 12% after company reports first sales increase in four quarters, issues optimistic guidance,” CNBC, April 26, 2023; https://www.cnbc.com/2023/04/26/facebook-meta-q1-earnings-report.html
Heath, A., “Mark Zuckerberg says Meta wants to ‘introduce AI agents to billions of people’,” The Verge, April 26, 2023; https://www.theverge.com/2023/4/26/23699633/mark-zuckerberg-meta-generative-ai-chatbots-instagram-facebook-whatsapp
Bass, D., “Microsoft Profit, Sales Top Estimates on Strong Cloud Demand,” Bloomberg, April 25, 2023; https://www.bloomberg.com/news/articles/2023-04-25/microsoft-profit-sales-top-estimates-as-cloud-growth-endures
Ziady, H., “UK blocks Microsoft takeover of Activision Blizzard,” CNN Business, April 26, 2023; https://www.cnn.com/2023/04/26/tech/microsoft-activision-blizzard/index.html
Ibid
Weise, K., Ross Sorkin, A., Browning, K. & de la Merced, M.J., “Microsoft will buy Activision Blizzard, betting $70 billion on the future of games,” The New York Times, January 18, 2022; https://www.nytimes.com/2022/01/18/business/microsoft-activision-blizzard.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Stronger-Than-Expected Revenue from Big Tech So Far In 2023

Posted on May 18, 2023May 23, 2023 by Veronica Carlasuc

The tech industry has had a strong 2023 so far, as many of the biggest players in the sector surprised market watchers with stronger-than-expected earnings results in the most recent quarter.

The FANGMA stocks—Facebook, Apple, Netflix, Google, Microsoft, and Amazon—are not only performing well but are now “the sustainable bedrock of the modern economy,” as well as where the ‘next big thing’ in the digital world is set to happen.¹

With ongoing economic uncertainty, many investors are looking to the strength of FANGMA stocks to help them weather whatever storms may be on the horizon.

Facebook

Meta Platforms Inc. (the parent company of Facebook) reported its first sales increase in four quarters in April and issued optimistic guidance for the rest of the year. Meta’s Q1 sales were up 3% year over year to $28.6 billion, and for Q2 Meta now expects revenue of between $29.5 billion and $32 billion against analyst expectations of $29.5 billion.²

On the April earnings call, CEO Mark Zuckerberg emphasized the role generative AI will play in Meta’s future. Promising that generative AI will soon “touch every single one of our products,” Zuckerberg highlighted plans to introduce “AI agents” like chatbots or digital assistants like Siri and Alexa to billions of users—businesses and regular people alike—for tasks including business messaging, customer support, the creation of metaverse avatars, and the writing of code.³

Amazon

Amazon.com Inc. showed a stronger-than-expected quarterly profit thanks to cost-cutting measures and sales growth in Amazon Web Services (AWS), its cloud-computing division. Revenue was up 9.4% from the previous year to $127.4 billion, beating expectations of $124.7 billion.⁴

AWS, a key profit center for Amazon for nearly a decade, also experienced stronger-than-expected growth in Q1, with revenue up 16% to $21.35 billion. While AWS maintains a sizeable lead in the global cloud infrastructure market, the division is adopting a different growth strategy from competitors (who are investing in outside AI companies or consumer-facing tools). Instead, AWS is focused on becoming a “neutral platform” providing businesses access to generative AI products without tying them to a single model. AWS will sell access to language models on a new service called Bedrock, which will enable access to models by Anthropic, Stability AI and AI21 Labs, as well as Amazon’s own language model, Titan, which can be trained on a customer’s data and avoid mingling public and private data in model.⁵

Netflix

In Q1, Netflix generated over $2 billion in free cash flow and reported a net income of $1.31 billion. Although the company fell short of analyst projections for new subscribers, with 1.75 million new customers instead of the expected 2.04 million, it remains optimistic about future growth. The introduction of new strategies, such as cracking down on password sharing and expanding the availability of an ads-supported membership tier, is expected to fuel growth in the second half of 2023.

This quarter, Netflix plans to implement its password crackdown in the United States. It anticipates this will encourage growth in the latter part of the year by charging U.S. viewers who share accounts with others. This approach has already yielded positive results in Canada, where the crackdown has resulted in increased paid memberships.⁶

Google

Alphabet Inc., the parent company of Google, posted impressive first-quarter earnings, primarily driven by a robust performance in search advertising. The company’s sales for the quarter reached $58.07 billion, exceeding the $56.98 billion average estimate of industry analysts. To combat the impact of reduced spending by advertisers, Alphabet has been implementing measures to reduce costs. In January, the company downsized its workforce by approximately 12,000 employees. Additionally, Alphabet has authorized share buybacks of up to $70 billion. The company’s shares have gained more than 17% since the beginning of the year.⁷

Alphabet’s Google Cloud also generated a profit for the first time in April. Although Google’s cloud unit is much smaller than competitors Microsoft and Amazon, it reported a profit of $191 million in Q1. As its core search advertising business matures, Google anticipates that growth will continue in its cloud services and become more critical to overall company revenue.⁸

Microsoft

Microsoft reported revenue of $52.86 billion, beating expectations of $51.02 billion. Net income was $18.3 billion (up 9%), while revenue grew 7% year-over-year. Microsoft’s cloud-based offerings, such as Azure and Office 365, continued attracting new customers with sales up 22% to $28.5 billion. Microsoft also plans to increase spending to reinforce its cloud data centers in response to the growing customer demand for new AI tools.⁹

It wasn’t all good news for Microsoft in April, however. UK antitrust regulators blocked Microsoft’s $69 billion purchase of Activision Blizzard, one of the world’s largest video game developers, over concerns the deal would threaten competition in cloud gaming. Despite Microsoft’s proposed remedies to ensure continued competition, such as deals to allow Activision Blizzard games such as “Call of Duty” and “Overwatch” to appear on rival cloud gaming platforms, the UK Competition and Markets Authority still felt the deal would make Microsoft (which already holds a 60%-70% global market share in cloud gaming) too dominant in the space and lead to “reduced innovation and less choice for UK gamers over the years to come.”¹⁰

While Microsoft and Activision Blizzard plan to appeal the ruling, even if they are successful the deal isn’t out of the woods yet. Both the US Federal Trade Commission and the European Union are evaluating the proposed takeover based on similar competition concerns.¹¹

Apple

And work continues on Apple’s long-rumoured mixed reality headset, which is reportedly set to debut at Apple’s Worldwide Developers’ Conference in June. Reporting in April suggests the mixed reality headset can switch between virtual reality (VR) and augmented reality (AR) and that the device will focus heavily on gaming, sports, and collaborative tools, as well as run Apple Fitness+ workouts in VR. Customers will be able to use “millions” of other existing apps on the headset’s 3D interface “with slight modifications” from developers.¹²

The device will also allow Apple to leverage its streaming rights for Major League Soccer and Major League Baseball by enabling “immersive sports viewing,” as well as “immersive video” which will let users watch videos in virtual environments like a desert or the sky.¹³

Investing in FANGMA: TECH ETF

It would be difficult to talk about today’s stock market without dealing in some way with one or more of the FANGMA tech giants. Odds are you use one (or more) of the advanced technologies or popular consumer services these six companies are responsible for—as do billions of other people each day. But high share prices may deter investors from adding all of these companies individually to a portfolio.

With the Evolve FANGMA Index ETF (TECH ETF), investors gain exposure to all six companies – Facebook, Amazon, Netflix, Google, Microsoft, and Apple – for a reasonable unit price.

For more information about the Evolve FANGMA Index ETF (TECH ETF) or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

Sources:

Dolan, M., “Mega tech stocks lure back investors for all seasons,” The Globe and Mail, April 28, 2023; https://www.theglobeandmail.com/investing/investment-ideas/article-mega-tech-stocks-lure-back-investors-for-all-seasons/
Vanian, J., “Meta shares pop 12% after company reports first sales increase in four quarters, issues optimistic guidance,” CNBC, April 26, 2023; https://www.cnbc.com/2023/04/26/facebook-meta-q1-earnings-report.html
Heath, A., “Mark Zuckerberg says Meta wants to ‘introduce AI agents to billions of people’,” The Verge, April 26, 2023; https://www.theverge.com/2023/4/26/23699633/mark-zuckerberg-meta-generative-ai-chatbots-instagram-facebook-whatsapp
Palmer, A., “Amazon stock dips as uncertain cloud outlook overshadows revenue beat,” CNBC, April 27, 2023; https://www.cnbc.com/2023/04/27/amazon-amzn-q1-earnings-report-2023.html
Day, M., “Amazon Joins Generative AI Race, Targets Tech at Cloud Customers,” BNN Bloomberg, April 13, 2023; https://www.bnnbloomberg.ca/amazon-joins-generative-ai-race-targets-tech-at-cloud-customers-1.1907298
Shaw, L., “Netflix Sees Stronger Second Half With Account-Sharing Curbs,” Bloomberg, April 18, 2023; https://www.bloomberg.com/news/articles/2023-04-18/netflix-gets-off-to-another-slow-start-with-disappointing-growth
Love, J., “Alphabet Shares Rise on Revenue Beat as Ad Sales Recover,” Bloomberg, April 25, 2023; https://www.bloomberg.com/news/articles/2023-04-25/alphabet-shares-rise-on-revenue-beat-as-ad-sales-recover
Love, J., “Alphabet Shares Rise on Revenue Beat as Ad Sales Recover,” Bloomberg, April 25, 2023; https://www.bloomberg.com/news/articles/2023-04-25/alphabet-shares-rise-on-revenue-beat-as-ad-sales-recover
Bass, D., “Microsoft Profit, Sales Top Estimates on Strong Cloud Demand,” Bloomberg, April 25, 2023; https://www.bloomberg.com/news/articles/2023-04-25/microsoft-profit-sales-top-estimates-as-cloud-growth-endures
Ziady, H., “UK blocks Microsoft takeover of Activision Blizzard,” CNN Business, April 26, 2023; https://www.cnn.com/2023/04/26/tech/microsoft-activision-blizzard/index.html
Ibid
Shanklin, W., “Latest Apple headset rumors say it’ll include VR workouts and sports,” Engadget, April 18, 2023; https://www.engadget.com/latest-apple-headset-rumors-say-itll-include-vr-workouts-and-sports-192316389.html
Gurman, M., “Apple’s AR/VR Headset to Feature Sports, Gaming, iPad Apps and Workouts,” Bloomberg, April 18, 2023; https://www.bloomberg.com/news/articles/2023-04-18/apple-vr-ar-headset-apps-sports-tv-fitness-gaming-wellness-ipad-features

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

HISA ETF rule changes could lead to lower rates, providers say

Posted on May 16, 2023February 16, 2024 by Veronica Carlasuc

Harness the Power of Broad-Based Investing for Long-Term Success

Posted on May 15, 2023May 30, 2023 by Veronica Carlasuc

Quite unexpectedly, some of the biggest big tech companies posted stronger-than-expected earnings last quarter, including Alphabet, Amazon, and Microsoft. And after the shake-ups in the U.S. banking sector earlier this year, with JPMorgan’s purchase of First Republic Bank in May, there is optimism that America’s banking sector is once again stabilizing.¹

All this has been good news for markets, which have benefitted from these surprisingly positive results. Despite the buoyancy of stock markets, however, the risk of a recession in North America within the next 12 months remains elevated according to many market watchers.²

That’s why now is a great time to consider your options for broad-based equity investing as a way to diversify your portfolio and help mitigate risk.

What is broad-based investing?

Broad-based investing is a strategy that provides investors with convenient, cost-effective access to the broader stock market as well as risk mitigation in the event of a market downturn.

The easiest way for most investors to implement a broad-based investing strategy is through index funds that track the performance of a large group of stocks or even the overall market. Investing through index funds offers investors the opportunity to diversify their portfolios, gain exposure to various sectors, and access the overall market’s performance.³

Index funds tend to provide cost-effective access to the broader stock market because they replicate the holdings of the underlying index and are an affordable way for investors to buy access to a variety of stocks in a convenient single index. If the average investor sought to buy shares of the dozens or hundreds of companies held in an index fund it would quickly prove cost-prohibitive.

And with so many stocks in an index fund, investors benefit from risk mitigation in the event of a market downturn. Because index fund holdings are so diversified, investors are less likely to experience significant losses due to the poor performance of one or two companies in the fund.

The cost-effectiveness and risk mitigation provided by broad-based index funds also makes them an attractive option for long-term investing.⁴

Which index funds are available?

The good news for investors is that there is a wide range of broad-based indices to choose from, depending on your goals and preferences as an investor.

Consider the S&P 500 as an example. The broad market represented by the S&P 500, comprised of the 500 leading U.S. companies, has actually risen an average of 1% during all recessionary periods since 1945. During the February 2020 to April 2020 recession caused by the pandemic, the S&P 500 initially fell 1.4% but rebounded to close the year up over 16% higher.⁵

So is it any wonder that one of the most popular indexes is the S&P 500 Index? The S&P 500 Index allows investors to gain exposure to a variety of sectors and industries by tracking the performance of the top 500 companies in the U.S. economy. Investors can access this index through investment vehicles like an exchange-traded fund (ETF).

For Canadian equity exposure, investors might choose an investment that tracks the S&P/TSX 60 Index. The S&P/TSX 60 Index is composed of the 60 largest companies listed on the Toronto Stock Exchange and offers investors exposure to nine different industries, including banking, basic materials, consumer goods, energy, and information technology.⁶

Why you should consider a covered call strategy?

While broad-based index funds offer some element of risk mitigation due to their diversification, investors looking for an additional strategy to protect their investments should also consider covered calls. Covered calls are all about lowering the volatility in your investments, which is particularly useful in the event of a market downturn. By adopting a covered call strategy, investors can generate yield from an equity index versus through sector- or stock-specific investing, while also benefitting from some downside protection.

In a covered call, investors can sell options on stocks they already own. They receive a premium from a buyer for the option, and if the stock price increases the buyer can purchase the stock at a lower agreed “strike price.” If the stock price decreases or the option expires, however, the seller keeps both the premium and the stock. This arrangement serves as a safeguard, helping to mitigate potential losses.

In such expired option scenarios, the investor can then sell another call option on the stock.

It’s important to note that higher levels of volatility in the market generally result in both increased premiums and greater potential upside for investors.⁷

One study found that over a 25-year period, covered calls on the S&P 500 outperformed the overall S&P 500, with a return of 830% on covered calls against returns of 807% in the S&P 500.⁸

Covered call investing with ESPX ETF and ETSX ETF

Looking for an investment solution that will keep you invested in stocks while offering the opportunity to take advantage of market volatility?

The Evolve S&P 500® Enhanced Yield Fund (ESPX ETF) is designed to provide investors with the performance of the S&P 500® Index, with the addition of enhanced yield through active covered call strategies on the underlying securities. This Fund invests primarily in the equity constituents of the S&P 500® Index, while writing covered call options on up to 33% of the portfolio.

Evolve’s S&P/TSX 60 Enhanced Yield Fund (ETSX ETF) is designed to provide investors with the performance of the S&P/TSX 60 Index, with the addition of enhanced yield through active covered call strategies on the underlying securities. This Fund invests primarily in the equity constituents of the S&P/TSX 60 Index, while writing covered call options on up to 33% of the portfolio.

Remember that the covered call options in both funds have the potential to provide extra income and help hedge long stock positions.

For more information on ESPX ETF or ETSX ETF respectively, visit our website at https://evolveetfs.com/ or watch this video.

And for more blogs like this, and for insight on investing and investment products, sign up for our weekly newsletter here.

Sources:

“FRC: First Republic Bank Taken Over by JP Morgan in Efforts to Stabilize Banking Sector,” TradingView, May 3, 2023; https://www.tradingview.com/news/tradingview:ca5a32b32094b:0/
Ristovski, D., “Canada is Likely to Come Out on Top, but the Risk of Recession Remains Elevated,” The Conference Board of Canada, April 21, 2023; https://www.conferenceboard.ca/insights/canada-is-likely-to-come-out-on-top-but-risk-of-recession-remains-elevated/
Kenton, W., “What Is a Broad-Based Index, and What Are Some Broad Index Funds?,” Investopedia, May 17, 2023; https://www.investopedia.com/terms/b/broad-basedindex.asp
Caplinger, D., “How to Invest in Index Funds,” The Motley Fool, April 21, 2023; https://www.fool.com/investing/how-to-invest/index-funds/
Klebnikov, S., “How Does The Market Perform During An Economic Recession? You May Be Surprised,” Forbes, June 2, 2022; https://www.forbes.com/sites/sergeiklebnikov/2022/06/02/heres-how-the-stock-market-performs-during-economic-recessions/
“S&P/TSX 60 Index,” TMX Money, May 19, 2023; https://money.tmx.com/en/quote/%5ETX60
Griebenow, N., “How to Position Your Income Portfolio For 2023 with Covered Calls,” Advisor Perspectives, December 13, 2022; https://www.advisorperspectives.com/commentaries/2022/12/13/how-to-position-your-income-portfolio-for-2023-with-covered-calls
“New Study Compares 25-Year Performance of Options Strategy Benchmarks to Traditional Indexes,” Cboe, February 14, 2012; https://ir.cboe.com/news-and-events/2012/02-14-2012/new-study-compares-25-year-performance-options-strategy-benchmarks-traditional-indexes

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Top 3 Biotech Stocks with Breakout Potential

Posted on May 12, 2023February 16, 2024 by Veronica Carlasuc

AI to Drive Innovation in a Post-Pandemic World

Posted on May 11, 2023December 18, 2023 by Veronica Carlasuc

No sooner had pandemic-induced disruptions begun to wane than generative AI debuted late last year and shook everything up once again. Those dual trends continued in April when a number of disruptive industries felt the benefit of both AI and the return to somewhat normal for the first time since the pandemic.

It’s clear that as we continue to return to normal post-pandemic, disruptive technologies will continue to transform the way we live, work, and interact with each other.

Updates on Specific Disruptive Industries

Doug Mills/New York — Source: Doug Mills/The New York Times

Automobile Innovation

In April, the Biden administration announced proposed regulations requiring a significant portion of new vehicles sold in the United States to be electric by 2032. The new regulations—one a tailpipe pollution limits for cars and the other rule aimed at heavy-duty vehicles—would mean 67% of new light-duty passenger vehicles, 46% of new medium-duty trucks, 50% of new buses, and 25% of new heavy trucks sold would be all-electric by 2032.

Although the Environmental Protection Agency (EPA) is not permitted by law to mandate that car manufacturers sell a specific number of electric vehicles (EVs), under the Clean Air Act the agency can limit the total pollution produced by all the vehicles each manufacturer sells. The regulations as proposed have been constructed to ensure that the companies can only be compliant with such a pollution cap by selling a certain percentage of zero-emissions EVs.¹

ChatGPT — Source: Shutterstock/Asciannio

Cybersecurity

The Cyberspace Administration of China (CAC) announced that generative AI services would need to undergo security reviews before they are permitted to operate in China. The CAC’s guidelines require AI content be accurately labelled, respect intellectual property, avoid discrimination, and not pose security risks. These regulations are expected to significantly impact how AI models are trained in China, with companies needing to prioritize security when developing AI. Additionally, the CAC’s emphasis on maintaining control over sensitive data highlights the importance of robust cybersecurity measures in protecting against cyberattacks and data breaches when developing AI.²

Cloud Computing

Amazon Web Services holds a sizeable lead in the global cloud infrastructure market, but it is adopting a different growth strategy from competitors. AWS is focused on becoming a “neutral platform” providing businesses access to generative AI products without tying them to a single model. AWS will sell access to language models on a new service called Bedrock, which will enable access to models by Anthropic, Stability AI and AI21 Labs, as well as Amazon’s own language model, Titan, which can be trained on a customer’s data and avoid mingling public and private data in model.³

E-Gaming

UK antitrust regulators blocked Microsoft’s $69 billion purchase of Activision Blizzard, one of the world’s largest video game developers, over concerns the deal would threaten competition in cloud gaming. Despite Microsoft’s proposed remedies to ensure continued competition, such as deals to allow Activision Blizzard games such as “Call of Duty” and “Overwatch” to appear on rival cloud gaming platforms, the UK Competition and Markets Authority still felt the deal would make Microsoft (which already holds a 60%-70% global market share in cloud gaming) too dominant in the space and lead to “reduced innovation and less choice for UK gamers over the years to come.”⁴

Genomics

World Healthcare Day was on April 7^th, and the World Economic Forum (WEF) highlighted eight trends shaping global healthcare today in the post-pandemic world.

Amongst them, the WEF noted that global healthcare spending grew more than 40% to $12 trillion between 2018 and 2022. Healthcare investments are also at all-time highs, with particular focus on gene immunotherapy and mRNA vaccines. The field has also benefitted from digital innovation and the use of big data and AI to aid in research and improved patient outcomes. Digital investment in the sector is now $57 billion, with growth seen particularly in telehealth and mental health. AI is being rolled out to assist in diagnosis, monitoring and treatment, improved medical imaging, and AI-assisted drug research and development.⁶

Fintech

Post-pandemic benefits are beginning to show themselves in the payments sector.

Visa Inc posted net income of $4.26 billion for their Q2, up from $3.65 billion a year earlier. Revenue was also up to $7.99 billion, beating projections of $7.80 billion and well ahead of the $7.19 billion from the same time last year.⁷ Likewise, MasterCard saw a 14% YoY increase in revenue for the quarter, coming in at $5.7 billion, just bettering analyst expectations of $5.6 billion.⁸

Both companies credited increased consumer spending, increased cross-border travel post-pandemic, as well as digital payment and value-added opportunities for their better-than-expected earnings. Mastercard said cross-border spending was up 35% over last year, while Visa saw a 24% increase in cross-border spending.⁹

Robotics and Automation — Source: Intuitive Surgical Inc

Robotics & Automation

Intuitive Surgical Inc reported Q1 revenue of $1.7 billion, up 14% from last year and beating analyst estimates of $1.6 billion. The number of total procedures performed with Intuitive Surgical’s Da Vinci and other robotic surgical systems grew by 26% YoY in Q1, well above estimates of 15%.

The better-than-expected results were credited to a widespread return of patients to in-person healthcare since the pandemic, as well as an increase in the number of hospitals using robotic-assisted procedures for minimally invasive surgeries.¹⁰

5G

Three years after the successful launch of consumer-facing 5G services, SoftBank Corp announced the launch of its “Private 5G” service for enterprises in Japan. SoftBank’s Private 5G is a managed 5G service that offers customization options based on the needs of specific clients, including companies, local governments, and other kinds of organizations.

Using “network slicing,” the Private 5G service can divide up its licensed spectrum to provide 5G connectivity to hyper-specific locations, from an entire municipality down to a specific factory floor, allowing clients to benefit from a stable, secure, high-performance 5G network wherever they need one.¹¹

EDGE ETF: Diversified Investing in Innovation

The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5G, fintech, genomics, and robotics & automation. Give your portfolio an EDGE.

EDGE ETF Portfolio Strategy and Activity

For the month, Intuitive Surgical Inc made the largest contribution to the Fund, followed by BeiGene Ltd, and Fiserv Inc., and Evolve Cyber Security Index Fund. On last rebalance, this security was added to the portfolio: Hologic Inc (Genomics), SoftBank Corp (5G), AT&T Inc (5G), and Broadridge Financial Solutions Inc (FinTech).

For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/.

To stay updated with insights on investing and related investment products, sign up for our weekly newsletter here.

Sources:

Davenport, C., “E.P.A. Lays Out Rules to Turbocharge Sales of Electric Cars and Trucks,” The New York Times, April 12, 2023; https://www.nytimes.com/2023/04/12/climate/biden-electric-cars-epa.html
“China Mandates Security Reviews for AI Services Like ChatGPT,” Bloomberg, April 11, 2023; https://www.bloomberg.com/news/articles/2023-04-11/china-to-mandate-security-reviews-for-new-chatgpt-like-services
Day, M., “Amazon Joins Generative AI Race, Targets Tech at Cloud Customers,” BNN Bloomberg, April 13, 2023; https://www.bnnbloomberg.ca/amazon-joins-generative-ai-race-targets-tech-at-cloud-customers-1.1907298
Ziady, H., “UK blocks Microsoft takeover of Activision Blizzard,” CNN Business, April 26, 2023; https://www.cnn.com/2023/04/26/tech/microsoft-activision-blizzard/index.html
Ibid
Bishen, S., “World Health Day: 8 trends shaping global healthcare,” World Economic Forum, April 5, 2023; https://www.weforum.org/agenda/2023/04/world-health-day-healthcare-trends/
Bary, E., “Visa earnings top expectations as payment volume rises 10% on travel rebound,” MarketWatch, April 26, 2023; https://www.marketwatch.com/story/visa-earnings-top-expectations-as-payment-volume-rises-10-aff5292c
English, C., “Mastercard Beat Shows Households Are Spending More on Travel. The Stock Rises.,” April 27, 2023; https://www.barrons.com/articles/mastercard-earnings-stock-price-bb6e0c4b
Ibid
Ferré, I., “Intuitive Surgical stock up 12% amid rise in procedures, return of patients to docs,” Yahoo Finance, April 19, 2023; https://ca.finance.yahoo.com/news/intuitive-surgical-stock-up-12-amid-rise-in-procedures-return-of-patients-to-docs-171456225.html
“SoftBank Corp. Launches Private 5G Service that’s Custom-built for Enterprises,” SoftBank Corp, April 18, 2023; https://www.softbank.jp/en/sbnews/entry/20230418_01

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Fighting hackers a potential growth industry for ETFs

Posted on May 9, 2023February 16, 2024 by Veronica Carlasuc

Canadian Companies Lost $500M in 2022 Due to Lax Cybersecurity

Posted on May 8, 2023December 18, 2023 by Veronica Carlasuc

A recent study by Mastercard found a significant increase in cybercrime and cyberattacks in Canada since the onset of the pandemic. The study highlighted a 600% surge in cybercrime and a 238% increase in cyberattacks that cost Canadian companies more than $500 million in 2022 alone.¹ Part of the increase was due to companies shifting operations online during the pandemic and, as a result, holding more sensitive data in their systems, making them tempting targets for cybercriminals.

Although large organizations usually have robust cybersecurity measures in place, the report cited the increased vulnerability of small businesses to attacks, given that they are often less prepared and, therefore, a more attractive target.

The report also discovered that the average cost of a data breach in Canada is $5.64 million, which is $1 million more than the global average. Almost all of the victims surveyed agreed that the hack impacted their business operations, with the most common outcome being the loss of customer data. Over a third of the respondents said cyberattacks strained their relationships with vendors or customers.

While 92% of business leaders acknowledge implementing security solutions or conducting a digital risk assessment, only 39% regularly engage in vulnerability assessments. Likewise, only 56% of companies use network firewalls, only 52% use 2FA, and less than half have antivirus software, fraud protection tools, or cybersecurity-specific insurance in place.²

Also in April, the Cyberspace Administration of China (CAC) announced that generative AI services would need to undergo security reviews before they are permitted to operate in China. The CAC’s guidelines require AI content be accurately labelled, respect intellectual property, avoid discrimination, and not pose security risks. These regulations are expected to significantly impact how AI models are trained in China, with companies needing to prioritize security when developing AI. Additionally, the CAC’s emphasis on maintaining control over sensitive data highlights the importance of robust cybersecurity measures in protecting against cyberattacks and data breaches when developing AI.³

Updates on Specific Cybersecurity Companies

CrowdStrike Holdings

In April, CrowdStrike Holdings announced what it says is the first purpose-built extended detection and response (XDR) cybersecurity product for the Internet of Things (IoT). The new product, Falcon Insight for IoT, promises to identify threats like ransomware on IoT devices but ensure simplified deployment and interoperability across IoT devices.⁴

Ubiquitous but hard to secure, IoT devices encompass everything from medical devices to industrial technology to networked consumer products like smart speakers. And the prevalence of IoT devices is only growing. Estimates of the compound annual growth rate (CAGR) for IoT through 2030 value the market anywhere between $220 billion and more than $500 billion.⁵ A new technology that enables customers to secure their IoT endpoints for the first time offers the possibility of significant future returns as the industry grows.

NEXTDC Limited

NEXTDC, an Australian cloud and data centre provider held by the Fund, had a good April, announcing that its contracted data centre utilization is up 35.9MW to 120MW (an increase of 43%) since the end of last year.

The company’s S3 data centre in suburban Sydney saw the most significant gains in customer contracts and is now operating at 46% of its planned capacity. NEXTDC is already planning for the future by securing land to construct its S5 data centre in the Macquarie Park suburb of Sydney. This facility, which will have a capacity of 60MW+ once built, is expected to contribute revenue beginning in late FY24 and be at capacity by FY29.⁶

With their focus on cybersecurity for infrastructure, and with hosting environments such as data centres now classified as ‘critical infrastructure’ under Commonwealth Government legislation, NEXTDC is partnering with global leaders in the physical safety and security of data centres like Gunnebo to ensure their facilities meet heightened compliance obligations for both physical security as well as cybersecurity.⁷

CYBR ETF: Diversified Investing in Cybersecurity

A cybersecurity ETF offers a great alternative to gaining exposure to this industry without being locked into any single security, and without the hassle of hand-picking individual stocks. ETFs allow you to diversify by investing in multiple companies in multiple markets, ensuring that a single market shock won’t tank your portfolio. Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR), invests in global companies involved in the cybersecurity industry.

CYBR ETF Portfolio Strategy and Activity

For the month, CACI International Inc made the largest contribution to the Fund, followed by NEXTDC Ltd and Booz Allen Hamilton Holding Corporation. The largest detractors to performance for the month were Zscaler Inc, followed by Okta Inc and CrowdStrike Holdings. On the last rebalance, these securities were added to the portfolio: Dream Security Co Ltd, Sands Lab Inc, Kape Technologies PLC, and VirnetX Holding Corporation.

For more information, visit the fund page here: https://evolveetfs.com/cybr/.

To stay updated with insights on investing and related investment products, sign up for our weekly newsletter here.

Sources:

“Securing the digital economy,” Mastercard, March 2023; https://www.mastercard.us/content/dam/public/mastercardcom/na/us/en/documents/Mastercard-NAM-Insights-Securing-the-digital-economy.pdf
“Small businesses at greatest risk during historic rise in cybercrime,” The Globe and Mail, April 5, 2023; https://www.theglobeandmail.com/business/adv/article-small-businesses-at-greatest-risk-during-historic-rise-in-cybercrime/
“China Mandates Security Reviews for AI Services Like ChatGPT,” Bloomberg, April 11, 2023; https://www.bloomberg.com/news/articles/2023-04-11/china-to-mandate-security-reviews-for-new-chatgpt-like-services
“CrowdStrike (CRWD) Launches Breakthrough XDR Solution for XIoT,” Yahoo Finance, April 12, 2023; https://finance.yahoo.com/news/crowdstrike-crwd-launches-breakthrough-xdr-132201670.html
Quast, J., “CrowdStrike Marches Ahead in This Multitrillion-Dollar Industry: What It Means for Investors,” The Motley Fool, April 17, 2023; https://www.fool.com/investing/2023/04/17/crowdstrike-marches-ahead-in-this-multi-trillion-d/
“NEXTDC Ltd (ASX:NXT) Announcement – Contracted Utilisation Update,” The Motley Fool, April 12, 2023; https://www.fool.com.au/tickers/asx-nxt/announcements/2023-04-12/2a1443040/contracted-utilisation-update/
“Data Sovereignty and Security Risk Management,” NEXTDC, n.d.; https://www.nextdc.com/about-us/security-risk-management

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

New US Regulations Will Boost Number of EVs Sold By 2032

Posted on May 5, 2023December 18, 2023 by Veronica Carlasuc

ev regulation — Source: Doug Mills/The New York Times

Also in April, future EV charging infrastructure in Canada got a big boost, with the Canada Infrastructure Bank announcing a loan of $220 million to Montreal-based Flo Services Inc. to expand its network of universal public fast charging ports.

The loan (the first from the bank’s $500 million fund for increasing EV charging and hydrogen refueling options for Canadian drivers) will enable Flo to install more than 2,000 charging ports at 400 sites nationwide. The installations will use Flo’s dual-port, 320-kilowatt chargers that can charge most EV batteries to 80% in 15 minutes.²

Updates on Specific EV Manufacturers

BYD Company Ltd

Chinese electric vehicle manufacturer BYD Co. posted sensational Q1 results in April. Net profits were up 410.9% to 4.13 billion yuan ($596.56 million) year-over-year, with revenue up 79.8% YoY to 120.17 billion yuan. As part of its earnings report, BYD Co. reported combined sales of 552,076 plug-in hybrids and pure electric cars in Q1, up more than 92% year-on-year. BYD Co. sold 1.86 million vehicles in all of 2022, mainly in China.³

Also in April, BYD Co. unveiled the BYD DiSus Intelligent Body Control System (DiSus System) at its Shenzhen headquarters. A new technology developed in-house by BYD, the DiSus System is an intelligent vehicle body control technology designed exclusively for new energy vehicles like plug-in hybrids and pure electric cars. It promises to improve the EV driving experience significantly.⁴

Canoo Inc

High-tech automotive startup Canoo Inc announced it had entered into a long-term lease agreement for its Vehicle Manufacturing Facility in Oklahoma City. Canoo’s agreement is for an initial 500,000 square feet of factory space, with the ability to expand across more than 120 acres. Canoo expects to initially employ more than 500 people in a full general and final vehicle assembly line, with a facility including state-of-the-art robotics, complete vehicle testing, and validation.⁵

Investing in Electric Vehicles with CARS ETF

The auto industry is undergoing the biggest transformation in our lifetimes and there is a growing demand for ways to invest in this industry.

The Evolve Automobile Innovation Index Fund (TSX Ticker: CARS), CARS ETF, is Canada’s first automobile innovation ETF. CARS ETF takes a diversified approach to investing in the development of electric cars, self-driving cars, and automobile innovation, including in some of the world’s leading manufacturers and automobile companies. CARS ETF is a simple way to gain access to the future of the automobile and shift your investments into gear.

CARS ETF Portfolio Strategy and Activity

For the month, Fisker Inc made the largest contribution to the Fund, followed by Canoo Inc and BYD Company Ltd. The largest detractors to performance for the month were Tesla Inc, followed by MaxLinear Inc and FuelCell Energy Inc. On the last rebalance, these securities were added to the portfolio: Sensata Technologies Holding PLC and Vitesco Technologies Group AG.

For more information on the Evolve Automobile Innovation Index Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact info@evolveetfs.com.

Sources:

Davenport, C., “E.P.A. Lays Out Rules to Turbocharge Sales of Electric Cars and Trucks,” The New York Times, April 12, 2023; https://www.nytimes.com/2023/04/12/climate/biden-electric-cars-epa.html
“Canada Infrastructure Bank earmarking $220M to expand EV charging network,” Global News, April 26, 2023; https://globalnews.ca/news/9653012/canada-ev-charging-network/
“Chinese EV giant BYD’s first-quarter profit jumps fivefold,” Reuters, April 27, 2023; https://www.reuters.com/business/autos-transportation/chinas-byd-posts-410-leap-first-quarter-profit-2023-04-27/
“BYD Reveals DiSus Intelligent Body Control System, Exclusively For New Energy Vehicles,” BYD, April 12, 2023; https://en.byd.com/news/byd-reveals-disus-intelligent-body-control-system-exclusively-for-new-energy-vehicles/
“Canoo Secures Oklahoma City Manufacturing Facility,” Canoo, April 10, 2023; https://investors.canoo.com/news-presentations/press-releases/detail/101/canoo-secures-oklahoma-city-manufacturing-facility

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Evolve Files Preliminary Prospectus for Canadian and U.S. Dollar Cash Management Solutions

Posted on May 4, 2023May 12, 2023 by Veronica Carlasuc

TORONTO, May 4, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve” or “the Manager“) is pleased to announce that it has filed a preliminary prospectus with the Canadian securities regulators with plans to bring two cash management solutions (“Evolve Funds“) to the Canadian market. The Premium Cash Management Fund (“MCAD“) and the US Premium Cash Management Fund (“MUSD“) are designed to provide investors with the ability to maximize current income, while at the same time preserving capital and maintaining liquidity, by investing primarily in Canadian dollar-denominated and U.S. dollar-denominated high-quality short term debt securities (with a term to maturity of 365 days or less), respectively.

“With North American interest rates at multi-decade highs, money market funds have become increasingly attractive,” says Raj Lala, President and CEO at Evolve ETFs. “As Evolve grows its platform to $6 billion in assets under management, these new money market funds will serve as an excellent complement to our existing high interest savings account funds.”

Premium Cash Management Fund

MCAD will invest primarily in Canadian dollar-denominated high-quality short term debt instruments such as treasury bills, bankers acceptances, bearer deposit notes, commercial paper (including asset-backed commercial paper), promissory notes, floating rate notes as well as other short term debt obligations of, or guaranteed by, the Canadian governments or their agencies, Canadian chartered banks, Canadian loan or trust companies or Canadian corporations.

US Premium Cash Management Fund

MUSD will invest primarily in U.S. dollar-denominated high-quality short term debt instruments such as treasury bills, bankers acceptances, bearer deposit notes, commercial paper (including asset-backed commercial paper), promissory notes, floating rate notes as well as other short term debt obligations of, or guaranteed by, the U.S. governments or their agencies, U.S. chartered banks, U.S. loan or trust companies or U.S. corporations.

The following chart sets out the ETF Units for each of the Evolve Funds:

Evolve Fund	ETF Units
Evolve Fund	Unhedged ETF Units (CAD$)	USD Unhedged ETF Units (USD$)
Premium Cash Management Fund	MCAD	–
US Premium Cash Management Fund	–	MUSD

About Evolve Funds Group Inc.

With over $5.9 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook

A preliminary prospectus containing important information relating to securities of the ETF has been filed with the securities commissions or similar authorities in all provinces and territories of Canada. The preliminary prospectus is still subject to completion or amendment. A copy of the preliminary prospectus is available on SEDAR (www.sedar.com). There will not be any sale or acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.

Commissions, management fees, expenses and applicable sales taxes all may be associated with an investment in the exchange traded funds managed by Evolve Funds Group Inc. (the “ETFs”). ETFs are not guaranteed, their values change frequently and past performance may not be repeated.

Evolve ETFs: info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884

MEDIA CONTACT: Keith Crone, kcrone@evolveetfs.com, 416.966.8716

RELATED LINK: https://www.newswire.ca/news-releases/evolve-files-preliminary-prospectus-for-canadian-and-u-s-dollar-cash-management-solutions-878065557.html

Bank Turmoil Continues as JP Morgan Buys First Republic

Posted on May 3, 2023December 18, 2023 by Veronica Carlasuc

The crisis of confidence experienced by the U.S. banking sector in March spilled over into April, with regulators seizing First Republic Bank and selling its assets at auction just days later.

JPMorgan Chase & Co landed the winning bid, agreeing to assume all of First Republic’s deposits while also repaying $25 billion of the $30 billion deposited by major banks in March to support First Republic. In addition, JPMorgan will pay the U.S. Federal Deposit Insurance Corp (FDIC) $10.6 billion for ownership of First Republic’s assets and wealthy clientele. First Republic’s 84 branches across eight states reopened as JPMorgan Chase Bank branches at the start of May.

First Republic was amongst the regional lenders hardest hit after March’s troubles saw depositors flee to the safety of big banks. Its collapse represents the largest U.S. bank failure since the 2008 financial crisis.¹

first republic bank — Source: Gettyimages

Ironically, the banking sector’s recent turmoil, which saw the collapse of Silicon Valley Bank, Signature Bank, and now First Republic, could be contributing to a surge in initial public offerings (IPOs).

Research firm Renaissance Capital reports that there have been 39 IPOs in the U.S. this year, up 77% from the previous year. This follows the low of 149 IPOs in 2022, down from 908 in 2021. Some analysts suggest that the tighter credit conditions resulting from the regional banking turmoil have forced companies needing cash to sell shares instead of seeking loans, as they might have done during more stable times.

As many as 1,000 companies worth over $1 billion are reportedly ready to go public but are waiting for more favourable economic conditions. With peak inflation potentially behind us, energy prices coming down, and mainland China’s economy recovering, we could see a flood of new IPOs as early as Q4 of 2023. The financial sector could potentially reap significant fees from facilitating these IPOs, suggesting the possibility of good times ahead for the industry.²

Updates on Specific Bank Stocks

Wells Fargo & Company

Wells Fargo benefited from higher interest rates in Q1, as its net interest income surged to $13.34 billion for the quarter, up 45% from the same time a year ago, beating analyst expectations.³

Also in April, Wells Fargo announced a ten-year strategic partnership with the T.D. Jakes Group that aims at “revitalizing neighbourhoods, fostering economic opportunity and creating long-term change in communities most in need.” In the coming decade, the venture could see as much as $1 billion in capital and financing from Wells Fargo for transforming communities around the United States.

The first project Wells Fargo will likely support is the revitalization of 100 acres of the historic former army base Fort McPherson, near downtown Atlanta. Plans include commercial and mixed-income residential space, green spaces, bike paths, recreation, and amenities.⁴

First Citizens Bank

The purchase and assumption of all deposits and loans from failed rival Silicon Valley Bank (SVB) are already yielding positive results for First Citizens Bank. In April, Flux Power Holdings, a developer of lithium-ion energy storage solutions for commercial and industrial equipment, renewed its $14.0 million revolving line of credit previously held under SVB with First Citizens Bank. Flux Power Holdings said credit availability was vital for meeting the working capital requirements spurred by growing customer demand.⁵

CALL ETF: Investing in U.S. Banks for Enhanced Yield

Looking for better yields from U.S. banks but with less risk?

Evolve’s U.S. banks ETF, the Evolve US Banks Enhanced Yield Fund (CALL ETF) offers investors a way to benefit from the positive fundamentals of the largest U.S. banks, with the added value of a covered call strategy applied on up to 33% of the portfolio. Covered call options have the potential to provide extra income and help hedge long stock positions. It’s your CALL to make.

For more information on CALL ETF, visit our website at https://evolveetfs.com/call/.

Portfolio Strategy and Activity

For the month, JPMorgan Chase & Co made the largest contribution to the Fund, followed by Wells Fargo Co and First Citizens BancShares Inc. The largest detractors to performance for the month were KeyCorp, followed by East West Bancorp Inc and U.S. Bancorp.

For more blogs like this, and for insights on investing and related investment products, sign up for our weekly newsletter here.

Sources:

Murdoch, S., Nishant, N., & Prentice, C., “Regulators seize First Republic Bank, sell assets to JPMorgan,” Reuters, May 1, 2023; https://www.reuters.com/business/finance/california-financial-regulator-takes-possession-first-republic-bank-2023-05-01/
Goodkind, N., “The banking crisis may have set the stage for an IPO comeback,” CNN Business, April 25, 2023; https://www.cnn.com/2023/04/25/investing/premarket-stocks-trading/index.html
Zainab Hussain, N., Saini, M. & Azhar, S., “Wells Fargo profit exceeds estimates as rising rates bolster income,” Reuters, April 14, 2023; https://www.reuters.com/business/finance/wells-fargo-profit-rises-higher-rates-bolster-interest-income-2023-04-14/
“Wells Fargo and T.D. Jakes Group Announce Ten-Year Strategic Partnership to Build Inclusive Communities,” Yahoo Finance, April 27, 2023; https://finance.yahoo.com/news/wells-fargo-t-d-jakes-130000086.html
“Flux Power Renews $14 Million Credit Facility with First Citizens Bank,” BusinessWire, April 27, 2023; https://www.businesswire.com/news/home/20230427005893/en/Flux-Power-Renews-14-Million-Credit-Facility-with-First-Citizens-Bank

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Expect More IPOs, Mergers and Acquisitions in the Healthcare Industry

Posted on May 1, 2023December 18, 2023 by Veronica Carlasuc

So far in 2023, mergers and acquisitions in the healthcare industry are up 62% year-over-year, to $119.6 billion, according to Refinitiv. Follow-on offers are also up 22% versus last year, and excitement is growing around the possibilities for large initial public offerings (IPOs) within the industry later this year.

In April, Johnson & Johnson announced plans to spinoff of its consumer business under the name Kenvue. The new company will include brands Tylenol, Band-Aid, Aveeno, Neutrogena, Listerine, and Johnson’s.

Filings indicate shares will be priced at $20 to $23 in an IPO set to take place later this year, meaning the spinoff company would have a roughly $40 billion value. That would make it the largest IPO of the year so far.¹

And with World Healthcare Day happening on April 7^th, the World Economic Forum (WEF) highlighted eight trends shaping global healthcare today. While the WEF found widening inequalities, healthcare worker shortages and burnout, and increased mental health challenges were prevalent worldwide (and especially in low- and middle-income countries) in the aftermath of the pandemic, the report also cited several reasons for optimism.

According to the WEF, global healthcare spending grew more than 40% to $12 trillion between 2018 and 2022. Healthcare investments are also at all-time highs, with particular focus on gene immunotherapy and mRNA vaccines.

The field has also benefitted from digital innovation and the use of big data and AI to aid in research and improved patient outcomes. Digital investment in the sector is now $57 billion, with growth seen particularly in telehealth and mental health. AI is being rolled out to assist in diagnosis, monitoring and treatment, improved medical imaging, and AI-assisted drug research and development.²

Updates on Specific Healthcare Companies

Merck & Co

Merck & Co. is taking steps to enhance its research pipeline with its most lucrative cancer drug, Keytruda, set to lose patent protection later this decade. Merck & Co. announced in April that it will buy Prometheus Biosciences and its portfolio of drugs for $10.8 billion.

The agreement is one of the largest deals in the pharma sector in recent years and promises to contribute revenue for Merck once Keytruda’s patent expires. The deal gives Merck access to promising new autoimmune drugs in Prometheus’ pipeline, including a monoclonal antibody treatment for inflammatory bowel disease that has already shown positive results in clinical trials.³

Novartis AG

In its April earnings report, Novartis raised its full-year earnings outlook following cost cuts and success in clinical trials of its breast cancer drug and radiotherapy drug against prostate cancer. Q1 group sales rose 3% to $12.95 billion, beating analyst predictions of $12.6 billion. Novartis now expects its core operating income will grow by a “high single digit to low double digit” percentage for the year, up from earlier forecasts of a “mid-to-high single digit.”⁴

Novartis also announced that its planned spinoff of generic drug division Sandoz is still on track for the second half of 2023.⁵ Novartis plans to spin off Sandoz into a new publicly traded standalone company to create Europe’s leading generics and biosimilars company. This move will allow both Sandoz and Novartis shareholders to potentially benefit from future growth. The two companies will pursue separate growth strategies, with Sandoz having access to a pipeline of more than 15 biosimilars molecules, while Novartis focuses on developing innovative medicines and improving its financial profile and capital returns.⁶

LIFE ETF: Investing in Global Healthcare

Investing in ETFs can be one way to add cutting-edge healthcare to your portfolio.

Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip companies in the healthcare industry, with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

LIFE ETF Portfolio Strategy and Activity

For the month, Eli Lilly & Co. made the largest contribution to the Fund, followed by Medtronic and Novartis AG. The largest detractors to performance for the month were Danaher Corporation, followed by AbbVie Inc and Pfizer Inc. On last rebalance, one security was added to the portfolio: Intuitive Surgical, Inc.

For more blogs like this, and for insights on investing and related investment products, sign up for our weekly newsletter here.

Sources:

Goodkind, N., “The banking crisis may have set the stage for an IPO comeback,” CNN Business, April 25, 2023; https://www.cnn.com/2023/04/25/investing/premarket-stocks-trading/index.html
Bishen, S., “World Health Day: 8 trends shaping global healthcare,” World Economic Forum, April 5, 2023; https://www.weforum.org/agenda/2023/04/world-health-day-healthcare-trends/
Krasny, R., Mello, G. & Brown, K., “Merck to Cushion Patent Loss With Prometheus Acquisition,” Bloomberg, April 16, 2023; https://www.bloomberg.com/news/articles/2023-04-16/merck-agrees-to-buy-prometheus-for-200-per-share-in-cash
Burger, L., “Novartis, helped by cost cuts, raises full-year outlook,” Reuters, April 25, 2023; https://www.reuters.com/business/healthcare-pharmaceuticals/novartis-lifts-full-year-earnings-outlook-2023-04-25/
“Novartis delivers strong sales growth, robust margin expansion and major innovation milestones. Raises FY guidance,” Sandoz, April 25, 2023; https://www.sandoz.com/news/media-releases/novartis-delivers-strong-sales-growth-robust-margin-expansion-and-major-innovation-milestones-raises-fy-guidance
“Novartis announces intention to separate Sandoz business to create a standalone company by way of a 100% spin-off,” Novartis, August 25, 2022; https://www.novartis.com/news/media-releases/novartis-announces-intention-separate-sandoz-business-create-standalone-company-way-100-spin

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cloud and AI Help Microsoft, Alphabet, and Amazon Beat Forecasts

Posted on April 30, 2023May 1, 2023 by Veronica Carlasuc

It’s been an exciting quarter for the tech world as three of the biggest players, Microsoft, Alphabet, and Amazon, all surprised market watchers with stronger-than-expected earnings results. After a post-pandemic slump, these tech giants look to be bouncing back.

One common theme that emerged from their quarterly reports is the growing importance of cloud computing to businesses today. Cloud-based services are fast becoming the go-to solution for companies looking to stay competitive and streamline their operations. Indeed, all three companies attributed much of their growth to the continued rise of artificial intelligence applications, like ChatGPT, and the corresponding demand for cloud-based computing power.

With AI set to become even more ubiquitous in online life, Microsoft, Alphabet, and Amazon are all betting on this technology to fuel new growth for their cloud services and revenue for their companies.

Microsoft, Alphabet, and Amazon beat forecasts with strong Q1 earnings

All three tech giants surprised market watchers with stronger-than-expected quarterly results.

Microsoft exceeded expectations for its top and bottom lines, reporting revenue of $52.86 billion, surpassing analysts’ quarterly expectations of $51.02 billion. Net income was up 9% from a year ago to $18.3 billion, while revenue grew 7% year-over-year. Various segments of the company performed well during the quarter, with a 14% increase in revenue from commercial Office 365 productivity software subscriptions credited to growth in revenue per user.¹

Alphabet Inc., the parent company of Google, reported better-than-expected first-quarter results off the back of strong search advertising performance. The company’s sales, not including partner payouts, were $58.07 billion, surpassing analysts’ average estimate of $56.98 billion. To maintain the company’s profit margins as advertisers reduce spending, Alphabet has been implementing cost-cutting measures. In January, the company reduced its headcount by approximately 12,000 employees. In addition, Alphabet has authorized share buybacks of up to $70 billion. So far this year, Alphabet’s stock has gained more than 17%.²

Amazon.com Inc. also showed a stronger-than-expected quarterly profit, attributing its success to cost-cutting measures and robust sales in its cloud-computing division. The company’s revenue was $127.4 billion, a 9.4% increase from the previous year and beating expectations of $124.7 billion. Operating income stood at $4.8 billion, surpassing the projected $3 billion set by analysts. Amazon has been taking steps to adjust to slowing sales growth in both online shopping and its Amazon Web Services division. These measures include reducing its headcount by approximately 27,000 jobs over the past year. Despite this, the company’s expenses increased at the slowest rate in a decade, demonstrating its continued resilience in the face of challenging economic conditions.³

What’s notable in these better-than-expected earnings reports was the contribution made by cloud services and AI technology for all three companies.

Clouds with silver linings

The importance of cloud computing to today’s businesses—providers and customers alike—was reinforced by the quarterly results of Microsoft, Alphabet, and Amazon.

Microsoft’s Intelligent Cloud business segment saw a revenue increase of 16%, landing at $22.08 billion for the quarter, beating estimates of $21.94 billion.⁴ Despite a challenging economic climate leading to many customers cutting back on spending, Microsoft’s cloud-based offerings, such as Azure and Office 365, continued attracting new customers. Sales from these commercial cloud products were up 22% to reach $28.5 billion. Microsoft also said it would increase its spending to reinforce its cloud data centers in response to the growing customer demand for new AI tools.⁵

Alphabet’s Google Cloud has likewise weathered recent economic uncertainty to turn a profit for the first time. While Alphabet’s cloud unit is far smaller than those of Microsoft and Amazon, it reported profits of $191 million in Q1, with Google indicating that as its core search advertising business matures, the company expects growth from its cloud offerings.⁶

Amazon Web Services, AWS, a key profit center for Amazon since 2014, also offered stronger-than-expected performance in the first quarter. The cloud unit saw revenue growth of 16% in Q1, with AWS bringing in $21.35 billion, accounting for nearly 17% of Amazon’s overall revenue for the quarter. While facing increased competition from companies like Alibaba, Alphabet, and Microsoft, Amazon still maintains a sizeable lead in the global cloud infrastructure market.⁷

AI pointing the way to future revenue growth

A big part of the growth of cloud during this past quarter was the continuing transformation of the economy by the rise of artificial intelligence applications like ChatGPT and the demands for cloud-based computing power by such programs. As AI integrates into more and more aspects of online life, Microsoft, Alphabet, and Amazon have all indicated that AI is a path to new growth for their cloud services.

Microsoft, for example, has unveiled a number of AI-based products and features in recent months as part of a strategy to boost sales of Azure, search ads and office-productivity programs. One such move was integrating OpenAI’s technology into Microsoft’s search engine Bing, providing new AI chatbot functionality to its internet search. Microsoft’s More Personal Computing segment, which includes its Bing search engine, generated $13.26 billion in revenue in Q1, surpassing consensus estimates of $12.25 billion. The newly AI-enhanced Bing now has over 100 million daily active users for the first time.⁸

Amazon’s AWS, on the other hand, is pursuing a strategy of targeting corporate customers. AWS intends to be a “neutral platform” for businesses that want to incorporate generative AI into products without being tied to a single provider. As a result, AWS is selling access to a variety of large language models, including ones by Anthropic, Stability AI, and AI21 Labs. AWS also has its own language model, Titan, which be trained on a customer’s data to write targeted blogs and emails while avoiding any concerns about the sharing or mingling of private data in the training of public models.⁹

And Google, whose business faces the most potential for disruption by AI-powered chatbot web search, is also keen to incorporate AI into its offerings. Google has recently begun selling access to its largest AI program, the Pathways Language Model, for use by developers using the company’s cloud services. Already, Anthropic, a rival company to OpenAI, has made Google’s cloud its preferred service provider, agreeing to a multiyear cloud deal worth $900 million.¹⁰

Investing in six technology giants in one investment solution

Big tech companies have transformed our world, serving as significant drivers of growth and return for our markets. Currently, high share prices may deter investors from adding all of these companies individually to a portfolio. With the Evolve FANGMA Index ETF (TECH ETF) investors get exposure to all six technology giants – Facebook (Meta), Amazon, Netflix, Google, Microsoft, and Apple – for a reasonable unit price. For more information on TECH ETF, visit the fund page here: https://evolveetfs.com/tech/.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

Bass, D., “Microsoft Profit, Sales Top Estimates on Strong Cloud Demand,” Bloomberg, April 25, 2023; https://www.bloomberg.com/news/articles/2023-04-25/microsoft-profit-sales-top-estimates-as-cloud-growth-endures
Love, J., “Alphabet Shares Rise on Revenue Beat as Ad Sales Recover,” Bloomberg, April 25, 2023; https://www.bloomberg.com/news/articles/2023-04-25/alphabet-shares-rise-on-revenue-beat-as-ad-sales-recover
Palmer, A., “Amazon stock dips as uncertain cloud outlook overshadows revenue beat,” CNBC, April 27, 2023; https://www.cnbc.com/2023/04/27/amazon-amzn-q1-earnings-report-2023.html
Novet, J., “Microsoft reports earnings beat, says A.I. will drive revenue growth,” CNBC, April 25, 2023; https://www.cnbc.com/2023/04/25/microsoft-msft-q3-earnings-report-2023.html
Bass, D., “Microsoft Profit, Sales Top Estimates on Strong Cloud Demand,” Bloomberg, April 25, 2023; https://www.bloomberg.com/news/articles/2023-04-25/microsoft-profit-sales-top-estimates-as-cloud-growth-endures
Love, J., “Alphabet Shares Rise on Revenue Beat as Ad Sales Recover,” Bloomberg, April 25, 2023; https://www.bloomberg.com/news/articles/2023-04-25/alphabet-shares-rise-on-revenue-beat-as-ad-sales-recover
Novet, J., “Amazon’s 18% cloud revenue growth impresses even as margin narrows,” CNBC, April 27, 2023; https://www.cnbc.com/2023/04/27/aws-q1-earnings-report-2023.html
Novet, J., “Microsoft reports earnings beat, says A.I. will drive revenue growth,” CNBC, April 25, 2023; https://www.cnbc.com/2023/04/25/microsoft-msft-q3-earnings-report-2023.html
Dotan, T. & Kruppa, “Microsoft, Google, Amazon Look to Generative AI to Lift Cloud Businesses,” The Wall Street Journal, March 27, 2023; https://www.wsj.com/articles/microsoft-google-amazon-look-to-generative-ai-to-lift-cloud-businesses-7159a43f
Ibid

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Why optimism is building again in cryptocurrency

Posted on April 26, 2023April 28, 2023 by Veronica Carlasuc

Looking at the current state of the cryptocurrency market, there are reasons for optimism.

While the cryptocurrency industry may have experienced challenges and setbacks over the last year, there are already signs of a rebound and maturation in the sector. Crypto’s winter of discontent may be coming to an end.

One positive sign in cryptocurrency’s favour is the increase in the total value of coins locked into decentralized finance (DeFi) projects. Since the beginning of January, DeFi holdings have risen more than 25% and now sit at approximately $50 billion.¹ While lower than the $180 billion peak of December 2021, renewed growth in DeFi suggests a newfound maturity within the industry and a preference for quality over quantity.

Couple this with the growing value of Bitcoin and Ether since the start of this year, along with network upgrades and changing macroeconomic conditions, and there is reason for an optimistic outlook for the cryptocurrency sector.

Bitcoin and Ether rally in Q1

Data from the first quarter of 2023 reveals that Bitcoin’s return on investment (ROI) was 170.32% more than five major stock indexes. Bitcoin delivered returns of 69.4% during the quarter, while the average returns for the five indexes—the NASDAQ Composite, S&P 500, US Small Cap 2000, FTSE 100, and the Dow Jones Industrial Average—was only 5.5%.² All told, Bitcoin has already gained 84% in value this year.³

Ether, the second largest cryptocurrency, is also rebounding thanks in part to a successful network upgrade known as the Shanghai update. This update (the biggest change to a smart contract platform in the crypto industry since the Ethereum Merge of September 2022) allows investors to withdraw up to $36.4 billion in Ether coins that were locked up in exchange for rewards as part of a “proof-of-stake” system designed to protect the network.⁴ This development has the potential to attract billions of dollars into Ether, leading to a rise in its price above $2,100 in April, a level not seen since May 2022. Ether, which outperformed Bitcoin in both 2020 and 2021, has already gained 75% in value this year.⁵

What is noteworthy in each case is that while Bitcoin and Ether have seen significant appreciation in value, newer cryptocurrencies have not experienced the same level of growth.

Bitcoin’s first-mover advantage has always meant it had an advantage over its competitors. As the backbone of the digital asset ecosystem, the strength of the Bitcoin network means it faces less downside risk overall. And as the second most-established digital coin (and one with lots of room to grow relative to Bitcoin) Ether is likewise trusted due to its longevity in the market.

This preference for Bitcoin and Ether could indicate that investors are seeking quality and reliability in the cryptocurrency space, preferring the most established digital coins as investment returns to this asset class.⁶

Economic upheaval a boon for cryptocurrency

Why are cryptocurrencies seeing a resurgence now? Some macroeconomic factors are at play.

The fallout from recent bank collapses is one such reason. The failure of crypto-friendly banks, such as Silvergate Capital Corp., Signature Bank, and Silicon Valley Bank, has highlighted one of the primary purposes of cryptocurrency: as a hedge against the conventional banking system and fiat currency. Although these banks failed for other reasons, their unexpected collapse reminded investors of the potential benefits of using cryptocurrencies. As a result, cryptocurrency may once again become an attractive alternative to centralized financial systems in the eyes of investors.⁷

Another encouraging sign for investors is how traditional financial institutions have stepped in to fill the gap created by the loss of crypto-friendly banks. Nasdaq Inc., for example, plans to launch its digital asset custody services by the end of Q2.⁸

Recent decisions on interest rates in the United States and other advanced economies have also made cryptocurrency more attractive. After more than a year of rate hikes, the possibility that the U.S. Federal Reserve and other central banks might slow or halt the tightening of rates is in sight as inflation moderates. With the potential for borrowing costs to level off or begin to ease in the near future, crypto investment may begin to make sense again for more investors.⁹

Investing in Cryptocurrency with ETFs

Deciding which cryptocurrency to own and how much to allocate can be overwhelming for many investors.

Evolve’s Bitcoin ETF (EBIT ETF) is one of the world’s first bitcoin ETFs and provides investors with a simple and efficient way to access the price of Bitcoin through a secure investment solution. For more information on this fund, visit https://evolveetfs.com/ebit/.

Evolve’s Ether ETF (ETHR ETF) is the world’s first Ether ETF and offers a great way for investors to access the price of Ether through a secure investment solution. For more information on this fund, visit https://evolveetfs.com/ethr/.

For a more diversified cryptocurrency investment solution, the Evolve Cryptocurrencies ETF (ETC ETF) is Canada’s first multi-crypto ETF. ETC ETF is designed to be a one ticket solution to cryptocurrency exposure. It is market cap weighted and rebalanced monthly. It currently holds Bitcoin (TSX: EBIT) and Ether (TSX: ETHR) but as regulators approve other crypto ETFs, they may be added as well. For more information on this fund, visit https://evolveetfs.com/etc/.

To stay updated with insights on investing in cryptocurrency and related investment products, sign up for our weekly newsletter here.

Sources:

Regan, M. & Irrera, A., “Bitcoin Surged Past $30,000. Is Another Crypto Boom on the Way?,” Bloomberg, April 15, 2023; https://www.bloomberg.com/news/articles/2023-04-15/is-bitcoin-s-btc-rally-to-30-000-the-start-of-a-new-crypto-boom
Baltrusaitis, J., “Bitcoin outperforms top five major indexes by 170% in Q1, 2023,” Finbold, April 6, 2023; https://finbold.com/bitcoin-vs-indexes-q1-2023/
Regan, M. & Irrera, A., “Bitcoin Surged Past $30,000. Is Another Crypto Boom on the Way?,” Bloomberg, April 15, 2023; https://www.bloomberg.com/news/articles/2023-04-15/is-bitcoin-s-btc-rally-to-30-000-the-start-of-a-new-crypto-boom
ibid
Macheel, T., “Ether rises above $2,000 after the Shanghai upgrade, bringing year-to-date gain to more than 75%,” CNBC, April 13, 2023; https://www.cnbc.com/2023/04/13/ether-rises-after-the-shanghai-upgrade-bringing-year-to-date-gain-to-more-than-65percent.html
Regan, M. & Irrera, A., “Bitcoin Surged Past $30,000. Is Another Crypto Boom on the Way?,” Bloomberg, April 15, 2023; https://www.bloomberg.com/news/articles/2023-04-15/is-bitcoin-s-btc-rally-to-30-000-the-start-of-a-new-crypto-boom
Baltrusaitis, J., “Bitcoin outperforms top five major indexes by 170% in Q1, 2023,” Finbold, April 6, 2023; https://finbold.com/bitcoin-vs-indexes-q1-2023/
Regan, M. & Irrera, A., “Bitcoin Surged Past $30,000. Is Another Crypto Boom on the Way?,” Bloomberg, April 15, 2023; https://www.bloomberg.com/news/articles/2023-04-15/is-bitcoin-s-btc-rally-to-30-000-the-start-of-a-new-crypto-boom
Baltrusaitis, J., “Bitcoin outperforms top five major indexes by 170% in Q1, 2023,” Finbold, April 6, 2023; https://finbold.com/bitcoin-vs-indexes-q1-2023/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How investors should play the metaverse as the focus shifts to generative AI

Posted on April 20, 2023February 16, 2024 by Veronica Carlasuc

AI, Easily the Most Disruptive Technology Across Industries

Posted on April 20, 2023December 18, 2023 by Veronica Carlasuc

It’s AI’s world and we’re just living in it. With the focus on innovative and disruptive trends across a broad range of industries, it’s clear from this month’s news that artificial intelligence and generative AI like ChatGPT is currently the most disruptive technology out there. With new applications for AI and large language models being found every day, it’s clear we’re at the start of virtually every sector of the economy being disrupted and fundamentally reshaped by the power and promise of AI.

Automobile Innovation

The Global Artificial Intelligence for Automotive Market Research Report 2023, released by QY Research in March, pegged the value of the global automotive AI market at $1.95 billion USD in 2022 and projected that the market will surpass $13.3 billion USD by 2032, representing a CAGR of 24.75% from now through 2032.¹

Redwood Materials announced the results of its first study to find safe, efficient, and effective recycling strategies for EV battery packs. Their pilot project resulted in a greater than 95% recovery rate for EV battery elements, including lithium, cobalt, nickel, copper, and other key metals from 500,000 pounds of end-of-life batteries. Such recycling technology holds the potential to dramatically reduce the cost of key components in EV batteries and lessen the reliance on foreign sources of raw materials.²

Cybersecurity

Microsoft announced Microsoft Security Copilot, an AI-powered chatbot designed to assist cybersecurity professionals in understanding and resolving critical security issues. The chatbot draws on GPT-4, the latest large language model from OpenAI, combined with a security-specific model built by Microsoft. Microsoft engineers tested the chatbot internally and showed promising results in processing alerts and providing relevant insights quickly. If Microsoft were to require the use of Sentinel or other Microsoft products in order to use Security Copilot it could influence purchasing decisions in favour of Security Copilot, even if other companies develop their own AI cybersecurity chatbots.³

data — Source: Ai-techpark.com/midjourneyselectsgooglecloud

Cloud Computing

Google Cloud announced a partnership with Midjourney to help power that company’s AI-powered visual imagery tool and natural language interface with Google Cloud’s custom AI accelerators.⁴ Google also announced a new program called Built with Google Cloud AI, tailored to the needs of startups building with generative AI. Built with Google Cloud AI will provide select partners with access to Google Cloud engineering teams who can help design and optimize their applications to run as-a-service on Google Cloud infrastructure as well as training and co-marketing support as they bring their products to market.⁵

E-Gaming

After its split with Blizzard, NetEase Ltd announced they expect to see returns from their overseas investments in gaming studios within the next two to three years, and the company aims to be involved in a quarter of all AAA premium titles in the global market and generate half of its gaming sales from outside China within the next five years. NetEase aims to position itself as a distinct alternative to Tencent, with a strong focus on game creation and a willingness to take risks. In addition to its game development efforts, NetEase plans to embed its own AI chatbot into games, starting with the upcoming mobile release of Justice in June. This move aims to create more realistic non-player characters and reduce production costs in the long run.⁶

Genomics

Researchers announced the development of an AI-based system called DeepGlioma that can screen for genetic mutations in cancerous brain tumours in less than 90 seconds, according to a study published in Nature Medicine.

The system, developed by a team of neurosurgeons and engineers at Michigan Medicine in collaboration with other institutions, uses rapid imaging to analyze tumour specimens and detect their genetic mutations in real time with an average accuracy of over 90%. Molecular classification is crucial for diagnosing and treating gliomas—the most common and deadly primary brain tumour—but access to molecular testing is limited, with results sometimes taking weeks. The speed and accuracy of DeepGlioma provides an opportunity for increased early enrollment in clinical trials for glioma patients. Currently, less than 10% of patients with glioma enter clinical trials, which are often restricted by the molecular subgroups that DeepGlioma can so quickly determine.⁷

Fintech

Bloomberg announced the launch of BloombergGPT, a large language model (LLM) with a 50-billion parameter capacity. Designed exclusively for the financial sector, BloombergGPT has been built from the ground up to incorporate the unique and complex terminology of the financial industry.

Leveraging a vast archive of financial data from Bloomberg, this purpose-built LLM has undergone specialized training for tasks specific to finance. In fact, Bloomberg boasts that BloombergGPT outperforms other similarly sized open models in financial NLP tasks by significant margins, without compromising its performance on general LLM benchmarks.⁸

With the cost of custom GPT applications dropping dramatically just since late 2022 (Stanford’s Alpaca AI was built using open-source software and language models for less than $600 US and has performance comparable to ChatGPT, which cost millions to develop)⁹ expect to see LLM and NLP’s adoption across the fintech sector pick up speed in coming months.

Robotics & Automation

A team of researchers has harnessed the power of functional magnetic resonance imaging (fMRI) in conjunction with an AI image-generator to decipher human brain scans and determine what a person is mentally picturing.

Using fMRI scans taken while participants viewed over 1,000 images, an AI model sifted through the data to identify specific brain patterns associated with particular images. When participants were presented with new images during fMRI scans, the system successfully detected the corresponding brain waves, generated a summary of its interpretation, and employed the AI image-generator to approximate the image the participant perceived. The generated image displayed attributes such as colour, shape, and meaning that matched the original image with approximately 84% accuracy. Although the current experiment requires training the AI model on roughly 20 hours of each participant’s unique brain activity, researchers see this amount of time coming down dramatically over the next decade, making the potential widespread application of this technology accessible anywhere.¹⁰

5G

At Nvidia’s annual developer conference in March, there were numerous panels on the intersection of AI and 5G wireless technology. A number of sessions focused on AI’s potential to transform radio access networks (RANs) and virtualized RANs (vRANs) to help providers deliver better performance and efficiency and derive higher revenue from their RANs, as well as AI’s ability to help provide digital twins for wireless networks that will help spur innovation. Other sessions looked at how scalable 5G software that incorporates AI applications are increasingly in demand by enterprise customers and offer the potential to drive new service and innovations across 5G networks.¹¹

According to GSMA Intelligence, global 5G connections are expected to double in the next two years, driven by technological advances and new 5G network deployments in over 30 countries. Currently, there are 229 commercial 5G networks globally and over 700 5G smartphone models.

The growth of 5G will be driven by key markets in Asia-Pacific and Latin America, including India and Brazil. For example, GSMA Intelligence says that by the end of 2025, there will be four 5G networks in India, adding 145 million additional users. Expansion into sub-Saharan Africa, such as Ethiopia and Ghana, will also spur the growth of 5G markets. From the existing 1% adoption of 5G in those regions, collaboration between government and industry is expected to expand access to 4% by 2025 and 16% by 2030. Overall, 5G is experiencing the fastest roll-out compared to 3G and 4G wireless.¹²

Investing in Innovation with EDGE ETF

The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5G, fintech, genomics, and robotics & automation. Give your portfolio an EDGE.

EDGE ETF Portfolio Strategy and Activity

For the month, Evolve Cloud Computing Index Fund (DATA ETF) made the largest contribution to the Fund, followed by Evolve E-Gaming Index ETF (HERO ETF), and Evolve Cyber Security Index Fund (CYBR ETF). On the last rebalance, this security was added to the portfolio: BeiGene Ltd (Genomics).

For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/.

To stay updated with insights on investing and related investment products, sign up for our weekly newsletter here.

Sources:

“Artificial Intelligence for Automotive Market 2023 Latest Trends and Growth Analysis- AImotive, Argo AI, Astute Solutions,” Digital Journal, March 30, 2023; https://www.digitaljournal.com/pr/news/artificial-intelligence-for-automotive-market-2023-latest-trends-and-growth-analysis-aimotive-argo-ai-astute-solutions
“One Year Update: Redwood’s California EV Battery Recycling Program,” Redwood Materials, March 2, 2023; https://www.redwoodmaterials.com/news/update-california-ev-battery-recycling-program/
Novet, J., “Microsoft introduces an A.I. chatbot for cybersecurity experts,” CNBC, March 28, 2023; https://www.cnbc.com/2023/03/28/microsoft-launches-security-copilot-in-private-preview.html
“Midjourney Selects Google Cloud to Power AI-Generated Creative Platform,” PR Newswire, March 14, 2023; https://www.prnewswire.com/news-releases/midjourney-selects-google-cloud-to-power-ai-generated-creative-platform-301771558.html
Ichhpurani, K., “Building the most open and innovative AI ecosystem,” Google Cloud, March 14, 2023; https://cloud.google.com/blog/products/ai-machine-learning/building-an-open-generative-ai-partner-ecosystem
Huang, Z., & D’Anastasio, C., “Life After ‘World of Warcraft’ Starts with NetEase Searching for Its Own Hits,” Bloomberg, March 29, 2023; https://www.bloomberg.com/news/articles/2023-03-29/life-after-warcraft-starts-with-netease-searching-for-own-hits
Fromson, N., “AI Predicts Genetics of Brain Cancers in Less Than 90 Seconds,” Technology Networks, March 24, 2023; https://www.technologynetworks.com/cancer-research/news/ai-predicts-genetics-of-brain-cancers-in-less-than-90-seconds-371471
“Introducing BloombergGPT, Bloomberg’s 50-billion parameter large language model, purpose-built from scratch for finance,” Bloomberg, March 30, 2023; https://www.bloomberg.com/company/press/bloomberggpt-50-billion-parameter-llm-tuned-finance/
Blain, L., “The genie escapes: Stanford copies the ChatGPT AI for less than $600,” New Atlas, March 19, 2023; https://newatlas.com/technology/stanford-alpaca-cheap-gpt/
Ruberg, S. & Ward, J., “From brain waves, this AI can sketch what you’re picturing,” NBC News, March 25, 2023; https://www.nbcnews.com/tech/tech-news/brain-waves-ai-can-sketch-picturing-rcna76096
Penrose, C., “How AI Is Shaping a New Era of Connectivity,” Nvidia, March 14, 2023; https://blogs.nvidia.com/blog/2023/03/14/ai-for-telecom-gtc/
MacRae, D., “30 countries to launch 5G services in 2023,” Telecoms Tech, March 6, 2023; https://www.telecomstechnews.com/news/2023/mar/06/30-countries-to-launch-5g-services-in-2023/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Metaverse Can Drive Innovation and Progress in the Industrial Sector

Posted on April 17, 2023December 18, 2023 by Veronica Carlasuc

In the face of growing enthusiasm for all things AI, Nick Clegg, head of global affairs for Meta Platforms Inc., held a virtual roundtable within the metaverse in March to outline what Meta sees as the future of virtual worlds.

Clegg highlighted two main ways Meta can leverage its investment in virtual worlds, namely advertising and commerce. Meta has found success in utilizing user data to target tailored advertisements on platforms such as Facebook and Instagram, driving significant profitability. The plan is to follow a similar strategy with the metaverse. However, it remains to be seen how willing consumers are to buy virtual goods or use the metaverse for real-world shopping.

While certain communities, such as gaming and fitness, have been quick to embrace virtual worlds, Meta sees untapped potential in other fields like education and healthcare, according to Clegg. He emphasized Meta’s commitment to involving researchers, civil organizations, and other companies in the development of the metaverse, with the goal of creating an experience that fosters genuine creativity, ingenuity, and enjoyment.¹

Also in March, at Nvidia GTC (a conference focused around issues in AI and the metaverse), included an expert panel discussing “The industrial metaverse: Are we there yet?” The conclusion of the participants was that the industrial metaverse—which offers real-time, collaborative, and photorealistic industrial visualization—has the potential to revolutionize how we build our factories, cities, and bridges. It can inform and develop real-world engineering and simulation, making infrastructure greener, more sustainable, and more resilient.

The panelists saw collaboration and interoperability as key aspects of the industrial metaverse’s potential, allowing for multi-user interactions and company-to-company collaboration. As demands grow for infrastructure to meet economic, community, and sustainability goals, the industrial metaverse can enable expansive and collaborative solutions, particularly in a hybrid work environment. The panelists highlighted the metaverse’s power to drive innovation and progress in the industrial sector by unlocking value and improving efficiency in design.²

Updates on Specific Companies in the Metaverse

Nvidia Corporation

Nvidia and Microsoft unveiled a new partnership aimed at providing millions of Microsoft enterprise users with access to Nvidia Omniverse Cloud and Nvidia DGX Cloud via the Microsoft Azure cloud. Nvidia Omniverse Cloud is a comprehensive platform-as-a-service designed for industrial metaverse applications, while Nvidia DGX Cloud offers AI supercomputing services. As part of the collaboration, Microsoft 365 products will also be integrated with Nvidia Omniverse to streamline the development and operation of 3D industrial metaverse applications.³

Sea Limited

Sea Limited announced positive Q4 net income in March, demonstrating the underlying strength of its business model. Total net income in Q4 2022 was $422.8 million, up from a loss of $616.3 million YoY. In part, the strong showing in Q4 was due to a $746 million reduction in sales and marketing expenses undertaken by management since the Q3 earnings report. Freezes to salaries and employee headcount were also factors in these savings.

Garena, the Sea Group’s gaming unit where most of its efforts in metaverse technology are housed, saw revenue slip YoY in Q4. Garena’s revenue was $948.8 million in Q4, down from $1.41 billion a year earlier.⁴

Investing in the Metaverse with MESH ETF

Looking to invest in the Metaverse? The Evolve Metaverse ETF (MESH ETF), is Canada’s first metaverse ETF.

Portfolio Strategy and Activity

For the month, Sea Ltd made the largest contribution to the Fund, followed by Nvidia Corporation and Advanced Micro Devices Inc. The largest detractors to performance for the month were Matterport Inc, followed by Synaptics Inc and Walt Disney Co.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

Edgerton, A., & Barinka, A., “The Metaverse Is Still the Next Big Thing, Meta Insists,” Bloomberg, March 29, 2023; https://www.bloomberg.com/news/articles/2023-03-29/meta-s-clegg-insists-the-metaverse-is-still-the-next-big-thing
Takahashi, D., “The industrial metaverse: Are we there yet? | GTC panel,” VentureBeat, March 22, 2023; https://venturebeat.com/metaverse/the-industrial-metaverse-are-we-there-yet-gtc-panel/
“NVIDIA and Microsoft to Bring the Industrial Metaverse and AI to Hundreds of Millions of Enterprise Users via Azure Cloud,” Nvidia, Tuesday, March 21, 2023; https://nvidianews.nvidia.com/news/nvidia-and-microsoft-to-bring-the-industrial-metaverse-and-ai-to-hundreds-of-millions-of-enterprise-users-via-azure-cloud
Chiang, S., “Singapore’s Sea Group turns profitable for the first time,” CNBC, March 8, 2023; https://www.cnbc.com/2023/03/08/singapores-sea-group-turns-profitable-for-the-first-time.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

New AI System Maps Cancer Tumour Genetics in Less Than 90 Seconds

Posted on April 13, 2023December 18, 2023 by Veronica Carlasuc

The trend toward AI, which has been dominating discussions in so many fields since late last year, is finding growing applications in healthcare as well. In March, researchers announced the development of an AI-based system called DeepGlioma that can screen for genetic mutations in cancerous brain tumours in less than 90 seconds, according to a study published in Nature Medicine.

And as part of an effort to expand its own cancer treatment offerings, Pfizer (held by the Fund) announced a $43 billion deal to acquire Seattle-based Seagen Inc., a biotech firm known for its targeted cancer drugs. The companies expect the deal to be finalized in late 2023 or early 2024. Seagen is a pioneer in antibody drug conjugates (ADCs), a class of drugs that use anti-cancer toxins to target tumours. ADCs are predicted to be a significant segment of the $375 billion global cancer drugs market, with estimated sales of $31 billion by 2028.

Cancer treatment is a crucial business segment for Pfizer, contributing over $12 billion to the company’s $100 billion in sales in 2022. With several drugs facing patent expiration in the coming years, Pfizer has been seeking acquisitions to offset expected declines. Seagen’s therapies would expand Pfizer’s portfolio of breast and bladder cancer drugs and bolster its offerings for other tumours with large patient populations, such as myeloma.

Pfizer executives believe that the Seagen acquisition could generate more than $10 billion in revenue by 2030, assuming the successful expansion of the biotech’s drugs to treat additional types of tumours.²

In other Pfizer news, a new study by Stanford Medicine confirmed that the Pfizer/BioNTech mRNA COVID-19 vaccine is more effective at stimulating an effective T cell response to fight future SARS-CoV-2 infections compared to natural infection with the virus. The study also showed that getting vaccinated after being infected with SARS-CoV-2 improves the immune response, but not as much as getting vaccinated before contracting the disease. This suggests that getting vaccinated prior to infection is the best approach to minimizing health risks associated with COVID-19. The findings were published in Immunity.³

Updates on Specific Healthcare Companies

Sanofi S.A.

The late-stage clinical trial results for Dupixent, Sanofi’s anti-inflammatory asthma drug developed in partnership with Regeneron Pharmaceuticals, Inc., are promising. The trial showed a 30% improvement in symptoms of moderate or severe chronic obstructive pulmonary disease (COPD) in 939 current or former smokers. The improvements were seen in lung function, quality of life, and respiratory symptoms. Sanofi’s decision to forego earlier-stage clinical trials for COPD may have shortened the development time of the drug.

Sanofi had previously forecasted that Dupixent could generate up to 13 billion euros ($14.2 billion) in sales as its use is expanded to treat other inflammatory conditions, such as eczema. Although COPD was excluded from these projections, market consensus for sales of Dupixent by 2027 could be an additional one to two billion euros. This indicates the potential for Dupixent to become a significant revenue-generating drug for Sanofi, even beyond its initial projections, if it is approved for COPD and other inflammatory conditions.⁴

Novo Nordisk A/S

New figures released by Novo Nordisk A/S show a significant increase in market value in 2022 due to the success of its weight-loss drugs, Wegovy and Ozempic. Since gaining approval in the US in June 2021, Wegovy, along with Ozempic—diabetes drugs that are also used for weight loss—has doubled Novo Nordisk’s market value to $336 billion USD. This has made Novo Nordisk Europe’s second-most valuable firm, surpassing Nestle SA.

Novo Nordisk’s management acknowledges the potential of these drugs in generating revenue, as they accounted for 43% of group revenues in 2022, up from 30% in 2021. Analysts predict that the global weight-loss therapies market could be worth $30 billion to $50 billion by 2030, and Novo Nordisk’s drugs are seen as key tools in fighting rising obesity rates worldwide.

Both Wegovy and Ozempic are based on appetite-suppressing technology known as GLP-1 agonists, with Wegovy being approved for treating obesity and Ozempic for diabetes but also widely used for weight loss. Novo Nordisk has struggled to keep up with the high demand for its drugs, facing shortages and production issues. However, the company has resolved some of these bottlenecks and is expanding production in the U.S. and Denmark to meet demand.⁵

LIFE ETF: An Easy Way to Invest in Global Healthcare

Investing in ETFs can be one way to add cutting-edge healthcare to your portfolio.

LIFE ETF Portfolio Strategy and Activity

For the month, Sanofi S.A. made the largest contribution to the Fund, followed by Novartis AG and Novo Nordisk A/S. The largest detractors to performance for the month were CSL Limited, followed by Medtronic Plc and Abbott Labs.

For more blogs like this, and for insights on investing and related investment products, sign up for our weekly newsletter here.

Sources:

Fromson, N., “AI Predicts Genetics of Brain Cancers in Less Than 90 Seconds,” Technology Networks, March 24, 2023; https://www.technologynetworks.com/cancer-research/news/ai-predicts-genetics-of-brain-cancers-in-less-than-90-seconds-371471
Hopkins, J. & Rockoff, J., “Pfizer Agrees to Buy Seagen for $43 Billion,” The Wall Street Journal, March 13, 2023; https://www.wsj.com/articles/pfizer-agrees-to-buy-seagen-for-43-billion-180a9117
Goldman, B., “mRNA vaccine beats infection for key defense against COVID-19, Stanford Medicine scientists find,” Stanford Medicine, March 28, 2023; https://med.stanford.edu/news/all-news/2023/03/vaccine-covid-infection.html
Burger, L., “Sanofi, Regeneron unveil ‘blow-out’ smoker’s lung drug data,” Reuters, March 23, 2023; https://www.reuters.com/business/healthcare-pharmaceuticals/sanofi-regenerons-dupixent-meets-endpoints-clinical-trial-2023-03-23/
Ekblom, J. & Ring, S., “Obesity Drug Hit Makes Novo Nordisk More Valuable Than Nestle,” BNN Bloomberg, March 24, 2023; https://www.bnnbloomberg.ca/obesity-drug-hit-makes-novo-nordisk-more-valuable-than-nestle-1.1899906

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Video Game Industry Shake Up With End to Blizzard-Netease Partnership

Posted on April 11, 2023December 18, 2023 by Veronica Carlasuc

The video game industry has already seen a major shake-up in 2023 with the sudden end to the 14-year partnership between U.S. studio Blizzard Entertainment and NetEase Inc., China’s second-largest gaming company.

But with China’s easing of covid-era restrictions on travel, executives from NetEase attended the Game Developers Conference in San Francisco in March, as they shift their focus to developing original hit games for both Chinese and international markets.

Following its rapid acquisition of global studios and talent, NetEase is now pivoting to providing full support to these studios to deliver high-quality products. They expect their overseas investments to see returns within the next two to three years, and the company aims to be involved in a quarter of all AAA premium titles in the global market and generate half of its gaming sales from outside China within the next five years.

NetEase aims to position itself as a distinct alternative to Tencent, with a strong focus on game creation and a willingness to take risks, allowing its studios autonomy to develop new intellectual property. The company has already recruited star producers behind popular franchises Watch Dogs and Yakuza to help them do just that.

In addition to its game development efforts, NetEase plans to embed its own AI chatbot into games, starting with the upcoming mobile release of Justice in June. This move aims to create more realistic non-player characters and reduce production costs in the long run.¹

Company Specific Updates

Roblox Corp

In March, Roblox Corporation announced key metrics from the month of February 2023. Daily active users (DAUs) were up 22% year-over-year, at 67.3 million, while hours engaged were up 24% year-over-year to 4.6 billion hours. Estimated revenue was between $214 million and $217 million, representing 20%-22% YoY growth, and estimated bookings were between $243 million and $247 million, representing growth of 18%-19% YoY.

Roblox also announced that approximately 5% of its $3 billion in cash and securities balance was held at Silicon Valley Bank (SVB) prior to its collapse and that on March 13, 2023, Roblox moved all of its SVB deposits of cash and securities to another financial institution.²

Activision Blizzard Inc

The first major in-game collaboration for Overwatch 2 was announced by Activision Blizzard in March. Available for a limited time only, a series of collectible cosmetic skins based on the globally beloved anime One-Punch Man launched for Overwatch 2, Blizzard’s cross-platform, free-to-play team-based action game. This collaboration provides a model and test case for future crossover promotions within the Overwatch universe and other Blizzard properties.³

Also in March, Activision Blizzard announced pre-orders for Crash Team Rumble, a new team-based multiplayer game for Activision’s multi-million selling Crash Bandicoot franchise. Crash Team Rumble will be released on PlayStation 5, PlayStation 4, Xbox Series X/S and Xbox One on June 20, 2023, with pre-orders granting access to a closed beta available April 20 through April 24.⁴

HERO ETF: Diversified Investing in Video Games

Interested in a diversified approach to investing in video games? Canada’s first esports and gaming ETF, the Evolve E-Gaming Index ETF (HERO ETF), is an index-based exchange-traded fund that invests in the leading video game companies across the globe. To learn more about HERO ETF, please click here: https://evolveetfs.com/hero/.

HERO ETF Portfolio Strategy and Activity

For the month, Roblox Corp made the largest contribution to the Fund, followed by Netease Inc and Activision Blizzard Inc. The largest detractors to performance for the month were Bandai Namco, followed by NCSoft Corp and CD Projekt S.A. On last rebalance, these securities were added to the portfolio: Webzen Inc and Paradox Interactive AB.

Sources:

Huang, Z., & D’Anastasio, C., “Life After ‘World of Warcraft’ Starts with NetEase Searching for Its Own Hits,” Bloomberg, March 29, 2023; https://www.bloomberg.com/news/articles/2023-03-29/life-after-warcraft-starts-with-netease-searching-for-own-hits
“Roblox Reports February 2023 Key Metrics,” Roblox, March 15, 2023; https://ir.roblox.com/news/news-details/2023/Roblox-Reports-February-2023-Key-Metrics/default.aspx
“First Major In-game Collaboration for Overwatch® 2 Adds Cosmetic Collection Based on Beloved One-Punch Man Anime,” Activision Blizzard, March 7, 2023; https://investor.activision.com/news-releases/news-release-details/first-major-game-collaboration-overwatchr-2-adds-cosmetic
“Crash Team Rumble Spins Onto Consoles June 20,” Activision Blizzard, March 21, 2023; https://investor.activision.com/news-releases/news-release-details/crash-team-rumble-spins-consoles-june-20

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Major New EV Investments Announced for North America

Posted on April 7, 2023December 18, 2023 by Veronica Carlasuc

A combination of regulation and innovation continues to drive growth in the electric vehicle sector.

In late March, California announced requirements that half of all heavy trucks sold by 2035 must be electric. This is part of the state’s strict limits on emissions from transportation, which produces the most greenhouse gas of any sector of the American economy.¹

Volkswagen announced large investments meant to better position the auto manufacturer in the EV space, and particularly to make the company’s electric offerings more competitive with Tesla and BYD. VW will invest 180 billion euros ($193 billion US) between 2023 and 2027, with two-thirds (approximately $129 billion) earmarked for vehicle electrification and digitization.²

Volkswagen also announced its first overseas EV battery manufacturing plant will be built in St. Thomas, ON. Due to begin production in 2027, the VW “gigafactory” will produce batteries for at least three other EV manufacturing plants in North America, including VW’s recently announced EV plant in South Carolina,³ as well as an Audi plant with a location still to be determined. The plant will be run by VW subsidiary PowerCo.⁴

Meanwhile, the EV price war Tesla began in January continues to pressure both EV manufacturers like BYD and traditional carmakers like Ford and GM to drop prices. BYD is already in a price war in China against Chinese-made Tesla models,⁵ but early results elsewhere indicate that the price drop is helping stoke demand for Tesla vehicles, as the new price point makes the cars more affordable to more consumers. Wait times for Tesla’s Model Y are up as much as four weeks since the price cut, and Tesla is reportedly working on its “Model 2” car, which is believed to have a $25,000 price. A Tesla at that price point—comparable to a Ford Focus—could prove decisive in Tesla’s quest to dominate not just the EV space, but all of auto manufacturing.⁶

Updates on EV Manufacturers

BYD Co. Ltd

BYD announced profits were up more than 400% last year thanks to record sales of 1.86 million electric and plug-in hybrids in 2022. That figure is more than sales in the previous four years combined and represents approximately one-third of all EV sales in China. With BYD now entirely out of the fossil fuel-powered car business, they will be relying on this year’s launch of new luxury EVs to broaden offerings and drive future growth as well as plans for entry into overseas markets, including Australia, Denmark, Norway, Thailand, and the UK.⁷

Polestar

Swedish electric vehicle maker Polestar (a joint venture between Sweden’s Volvo and Chinese parent company Geely), announced it exceeded its 2022 target of 50,000 vehicles last year and projected deliveries of 80,000 cars in 2023. The company is anticipating this sales increase thanks to the release of its updated Polestar 2 EV, as well as two all-new vehicles debuting in 2023—the Polestar 3 and Polestar 4. Polestar cut its annual net losses in half in 2022 and increased revenue by 84% to $2.5 billion.⁸

CARS ETF: Investing in Future Cars, Driving Our World Forward

The auto industry is undergoing the biggest transformation in generations and there is a growing demand for ways to invest in this industry.

The Evolve Automobile Innovation Index Fund (TSX Ticker: CARS), CARS ETF, is Canada’s first automobile innovation ETF. CARS ETF takes a diversified approach to invest in the development of electric cars, self-driving cars, and automobile innovation, including in some of the world’s leading manufacturers and automobile companies. CARS ETF is a great way to gain access to the future of the automobile and shift your investments into gear.

For more information on the Evolve Automobile Innovation Index Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact info@evolveetfs.com.

CARS ETF Portfolio Strategy and Activity

For the month, STMicroelectronics made the largest contribution to the Fund, followed by EVgo Inc., and Advanced Micro Devices Inc. The largest detractors to performance for the month were Mullen Automotive Inc., followed by Polestar Automotive Holding UK Ltd, and Stem Inc. On last rebalance, these securities were added to the portfolio: Mullen Automotive Inc. and Renault SA.

Sources:

Davenport, C., “California to Require Half of All Heavy Trucks Sold by 2035 to Be Electric,” New York Times, March 31, 2023; https://www.nytimes.com/2023/03/31/climate/california-electric-trucks-emissions.html
Root, A., “Volkswagen Doubles Down on EV Spending to Catch Tesla,” Barrons, March 14, 2023; https://www.barrons.com/articles/volkswagen-doubles-down-ev-spending-tesla-stock-byd-62ec192b
Blanco, S., “VW’s Scout Brand Will Build EV Pickups and SUVs in the U.S.,” Car and Driver, March 13, 2023; https://www.caranddriver.com/news/a43190139/vw-scout-ev-build-in-usa/
Butler, C., “Volkswagen to open its first North American EV battery plant in St. Thomas, Ont.,” CBC News, March 13, 2023; https://www.cbc.ca/news/canada/london/volkswagen-ev-battery-plant-ontario-1.6777144
Lee, D. & Lew, L., “BYD’s Net Income Jumps More Than 400% on EV Sales Surge,” BNN Bloomberg, March 28, 2023; https://www.bnnbloomberg.ca/byd-s-net-income-jumps-more-than-400-on-ev-sales-surge-1.1901407
Glover, G. & Nolan, B., “Tesla has declared a price war on electric-vehicle and traditional automakers alike. There are signs Elon Musk’s company is making early gains,” Business Insider, March 9, 2023; https://www.businessinsider.com/tesla-electric-vehicle-price-war-winning-elon-musk-ford-gm-2023-36.
Lee, D. & Lew, L., “BYD’s Net Income Jumps More Than 400% on EV Sales Surge,” BNN Bloomberg, March 28, 2023; https://www.bnnbloomberg.ca/byd-s-net-income-jumps-more-than-400-on-ev-sales-surge-1.1901407
Wayland, M., “Polestar cuts annual losses in half as it ramps up EV production,” CNBC, March 2, 2023; https://www.cnbc.com/2023/03/02/polestar-psny-q4-earnings-ev-production.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

HISA ETFs thrived during banking crisis

Posted on April 6, 2023February 16, 2024 by Veronica Carlasuc

Cloud Helps Fuel the Next Wave of AI Breakthroughs

Posted on April 5, 2023December 18, 2023 by Veronica Carlasuc

Cloud computing continues to transform the global economy, especially as it begins to merge with AI.

In March, Google Cloud announced a partnership with Midjourney to help power that company’s AI-powered visual imagery tool and natural language interface. Midjourney will be using Google Cloud’s custom AI accelerators (which run on GPUs built by Nvidia) to train its fourth-generation AI model. Access to Google Cloud will allow Midjourney to provide users with scalable, secure, and stable infrastructure for image generation.¹

Google also announced a new program called Built with Google Cloud AI, tailored to the needs of startups building with generative AI. Built with Google Cloud AI will provide select partners building the next generation of AI and machine learning platforms with access to Google Cloud engineering teams who can help design and optimize their applications to run as-a-service on Google Cloud infrastructure as well as training and co-marketing support as they bring their products to market.²

However, the big player in AI on the cloud remains to be Microsoft. As a first mover that has poured billions into OpenAI and ChatGPT, Microsoft is currently adding AI into a range of its products, from Office 365 and its new cybersecurity offering Microsoft Security Copilot, to its often-overlooked search engine, Bing. In March, Microsoft announced that Bing—now running OpenAI’s newest GPT-4 model—hit a total of 100 million daily active users for the first time.

By adding generative AI capabilities to its suite of offerings, Microsoft (the second largest cloud provider behind Amazon) could make its cloud services more attractive to potential customers and help make up for slowing cloud revenue growth in the post-pandemic era.³

Updates on Cloud Companies

Nvidia Corporation

Nvidia unveiled new cutting-edge chips and strategic partnerships focused on AI and cloud computing at its annual developer conference in March. With its already powerful graphics processing units (GPUs) driving ChatGPT and other generative AI models, Nvidia aims to expand its infrastructure to enable faster performance of AI applications for a wider customer base.

One notable innovation is Nvidia’s upgraded H100 NVL chip, specifically optimized for large language models like ChatGPT. This advanced chip boasts a twelve-fold increase in processing speed compared to Nvidia’s current A100 GPUs that are widely used in data centers. In fact, Microsoft recently disclosed that it had to interconnect tens of thousands of A100s to meet the skyrocketing cloud demands of OpenAI, underscoring the need for faster and more efficient solutions.⁴

salesforce einstein — Source: Salesforce/EinsteinGPT

Salesforce Inc

Salesforce Ventures, the venture capital arm of Salesforce, announced that it is setting up a $250 million fund to invest in generative AI startups. Previous Salesforce Ventures that later went public include Zoom Video Communications Inc. and DocuSign Inc.

Salesforce also unveiled its own generative AI tools for its cloud-based customer relationship management software. Called “Einstein GPT” and built with OpenAI’s generative text models, the new functionality allows users to draft text like customer service responses or initial sales emails using AI.⁵

This pivot toward AI comes as Salesforce focuses on improving overall profitability, which has included a 10% reduction in its workforce. This renewed focus has helped the stock climb more than 43% so far this year, wiping out almost all losses from 2022.⁶

Investing in Cloud Computing with DATA ETF

Portfolio Strategy and Activity

For the month, Salesforce Inc. made the largest contribution to the Fund, followed by Microsoft Corp and Alphabet Inc. The largest detractors to performance for the month were Zscaler Inc, followed by Datadog Inc. and Splunk Inc. On last rebalance, these securities were added to the portfolio: Coupa Software Inc, Descartes Systems Group Inc, and UiPath Inc.

Sources:

“Midjourney Selects Google Cloud to Power AI-Generated Creative Platform,” PR Newswire, March 14, 2023; https://www.prnewswire.com/news-releases/midjourney-selects-google-cloud-to-power-ai-generated-creative-platform-301771558.html
Ichhpurani, K., “Building the most open and innovative AI ecosystem,” Google Cloud, March 14, 2023; https://cloud.google.com/blog/products/ai-machine-learning/building-an-open-generative-ai-partner-ecosystem
Howley, D., “Microsoft is dominating the AI wars…for now,” Yahoo Finance, March 29, 2023; https://finance.yahoo.com/news/microsoft-is-dominating-the-ai-warsfor-now-200037880.html
Carr, A., “Nvidia’s Next-Gen AI Chips Are Coming to AWS and Google Cloud,” Bloomberg, March 21, 2023; https://www.bloomberg.com/news/articles/2023-03-21/nvidia-s-next-gen-ai-chips-are-coming-to-aws-and-google-cloud
Ford, B., “Salesforce Launches $250 Million Fund for Generative AI Startups,” Bloomberg, March 7, 2023; https://www.bloomberg.com/news/articles/2023-03-07/salesforce-launches-250-million-fund-for-generative-ai-startups
Ford, B., “Salesforce Considers More Job Cuts Amid Profit Push, COO Says,” Bloomberg, March 24, 2023; https://www.bloomberg.com/news/articles/2023-03-24/salesforce-considers-more-job-cuts-amid-profit-push-coo-says

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cybersecurity Pros Need AI to Keep Pace With Speed of Attacks

Posted on April 3, 2023December 18, 2023 by Veronica Carlasuc

A security study commissioned by CDW Canada found that cybercrime is a growth industry. Already worth an estimated $8 trillion worldwide, by 2025 cybercrime is projected to be worth $10 trillion. It is not surprising, then, that the study also found 90% of Canadian organizations experienced a cyber-attack in 2022.

As cyber attackers become more sophisticated, with attacks emerging more frequently, and with technological advances and remote work expanding vulnerabilities, the study found that loss of data, lockouts, and service disruptions are major concerns for Canadian businesses.

The study recognized that “cyber resilience”—the ability to minimize damage and recover from attacks through breach response and mitigation—is becoming critical to security planning, as the idea of preventing all cyber-attacks may no longer be possible. CDW recommends that security professionals leverage machine learning, automation, and analytics tools to keep pace with attackers and move at the speed of machines, not of humans.¹

With that need in mind, in March, Microsoft announced Microsoft Security Copilot, an AI-powered chatbot designed to assist cybersecurity professionals in understanding and resolving critical security issues. The chatbot draws on GPT-4, the latest large language model from OpenAI, combined with a security-specific model built by Microsoft. Microsoft engineers tested the chatbot internally and showed promising results in processing alerts and providing relevant insights quickly.

Security Copilot will work with Microsoft security products such as Sentinel and may add support for third-party tools based on user feedback. As Microsoft is a first mover in this space, if they were to require customers to use Sentinel or other Microsoft products in order to use Security Copilot it could influence purchasing decisions in favour of Security Copilot, even if other companies develop their own AI cybersecurity chatbots.²

Updates on Select Cybersecurity Companies

Okta Inc

Okta posted better-than-expected results for Q4 and annual results for the fiscal year ended January 31, 2023. In Q4, the independent identity provider increased total revenue by 33% year-over-year and subscription revenue by 34%. For the year, Okta saw 43% YoY growth in total revenue (to $1.86 billion) and subscription revenue up 44% YoY (to $1.79 billion).³

This news comes as the company also announced in March that Okta for Government High—a secure identity solution built for U.S. federal agencies—earned its U.S. Federal Risk and Authorization Management Program (FedRAMP) High Authorization. With FedRAMP accreditation, Okta can now provide a greater number of federal agencies with the highest security and privacy protection for sensitive identities, resources, and information.⁴

CrowdStrike Holdings Inc.

CrowdStrike Holdings Inc. beat projections to deliver a 48% sales gain (to $637.4 million) in Q4 and announced annual recurring revenue of $2.56 billion and new annual recurring revenue of $221.7 million, which also bested estimates.⁵

CrowdStrike also announced a strategic alliance with Dell Technologies in March, which would see the companies provide frictionless and cost-effective solutions for preventing, detecting, and responding to cyber threats for businesses of all sizes. The alliance will allow customers to manage cyber threats and protect endpoints, cloud workloads, and data. CrowdStrike will also be available across a range of Dell offerings in the coming months, including with the purchase of Dell PCs. Both companies emphasize the need for a collaborative approach to address the complex threat landscape and provide strong defense for customers.⁶

CYBR ETF: Diversified Investing in Cybersecurity

Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR), invests in global companies involved in the cyber security industry. For more information, visit the fund page here: https://evolveetfs.com/cybr/.

Portfolio Strategy and Activity

For the month, Okta Inc. made the largest contribution to the Fund, followed by Crowdstrike Holdings and Fortinet Inc. The largest detractors to performance for the month were Zscaler Inc., followed by Booz Allen Hamilton Holding Corp and GDS Holdings. On last rebalance, these securities were added to the portfolio: Hancom WITH Inc, KSIGN Co Ltd, and Absolute Software Corp.

Sources:

“With cyber criminals more organized and sophisticated than ever, security professionals developing new measures to stay ahead of attackers,” The Globe and Mail, March 24, 2023; https://www.theglobeandmail.com/business/adv/article-with-cyber-criminals-more-organized-and-sophisticated-than-ever/
Novet, J., “Microsoft introduces an A.I. chatbot for cybersecurity experts,” CNBC, March 28, 2023; https://www.cnbc.com/2023/03/28/microsoft-launches-security-copilot-in-private-preview.html
“Okta Announces Fourth Quarter and Fiscal Year 2023 Financial Results,” BusinessWire, March 1, 2023; https://www.businesswire.com/news/home/20230228006418/en/Okta-Announces-Fourth-Quarter-And-Fiscal-Year-2023-Financial-Results
“Okta for Government High Achieves FedRAMP High Authorization,” Okta, March 28, 2023; https://www.okta.com/press-room/press-releases/okta-for-government-high-achieves-fedramp-high-authorization/
Murphy, M., “CrowdStrike Jumps After Beating Revenue Estimates in Down Market,” Bloomberg, March 7, 2023; https://www.bloomberg.com/news/articles/2023-03-07/crowdstrike-jumps-after-beating-revenue-estimates-in-down-market#xj4y7vzkg
“CrowdStrike and Dell Technologies Join Forces to Transform Commercial PC Cybersecurity,” CrowdStrike, March 6, 2023; https://www.crowdstrike.com/press-releases/crowdstrike-and-dell-technologies-join-forces-to-transform-commercial-pc-cybersecurity/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

U.S. Banking Sector Demonstrates Resilience in a Turbulent Market

Posted on March 31, 2023December 18, 2023 by Veronica Carlasuc

When U.S. regulators shut down Silicon Valley Bank (SVB) in mid-March 2023 and took control of its assets, many investors had flashbacks to the 2008 financial crisis. Indeed, SVB—the 16^th largest bank in the United States—was the largest U.S. bank to fail since the start of the Great Recession.

Brought on by “inadequate liquidity and insolvency” after bond holdings tanked due to higher interest rates, the demise of SVB (coupled with the collapse of Signature Bank around the same time) sent shockwaves through the banking industry both at home and abroad.¹

The good news for investors, however, is that while banking stocks may have been battered, the resilience shown by the U.S. banking sector as it has tried to weather the storm shows that lessons from previous crises have been learned and that thanks to swift, decisive action to backstop the industry, the U.S. banking sector remains on solid footing and has avoided some of the banking concerns that have begun to crop up in Europe.

U.S. banking sector shows its resilience in the face of uncertainty

Ironically, the very actions taken to shore up struggling banks demonstrate the overall resilience of the U.S. banking sector, even in the face of a possible crisis.

Throughout the turbulence kicked off by the collapse of SVB, officials were at pains to emphasize that the situation in 2023 was significantly different from the crisis of 2008, with U.S. banks today better capitalized and with easier access to funds to avert a domino effect across the financial industry.²

As evidence, in a deal brokered by U.S. Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, and JPMorgan Chase CEO Jamie Dimon (amongst others), a number of major U.S. lenders, including JPMorgan Chase, Citigroup, Bank of America Corp, Wells Fargo, Goldman Sachs, and Morgan Stanley participated in a $30 billion rescue of First Republic Bank.

A regional lender, First Republic’s shares had dropped 70% in less than two weeks after they were caught in the knock-on effects of the sudden collapse of SVB and Signature Bank. This injection followed an initial round of financing secured through JPMorgan that gave First Republic access to $70 billion in emergency funding.³

Yellen credited the “decisive and forceful”⁴ actions taken by these banks for demonstrating that the U.S. banking system remains sound—a sentiment echoed by Fed Chairman Powell,⁵ and the U.S. Treasury’s Financial Stability Oversight Council, who called the banking system “sound and resilient.”⁶

US bank failures — Source: Visual Capitalist

Credit Suisse and the situation in Europe

While the U.S. financial system may be demonstrating its resilience, the status of European banks remains something of an open question.

The head of the European Banking Authority recently said that European lenders remain at risk from “potential pockets of vulnerability” in the banking sector.⁷ These vulnerabilities, which have begun coming to light in the wake of the collapse of SVB and other American lenders, like Signature Bank and First Republic, have already ensnared several European banks.

Germany’s Deutsche Bank, which has seen billions of dollars in losses over the last decade as it weathered scandals, strategy changes, and major restructurings and layoffs, has been on shaky ground in recent days. Germany’s biggest lender, Deutsche Bank’s moves regarding credit default swaps on its junior debt led to a selloff that knocked €1.6 billion off the bank’s value and cut more than €30 billion off an index that tracks European banking stocks.⁸

But the shockwaves caused by the collapse of SVB have hit Switzerland’s historic but troubled Credit Suisse hardest of all.

Within days of SVB’s collapse, Credit Suisse borrowed 50 billion Swiss francs ($54 billion USD) from the Swiss National Bank to shore up liquidity after its primary investor, Saudi National Bank, said it would not give more money to Credit Suisse for regulatory and statutory reasons.⁹

Like Deutsche Bank, Credit Suisse has been hampered in recent years by scandals, the collapse of two major investment funds, high turnover in management, and significant losses. After this bailout by the Swiss government, Credit Suisse was bought by Swiss rival UBS for $3.25 billion USD. UBS announced plans to sell off and downsize parts of Credit Suisse over the next several years.¹⁰

It’s important to note the key difference in the collapse of Credit Suisse versus SVB and other American lenders: as pointed out by Jerome Powell, banking turmoil in the United States remains contained to only a small part of the industry and is mainly regional in nature.¹¹The risk in Europe is the collapse of major national banks that have been chronically mismanaged. This is where the size and diversity of the American banking sector allows for more resilience than European banks, and is a huge benefit compared to the situation in Europe.

CALL ETF: Investing in U.S. banks for enhanced yield

Looking for better yields from U.S. banks but with less risk?

For more information on CALL ETF, visit our website at https://evolveetfs.com/call/.

For more blogs like this, and for insight on investing and investment products, sign up for our weekly newsletter here.

Sources:

¹Sherman, N. & Clayton, J., “Silicon Valley Bank: Regulators take over as failure raises fears,” BBC, March 11, 2023; https://www.bbc.com/news/business-64915616

²Schroeder, P., Prentice., C., & Anand, N., “Major US banks inject $30 billion to rescue First Republic Bank,” Reuters, March 16, 2023; https://www.reuters.com/business/finance/credit-suisse-borrow-up-54-bln-it-seeks-calm-investor-fears-2023-03-16/

³Ibid

⁴Schroeder, P., Prentice., C., & Anand, N., “Major US banks inject $30 billion to rescue First Republic Bank,” Reuters, March 16, 2023; https://www.reuters.com/business/finance/credit-suisse-borrow-up-54-bln-it-seeks-calm-investor-fears-2023-03-16/

⁵Zahn, M., “US banking system ‘sound and resilient,’ Fed Chair Jerome Powell says,” ABC News, March 22, 2023; https://abcnews.go.com/Business/us-banking-system-sounds-resilient-fed-chair-jerome/story?id=98049363

⁶Schneider, H. & Sims, T., “Banking stress puts U.S. and Europe on watch for credit crunch,” Reuters, March 26, 2023; https://www.reuters.com/markets/us/feds-kashkari-banking-stress-brings-us-closer-recession-cbs-2023-03-26/

⁷ Thompson, M. & Horowitz, J., “Europe’s banks are still at risk, regulator warns,” CNN Business, March 27, 2023; https://www.cnn.com/2023/03/27/business/bank-risks-europe/index.html

⁸ Comfort, N. & Arons, S., “A Single Bet on Deutsche Bank’s Credit Default Swaps Is Seen Behind Friday’s Rout,” Bloomberg, March 28, 2023; https://www.bloomberg.com/news/articles/2023-03-28/a-single-bet-on-deutsche-bank-s-cds-is-seen-behind-friday-s-rout

⁹ Turak, N., “Saudi National Bank loses over $1 billion on Credit Suisse investment,” CNBC, March 20, 2023; https://www.cnbc.com/2023/03/20/saudi-national-bank-loses-over-1-billion-on-credit-suisse-investment.html

¹⁰ Reiff, N., “What Happened at Credit Suisse and Why Did It Collapse?,” Investopedia, March 28, 2023; https://www.investopedia.com/what-happened-at-credit-suisse-and-why-did-it-collapse-7369825

¹¹ Zahn, M., “US banking system ‘sound and resilient,’ Fed Chair Jerome Powell says,” ABC News, March 22, 2023; https://abcnews.go.com/Business/us-banking-system-sounds-resilient-fed-chair-jerome/story?id=98049363

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Why You Shouldn’t Ignore the Potential of the Stock Market

Posted on March 30, 2023April 4, 2023 by Veronica Carlasuc

There’s no doubt that with the headwinds facing the economy—from inflation and rising interest rates to volatility in the US banking sector and the possibility of a recession—investors face challenges in knowing the right move for their investments. They might be tempted to react defensively, sheltering assets in low-yield investments until the storm blows over.

But economically challenging times like these are when it’s perhaps most important to remain open to opportunities for growth. Continuing to invest in the stock market remains a viable option, for example, even when faced with such challenges.

With the right strategy, investors can navigate economic uncertainty and achieve their financial goals.

Investing in stocks during challenging times

When faced with economic uncertainty, the key to investing in the stock market is to play the long game. Since the year 1800, stocks have returned an average of 6.5% to 7.0% per year, after inflation.¹

Historically, the S&P 500 has gained in more years than it lost. In fact, the S&P 500 was up 40 of the 50 years between 1972 and 2021, with an average annualized return of 9.4%. In the decade between 2012 and 2021 alone, the average return for the S&P 500 was 14.8% annually.²

While it’s true that the stock market may have its ups and downs, what is equally true is that over the long term and across every market condition—including turbulent economic times—investing in stocks outperforms other classic forms of investment, including 10-year bonds, gold, and real estate.³

Why investing in the S&P 500 still makes sense

The Standard & Poor’s 500 Index (S&P 500), comprising 500 of the biggest publicly traded companies in the United States, not only serves as a measure of the general health of the US economy but also functions as a yardstick for investors to evaluate the performance of their own portfolios. Accounting for approximately 80% of the entire value of the US stock market, the S&P 500 is almost synonymous with the term “stock market.”⁴

To understand the scale of the S&P 500, consider that in 2001, the total market capitalization of the companies comprising the S&P 500 was roughly $10 trillion. By mid-June 2022, that capitalization was approximately $32 trillion.

While there are no “sure things” in investing or in the stock market, it’s worth noting the historical behaviour of the S&P 500. From 1996 to mid-June 2022, the S&P 500 had only five annual declines.⁵ And since 1950, the S&P 500 delivered positive returns 78% of the time.⁶ Considering that time span includes recessions, wars, inflation, and economic crises, the value of investing in stocks over the long-term even in times of economic uncertainty becomes clear.

But beyond a willingness to be in the market for the long haul, are there options for protecting stock holdings from volatility while keeping the option open for potential upside? Yes—by using a covered call strategy for your investments.

Consider a covered call strategy

Covered calls help lower volatility in your investments when the stock market is going sideways. They allow shareholders to generate additional income from existing stock positions while also providing some downside protection.

In a covered call, investors sell options on stock they own for a predetermined price (the “strike price”) by a specific date (the “expiration date”). In exchange for this right, a buyer pays the seller a premium—essentially the price of the option.

If the stock price rises before the expiration date, the buyer can buy the stock at the lower strike price. However, should the stock decline in value below the strike price before the expiration date, the seller keeps the premium paid by the buyer, helping reduce losses.

When the stock stays below the strike price, and the call expires, the investor keeps the buyer premium and can sell another call. Higher levels of volatility in the market generally lead to both higher premiums and higher potential upside for investors.⁷

One study found that between 1986 and 2011, covered calls on the S&P 500 outperformed the S&P 500 overall, with an 830% return on covered calls versus an 807% rise in the S&P 500 during that 25-year span.⁸

Investing in the S&P 500® with ESPX ETF

Looking for an investment solution for these uncertain times? One that will keep you invested in stocks while allowing you to take advantage of market volatility?

For more information on ESPX ETF, visit our website at https://evolveetfs.com/espx/ or click here.

For more blogs like this, and for insight on investing and investment products, sign up for our weekly newsletter here.

Sources:

¹Vartika,G., Kohn, D., Koller, T. & Rehm, W., “Markets will be markets: An analysis of long-term returns from the S&P 500,” McKinsey & Co., August 4, 2022; https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/prime-numbers/markets-will-be-markets-an-analysis-of-long-term-returns-from-the-s-and-p-500

²Price, M., “Average Stock Market Return,” The Motley Fool, March 13, 2023; https://www.fool.com/investing/how-to-invest/stocks/average-stock-market-return/

³De La Cruz, I., “Why You Need to Keep Investing in Stocks Despite the Challenging Outlook,” Investing.com, March 8, 2023; https://ca.investing.com/analysis/why-you-need-to-keep-investing-in-stocks-despite-the-challenging-outlook-200554131

⁴Price, M., “Average Stock Market Return,” The Motley Fool, March 13, 2023; https://www.fool.com/investing/how-to-invest/stocks/average-stock-market-return/

⁵Vartika,G., Kohn, D., Koller, T. & Rehm, W., “Markets will be markets: An analysis of long-term returns from the S&P 500,” McKinsey & Co., August 4, 2022; https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/prime-numbers/markets-will-be-markets-an-analysis-of-long-term-returns-from-the-s-and-p-500

⁶De La Cruz, I., “Why You Need to Keep Investing in Stocks Despite the Challenging Outlook,” Investing.com, March 8, 2023; https://ca.investing.com/analysis/why-you-need-to-keep-investing-in-stocks-despite-the-challenging-outlook-200554131

⁷Griebenow, N., “How to Position Your Income Portfolio For 2023 with Covered Calls,” Advisor Perspectives, December 13, 2022; https://www.advisorperspectives.com/commentaries/2022/12/13/how-to-position-your-income-portfolio-for-2023-with-covered-calls

⁸“New Study Compares 25-Year Performance of Options Strategy Benchmarks to Traditional Indexes,” Cboe, February 14, 2012; https://ir.cboe.com/news-and-events/2012/02-14-2012/new-study-compares-25-year-performance-options-strategy-benchmarks-traditional-indexes

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Covered Call ETFs: Evolving to the Next Level

Posted on March 28, 2023April 2, 2023 by Veronica Carlasuc

Income-seeking investors faced significant headwinds in 2022. Dividend stocks, traditionally considered a cornerstone of a yield-focused strategy suffered losses in the recent bear. With interest rates steadily rising last year and into 2023, bond prices bled, leaving even conservative fixed-income investors with no clear direction.

Investors in dividend stocks seeking consistent income must screen for high yields, which may leave them vulnerable to companies with unsustainable payout ratios and poor fundamentals. With bonds, investors must move up in duration or down in credit quality to capture higher yields, which exposes them to greater interest rate or default risk respectively.

With volatility remaining high, one strategy that has the potential to outperform is the options buy-write, AKA a covered call strategy. With this approach, call options are sold against underlying securities, generating immediate income while still ensuring upside participation. However, not all covered call strategies are created equal.

Evolve’s covered call ETFs are designed to provide yield-enhanced exposure to fundamentally sound, diversified equity sectors. The benefits? Comparable returns, higher yields, lower volatility, and reduced drawdowns. The recipe? Strong underlying assets coupled with competent active covered call management.

The underlying asset matters

The overall performance of a covered call strategy is highly dependant on the quality of the underlying asset. Many covered calls strategies default to using well-known indices and commodities, with common examples including the S&P 500, NASDAQ 100, and gold.

The first approach can create heightened market risk. For covered call strategies that track an index, investors are fully exposed to their downside risk. If the market takes a dive, the covered call strategy will follow with a high correlation. If selling covered calls on the S&P 500 index, the investor’s position will crash when the market does.

Conversely, assets like gold might possess a high volatility, which can increase the size of options premiums received from selling calls. The downside is a lack of capital appreciation. Gold, like many commodities does not have a positive expected return. Over time, an investor who sells covered calls on gold might not experience much upside potential.

Evolve’s covered call ETFs are designed with sound fundamentals in mind and a focus on positive long-term expected returns. This involves holding historically resilient market sectors which can outperform under different economic regimes. Examples include:

‘Big Six’ Canadian banks and LifeCos, U.S. banks, and European banks, which are subject to strict capital adequacy regulations and can outperform during rising-rate environments.
Global real estate, materials & mining companies, which have historically offered a strong hedge against inflationary conditions
Global healthcare companies, which have historically outperformed during recessions, possess lower volatility and sensitivity to market risk.

Source: Evolve ETFs.¹As at February 28, 2023. Annualized Distribution yield for BANK, BASE (Hedged), LIFE (Hedged), CALL (Hedged), EBNK (Hedged), BILT, ETSX, ESPX (Hedged). Calculated as the most recent announced dividend amount, annualized and then divided by the current market price. Actual yield changes daily based on market conditions.

Active management makes a difference

Many covered call ETFs on the market take a suboptimal approach to managing the options overlay. While a passive, systematic, and mechanical strategy might be good for a vanilla index fund, it tends to underperform when it comes to covered calls.

The classic example is the covered call ETF that consistently sells at-the-money calls on 100% of its underlying holdings with 30-45 days until expiry (DTE). While this approach is easy to automate and understand, it leaves a lot on the table. Namely, considerations for tax-loss selling, changes in implied volatility, or momentum of the underlying are not considered.

Evolve’s preferred approach is active. Evolve’s fund managers have the expertise and discretion to tactically manage the options overlay, taking advantage of trends, trading around volatility, and exploiting opportunities when they arise.

Covered call ETFs that sell options on 100% of the portfolio’s underlying holdings also severely limits upside potential, which hinders investors from participating fully when markets surge. At Evolve, we cap our covered call overlays on one-third (33%) of the portfolio’s underlying assets.

It’s important to recognize that upside participation plays an important role in an investor’s total returns. Sacrificing too much of this to chase yield can negatively impact overall performance. The covered call strategy is meant to enhance yields, not replace capital gains.

As mentioned earlier, our covered call ETFs provide exposure to equity sectors suitable as long-term holdings on their own. The addition of the covered call overlay can help investors better define their desired risk/return profile and income needs, while still ensuring competitive returns.

For more blogs like this, insights on covered call ETFs and updates to our product lineup, consider signing up for our weekly newsletter.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Pharmaceutical Companies Betting Exciting New Drugs Will Make Up for Post-COVID Dip

Posted on March 24, 2023December 18, 2023 by Veronica Carlasuc

Pfizer Inc and its partner BioNTech SE announced in February that they have applied for full FDA approval of their Omicron-focused COVID-19 vaccine for use both as a primary vaccine and a booster for those 12 years and older.¹Separately, BioNTech SE completed the construction of a facility in Germany that will make a key ingredient in its messenger-RNA vaccines, including those for cancers and infectious diseases like COVID-19. Chancellor Olaf Scholz welcomed the opening of the facility and said Germany needs to support the creation of more such facilities to help develop and launch new drugs and therapies.²

However, Pfizer also announced a 2023 forecast that didn’t meet analysts’ overall expectations. While Pfizer anticipated that it couldn’t match the $100 billion in sales of its COVID-19 vaccine Comirnaty and pill Paxlovid from last year, the post-COVID dip was steeper than expected, leading to the reduced forecast. Pfizer believes demand for its COVID treatment will grow again in 2024, after governments work through the massive stockpile of vaccines they have on hand.³ Likewise, AstraZeneca (held by the Fund) announced it was counting on up to 15 new treatments in cancer, metabolic, and rare disease drugs set to debut over the next decade to make up for the decline in COVID-related sales.⁴

Elsewhere, researchers from Leiden University have developed a “DNA medication pass” that uses a patient’s DNA profile to enable doctors and pharmacists to identify whether they are likely to benefit from or have adverse reactions to a specific drug, as well as establish the optimal dose for that individual. Publishing their findings in The Lancet, this breakthrough in precision medicine allowed the researchers to achieve a 30% reduction in serious side effects for patients. The pass can be used to custom design treatments across a wide range of diseases and may lead to a more effective and efficient approach to prescribing medicines.⁵

Company Specific Updates

Bristol Myers Squibb Co.

Bristol Myers Squibb Co. reported better-than-expected Q4 earnings thanks to a smaller-than-expected decline in sales of its cancer drug, Revlimid. This is the first year of generic competition for Revlimid, and the company’s success in growing through the year is seen as a positive sign. The company announced it was counting on newer products, such as its cancer therapies Opdualag and Abecma, to offset the decline in Revlimid sales. Bristol Myers expects to double sales of these more recent offerings in 2023 to about $4 billion YoY.⁶

healthcare technology — Source: Seekingalpha.com/news/merck

Merck & Co Inc

Merck’s new non-small cell lung cancer drug Keytruda was approved by the U.S. Food and Drug Administration as adjuvant treatment following successful results from Phase 3 trial. In collaboration with Moderna, Inc., Merck’s Phase 2b trial of Keytruda in combination with a personalized mRNA therapeutic cancer vaccine showed “a statistically significant and clinically meaningful improvement” in recurrence-free survival for post-surgical patients with stage III/IV melanoma versus Keytruda alone. In addition, Merck has received positive topline results from two other Phase 3 trials for the use of Keytruda against certain kinds of biliary tract and gastroesophageal cancers.⁷

Investing in Global Healthcare with LIFE ETF

One way to simplify investing in the cutting-edge healthcare industry is through an ETF. Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip companies in the healthcare industry, with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

LIFE ETF Portfolio Strategy and Activity

For the month, AbbVie Inc. made the largest contribution to the Fund, followed by Stryker Corporation and Novo Nordisk A/S. The largest detractors to performance for the month were Eli Lilly & Co., followed by Roche Holding Ltd., and Abbott Labs.

Sources:

¹“Pfizer/BioNTech apply for full FDA approval of updated COVID vaccine,” Reuters, February 24, 2023; https://www.reuters.com/business/healthcare-pharmaceuticals/pfizerbiontech-apply-full-approval-updated-covid-vaccine-2023-02-24/

²Loh, T., “BioNTech Expands German Plant as Scholz Vows to Help Pharma,” Bloomberg, February 2, 2023; https://www.bloomberg.com/news/articles/2023-02-02/biontech-boosts-german-investment-with-expansion-of-vaccine-hub

³Cattan, N., “Pfizer 2023 Outlook Disappoints as Covid Business Drops Off,” Bloomberg, January 31, 2023; https://www.bloomberg.com/news/articles/2023-01-31/pfizer-forecasts-lower-than-expected-2023-earnings-on-covid-dip

⁴Grover, N. and Fick, M., “AstraZeneca goes for growth with new drugs as COVID sales wane,” Reuters, February 9, 2023; https://www.reuters.com/business/healthcare-pharmaceuticals/astrazeneca-q4-revenue-just-shy-analyst-estimates-2023-02-09/

⁵Cohen, J., “In Potential Breakthrough, Dutch Study Shows How Use Of a ‘DNA Medication Pass’ Can Significantly Reduce Adverse Events,” Forbes, February 3, 2023; https://www.forbes.com/sites/joshuacohen/2023/02/03/in-potential-breakthrough-dutch-study-shows-how-use-of-a-dna-medication-pass-can-significantly-reduce-adverse-events/

⁶Erman, M., “Bristol Myers’ profit beats on better-than-feared Revlimid sales,” Reuters, February 2, 2023; https://www.reuters.com/business/healthcare-pharmaceuticals/bristol-myers-q4-earnings-sag-lower-revlimid-sales-2023-02-02/

⁷“Merck Announces Fourth-Quarter and Full-Year 2022 Financial Results,” Merck, February 2, 2023; https://www.merck.com/news/merck-announces-fourth-quarter-and-full-year-2022-financial-results/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How Generative AI Can Cuts Costs and Improve Speed-To-Market for Video Games

Posted on March 23, 2023December 18, 2023 by Veronica Carlasuc

More details were offered in February about the 10-year agreement announced late last year between Microsoft and Nintendo (held by the Fund) to make Call of Duty games available on both Nintendo systems and the Xbox on the same day and with “full feature and content parity.” The deal is part of Microsoft’s attempt to convince PlayStation maker Sony to accept the same terms and help alleviate concerns held by EU regulators about Microsoft’s proposed $69 billion acquisition of Activision Blizzard, publisher of Call of Duty.¹

UK-based start-up Latent Technology has secured $2.1 million in pre-seed funding to develop its AI-based technology for video game development. The company is part of the “generative AI” technology trend rapidly transforming the tech sector. Latent’s technology eliminates the need for game makers to manually animate every possible movement and action in a video game, which is time-consuming and expensive. Instead, the technology uses machine learning trained on motion capture data to enable video game characters to react to virtually anything that happens in the game but with actions generated by the AI algorithm. Incorporating generative AI into video game production workflow holds the potential for significant cost reductions and faster time-to-market for video game producers.²

And a new report on generational differences in gaming and digital engagement released by Newzoo, a market research firm focused on gaming, shows how Gen Z, Millennials, and Gen X engage differently with different forms of entertainment, including gaming.

While the report finds all three generations spend the bulk of their time in digital activities, Gen Z consumers spend the most time in virtual worlds and playing games, preferring “active” entertainment that requires active engagement (reading material, content creation, game playing) almost as much as passive forms of entertainment (viewing and listening).

As the most gaming-focused generation, Gen Z’s interest in interactive media has significant implications for the future success of ‘the metaverse,’ as games become a conduit for a variety of interactions beyond just play, such as socializing, creating, and collaborating. It suggests that consumer buy-in can no longer be achieved through passive experiences alone and that success can only be had by adding active engagement into the media value chain.³

Updates on Specific Gaming Companies

Activision Blizzard

Activision Blizzard’s Q4 earnings bettered analysts’ expectations in net bookings ($3.57B versus $3.08B expected), earnings per share ($1.87 versus $1.52 expected), and monthly active users (389 million versus 388.4 million expected). These better-than-expected results were driven by recent high-profile releases Call of Duty: Modern Warfare II, Overwatch 2, and World of Warcraft: Dragonflight. Modern Warfare II alone generated $1 billion in sales in its first ten days, while a free-to-play version of Call of Duty called “Warzone 2.0” attracted 25 million players within its first week.⁴

On the acquisition front, Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard received a boost in February when Microsoft and Nvidia (who had previously opposed the deal) signed a 10-year agreement for Xbox games to appear on Nvidia’s GeForce Now cloud-based gaming service. With Nvidia now supporting the Microsoft-Activision Blizzard deal, it may help address competition concerns expressed by regulators in the US, UK, and EU.⁵The deal is expected to close by Jun 30, 2023.

Roblox Corp.

Roblox, the online gaming platform, announced Q4 earnings that surpassed analysts’ predictions on both top and bottom lines. Roblox reported $899.4 million in revenue compared to an expected $881.4 million. The revenue figure, which includes sales recognized during the quarter and deferred revenue, is referred to by the company as ‘bookings,’ and showed a 17% increase in bookings from the previous year. Roblox generates revenue from the sale of its virtual currency, Robux, which is used by players for in-game purchases. The company also reported an increase in average daily active users by 19% YoY, with a total of 58.8 million users in Q4. Users spent a total of 12.8 billion hours engaged in Roblox in Q4, a growth of 18% YoY.⁶

These better-than-expected results suggest that Roblox may be faring better than other video game makers in the face of a potentially slowing economy. These results also mean that the post-pandemic dip which hit earnings may be behind the company, and that a continued focus on key drivers like sign-ups, retention, engagement, and monetization means Roblox can still grow in a post-pandemic world.⁷

Investing in Video Games with HERO ETF

Looking to invest in video games? Consider Canada’s first esports and gaming ETF, the Evolve E-Gaming Index ETF (HERO ETF). HERO ETF is an index-based exchange-traded fund that invests in leading video game companies across the globe. To learn more about HERO ETF, please click here: https://evolveetfs.com/hero/.

HERO ETF Portfolio Strategy and Activity

For the month, Sega Sammy Holdings made the largest contribution to the Fund, followed by Wemade Co. Ltd, and Paradox Interactive AB. The largest detractors to performance for the month were Electronic Arts Inc, followed by Nintendo Ltd. and Netease Inc. On the last rebalance, these securities were added to the portfolio: Webzen Inc. and Paradox Interactive AB.

Sources:

¹Porter, J., “Microsoft Signs Binding Call of Duty Deal With Nintendo Ahead Of EU Activision Hearing,” The Verge, February 21, 2023; https://www.theverge.com/2023/2/21/23608256/microsoft-nintendo-call-of-duty-agreement-legal-eu-hearing

²Kokalitcheva, K., “Latent Technology Raises $2.1M To Bring Generative AI To Video Games,” Axios, February 2, 2023; https://www.axios.com/2023/02/06/latent-technology-21-million-generative-ai-video-games

³Kaser, R., “Newzoo: Gen Z’s gaming habits foreshadow the metaverse,” VentureBeat, February 6, 2023; https://venturebeat.com/games/newzoo-gen-zs-gaming-habits-foreshadow-the-metaverse/

⁴Garfinkle, A., “Activision Blizzard Results Top Estimates Amid Otherwise Rough Quarter for Game Makers,” Yahoo Finance, February 6, 2023; https://ca.finance.yahoo.com/news/activision-blizzard-results-top-estimates-amid-otherwise-rough-quarter-for-game-makers-202159266.html

⁵Kharpal, A., “Nvidia supports Microsoft, Activision merger after Xbox deal to add games to cloud service,” CNBC, February 21, 2023; https://www.cnbc.com/2023/02/21/microsoft-will-bring-xbox-games-to-nvidias-cloud-gaming-service.html

⁶Capoot, A., “Roblox Stock Up 26% After Fourth-Quarter Earnings Report Beats Estimates,” CNBC, February 15, 2023; https://www.cnbc.com/2023/02/15/roblox-rblx-earnings-q4-2022.html

⁷Neiger, C., “Why Roblox Stock Is Climbing Today,” The Motley Fool, February 15, 2023; https://www.fool.com/investing/2023/02/15/why-roblox-stock-is-climbing-higher-today/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cloud Computing Can Help UK Go Zero Emissions By 2050

Posted on March 21, 2023December 18, 2023 by Veronica Carlasuc

February was a busy month for all things cloud computing.

In Texas, a federal judge halted a patent infringement trial midway through arguments, issuing a rare, directed verdict in favour of defendant VMware Inc. The patent infringement case brought by WSOU Investments LLC (a patent-monetization company) alleged VMWare infringed on three of WSOU’s cloud-computing patents. After WSOU rested its case, lawyers for VMWare asked the court for a directed verdict in its favour, and the judge agreed. A directed verdict indicates the court’s belief that the plaintiff failed to prove a prima facie case of the offense alleged, entitling the defendant to a verdict of “not guilty”.¹

Cloud computing featured prominently in the recently published Net Zero Review by former UK Energy Minister and current MP, Chris Skidmore. Expressing concerns that the UK is lagging behind its emissions reduction targets, Skidmore emphasized the need for the public sector to modernize legacy systems and accelerate its transition to the cloud to help achieve the government’s goal of net zero emissions by 2050. The UK government is expected to release an updated version of its Net Zero Strategy by the end of March, which will likely include policies based on Skidmore’s 129 recommendations for decarbonization. This will put renewed pressure on the public sector to review their operations and move to more cloud-based applications to meet sustainability targets.²

Amazon reported that AWS, its cloud unit, had revenue that grew by 20% in Q4. While that is faster growth than its parent company, it means AWS missed expectations and was down from Q3’s 27.5% growth rate. Industry-wide, cloud growth appears to be moderating in line with other parts of the tech industry that enjoyed boom times over the last 10 years, and which only accelerated during the pandemic. Microsoft likewise reported that revenue from its Azure platform and other cloud services were also down from the previous quarter.³

Updates on Specific Cloud Companies

Fortinet Inc

Fortinet, a global cybersecurity leader, announced the FortiSP5, a fifth-generation security processing unit with significant implications for cloud and edge computing. A breakthrough in ASIC technology, the FortiSP5 chip consumes 88% less power than leading industry-standard chips and in a smaller form factor. FortiSP5 can accelerate and run twice as many applications concurrently as fourth-generation chips, including NGFW, zero-trust network access, and SSL inspection.

As organizations increasingly transition to the cloud and hybrid work models, FortiSP5 will continue to be a driver for Secure SD-WAN, delivering cost-effective security and seamless access to applications no matter the location.⁴

CrowdStrike Holdings

Cybersecurity tech firm CrowdStrike published its 2023 Global Threat Report in February, summarizing the company’s research into cybercrime for the previous year. The report covers topics such as malware-free extortion attacks, cloud-related attacks, and ongoing geopolitical conflicts.

CrowdStrike’s findings reveal a shift away from malware, with an increase in the number of threat actors using data theft and extortion without deploying ransomware. Malware-free activity accounted for 71% of CrowdStrike’s threat detections in 2022, up from 62% in 2021.⁵

The report also highlighted how malicious actors are looking to exploit cloud environments as a new method of attack against global organizations. Cloud exploitation increased by 95% year over year in 2022 according to the report, and the number of cases involving “cloud-conscious” threat actors almost tripled in the same timeframe.⁶

Investing in Cloud Computing with DATA ETF

If you’re interested in investing in the cloud computing industry, consider the Evolve Cloud Computing Index Fund (DATA ETF), Canada’s first cloud computing ETF. DATA ETF invests primarily in equity securities of companies located domestically or internationally that have business operations in the field of cloud computing.

DATA ETF Portfolio Strategy and Activity

For the month, Fortinet Inc. made the largest contribution to the Fund, followed by CrowdStrike Holdings, and Hubspot Inc. The largest detractors to performance for the month were Alphabet Inc., followed by Amazon.com Inc, and VMware Inc. On last rebalance, these securities were added to the portfolio: Coupa Software Inc., Descartes Systems Group Inc., and UiPath Inc.

To learn more about DATA ETF, please click here: https://evolveetfs.com/data/.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

¹Shapiro, M., “VMware Wins Rare Directed Verdict in Cloud-Computing Texas Trial,” Bloomberg News, February 23, 2023; https://news.bloomberglaw.com/ip-law/vmware-wins-rare-directed-verdict-in-cloud-computing-texas-trial

²MacRae, D., “Public sector ‘must accelerate move to cloud to cut emissions,’” CloudTech, February 17, 2023; https://www.cloudcomputing-news.net/news/2023/feb/17/public-sector-must-accelerate-move-to-cloud-to-cut-emissions/

³Novet, J., “Amazon’s cloud business reports 20% growth in fourth quarter, missing estimates,” CNBC, February 2, 2023; https://www.cnbc.com/2023/02/02/amazon-aws-earnings-q4-2022.html

⁴“Fortinet Unveils New ASIC to Accelerate the Convergence of Networking and Security Across Every Network Edge,” Fortinet, February 6, 2023; https://www.fortinet.com/corporate/about-us/newsroom/press-releases/2023/fortinet-unveils-new-asic-accelerate-networking-security-convergence-across-network-edges

⁵Culafi, A., “CrowdStrike: Threat actors shifting away from ransomware,” TechTarget, February 28, 2023; https://www.techtarget.com/searchsecurity/news/365531804/CrowdStrike-Threat-actors-shifting-away-from-ransomware

⁶Kobialka, D., “CrowdStrike 2023 Global Threat Report: Cloud Exploitation Up 95% Year Over Year,” MSSPAlert, February 28, 2023; https://www.msspalert.com/cybersecurity-research/crowdstrike-2023-global-threat-report-cloud-exploitation-up-95-year-over-year/

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

The Rising Risk of Deflation and How to Protect Your Money

Posted on March 17, 2023March 17, 2023 by Veronica Carlasuc

While we’ve heard a great deal about inflation over the last several years, its counterpart—deflation—has been less discussed and is less well understood.

But with the potential for deflation becoming a growing concern for the global economy, it’s time to better understand the causes and risks of deflation and how you can protect your investments from its negative impacts.

Deflation 101

So, what is deflation?

‘Deflation’ refers to a general decrease in the prices of goods and services, usually resulting from a reduction in the money supply and the availability of credit within an economy.

Central banks, such as the Bank of Canada or the US Federal Reserve, play a crucial role in regulating the monetary supply and work to control the possibility of deflation, just as they do the possibility of inflation.

Though monetary issues are usually the chief cause of deflation, declining prices can also result from an overall drop in the demand for goods and services, reductions in government spending, stock market downturns, increased consumer saving, and higher interest rates. Likewise, deflation can also be caused by technological advances, especially those that increase productivity faster than the supply of circulating money and credit.¹

While the declining price of goods and services might sound attractive (Who wouldn’t want increasing buying power with the same income?), the downsides of deflation can be even more severe than those of inflation.

Deflation can drive waves of unemployment, as with price drops come lower profits, forcing companies to lay off workers to cut costs. Deflation also makes debt more expensive, as interest rates trend upwards, causing businesses to curb spending. And as deflation generally occurs as part of an economic contraction or recession, in the very worst cases, a ‘deflationary spiral’—a domino effect of lower prices leading to decreased production, leading to lower pay, leading to further lowered prices, and on and on—can turn a recession into a full-blown depression.²

Deflation has happened before

When deflation hits, it tends to hit hard, as history shows us.

Canada has had nine periods of deflation since 1914. But when they happened, they were devastating. Prices dropped 20% in the early 1920s, and during the depths of the Great Depression from 1930 to 1933, prices fell an additional 25%. Falling prices meant lower profits, lower incomes, and rising unemployment, with the deflationary cycle becoming self-reinforcing.³

Similarly, the wholesale price index fell 33% in the United States during the Great Depression, while unemployment climbed above 20% between 1929 and 1933. The US economy wouldn’t get back on its previous long-term trend until well into 1942.⁴

Globally, numerous other countries have been mired in periods of deflation, with Japan perhaps the most famous (or infamous) example.

Between 1991 and 2001, Japan experienced its so-called ‘Lost Decade’ of stagflation—a vicious combination of economic stagnation and price deflation that sapped Japan’s once booming economy as the country struggled with both tight credit and a liquidity trap. While Japan eventually pulled itself out of this period, its recovery was notably slower than other major economies, and the effects of this period still reverberate in the Japanese economy today.⁵

What is the current deflation risk to the global economy?

Deflation commonly follows periods of prolonged artificial monetary expansion—such as most economies experienced during the pandemic. So, what is the current risk of deflation to the global economy?

One theory is that the rapid price rises seen in 2022 could turn to deflation in 2023 as global growth slows, energy and food prices fall, and unemployment begins to rise. And there are some signs that this is beginning to happen.

In Canada, once-in-a-generation high CPI inflation has dropped to 5.9% in January 2023 from a high of 8.1% in June 2022,⁶with projections that it could go as low as 3% by the end of 2023.⁷In the United States, the CPI fell even more dramatically, from 10.57% in the first half of the year to 1.88% in the second.⁸

These US numbers were driven by price drops in 59% of CPI components, including oil (down 38% from 2022 highs), lumber (down 67%), and housing (down 10% from peak values), as well as the biggest decline in annual M2 money supply growth since World War II.⁹

Similar evidence is available all over the world. In Turkey, inflation declined at its fastest rate in a quarter century in December. The UK saw price declines in December for the first time in over a year. And in France and Germany, inflation slowed more than expected at the end of 2022.¹⁰

While there are too many metrics at play right now to say definitively that a period of deflation is around the corner, with signs that point to the possibility, investors would be wise to take steps to protect themselves and their portfolios from the chance.

Investment ideas for deflationary times

While it might be hard to forecast deflation in advance, it can happen quickly. Remember how fast 9% inflation snuck up on us?

So how can investors position themselves to weather a potential period of deflation? Here are a few ideas:

High-Interest Savings Accounts (HISA). An option that provides both earning potential and security. By having funds in a HISA investment, you gain access to high interest deposit accounts with major banks that offer higher rates of return than any savings vehicle besides government bonds and Treasury bills.¹¹ Depending on the make-up of your HISA investment, interest accrued each month can be paid out either as additional units of the fund or as cash distributions.
Defensive sectors. While some investments can be riskier in deflationary periods, investing in defensive sectors of the economy can be a safer haven during economic uncertainty. Defensive sectors tend to have more stable demand regardless of market conditions.¹² These sectors—such as healthcare, REITs, and materials & mining—usually have strong cash flows, lower volatility, and more promising returns.¹³
Dividend-paying stocks. These companies regularly pay shareholders a percentage of their net earnings, either in cash or additional stock. Such payments tend to be made quarterly but can be made semi-annually or annually. As with defensive stocks, dividend-paying stocks tend to be established companies with predictable profits, such as in the finance or healthcare sectors. Several Canadian banks, for example, have recently raised their dividends. National Bank of Canada raised their dividend 23% late last year,¹⁴ and Royal Bank of Canada, the Bank of Nova Scotia, and the Bank of Montreal have all raised their dividends since February 28.¹⁵ This marks the second such increase for BMO in recent months, following a 25% dividend hike in late 2022.
Investment-grade (IG) bonds. Also called high-grade bonds, IG bonds are highly rated by rating agencies (rated at least Baa by Moody’s or BBB by S&P and Fitch) because they are believed to have a lower risk of default. These bonds tend to have lower yields than lower rated bonds, making them a stable, low-volatility vehicle to weather uncertain times and deflationary periods.¹⁶

Investing in a High Interest Savings ETF

If you’re looking for ways to protect your money against deflation while maximizing your monthly income, consider investing in a high interest savings ETF.

Evolve’s suite of cash solutions include the High Interest Savings Account Fund (HISA ETF) and US High Interest Savings Account Fund (HISU.U ETF). Both ETFs invest primarily in high-interest deposit accounts, exclusively with some of Canada’s ‘big six’ banks.

With cash as an important component of a well-diversified portfolio, the HISA ETF (in Canadian dollars) and HISU.U ETF (in U.S. dollars) help you preserve capital during market downturns until the time is right to invest your money elsewhere.

For more information on Evolve’s High Interest Savings Account Fund (HISA ETF) or US High Interest Savings Account Fund (HISU.U ETF), download the brochure.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:
¹“Deflation: Definition, Causes, Changing Views on Its Impact,” Investopedia, April 2, 2022; https://www.investopedia.com/terms/d/deflation.asp
²Ashford, K. & Reilly-Larke, C., “What Is Deflation?”, Forbes Advisor, July 20, 2022; https://www.forbes.com/advisor/ca/investing/what-is-deflation/

³ “Inflation and deflation in Canada,” Statistics Canada, June 28, 2006; https://www150.statcan.gc.ca/n1/pub/11-402-x/2006/3956/ceb3956_003-eng.htm

⁴ Ashford, K. & Reilly-Larke, C., “What Is Deflation?”, Forbes Advisor, July 20, 2022; https://www.forbes.com/advisor/ca/investing/what-is-deflation/

⁵ Nielsen, B., “The Lost Decade: Lessons From Japan’s Real Estate Crisis,” Investopedia, January 14, 2023; https://www.investopedia.com/articles/economics/08/japan-1990s-credit-crunch-liquidity-trap.asp

⁶ “Consumer Price Index, January 2023,” Statistics Canada, February 2, 2023; https://www150.statcan.gc.ca/n1/daily-quotidien/230221/dq230221a-eng.htm

⁷ “Inflation will likely drop to three per cent by the end of 2023, new report finds,” RSM Canada, February 22, 2023; https://rsmcanada.com/newsroom/2023/inflation-likely-to-drop-to-three-pc-by-end-of-2023-new-report-finds.html

⁸ Calhoun, G., “A Deflation Alert Hidden in The Latest Consumer Price Indicators,” Forbes, January 28, 2023; https://www.forbes.com/sites/georgecalhoun/2023/01/28/a-deflation-alert-hidden-in-the-latest-consumer-price-indicators/

⁹ Fox, M., “Wall Street has turned a blind eye to the potential for deflation over the next year – and it’s the one thing that could surprise investors in 2023,” Markets Insider, January 16, 2023; https://markets.businessinsider.com/news/stocks/stock-market-outlook-deflation-surprise-wall-street-investors-inflation-cpi-2023-1

¹⁰ Curran, E., “Inside the Biggest Economic Mystery of 2023,” Bloomberg, January 4, 2023; https://www.bloomberg.com/news/newsletters/2023-01-04/inside-the-biggest-economic-mystery-of-2023

¹¹ Carrick, R., “Rob Carrick: Answers to your questions about the low-risk ETF paying almost 5%,” The Globe & Mail, March 10, 2023; https://www.theglobeandmail.com/investing/personal-finance/carrick-on-money/article-rob-carrick-answers-to-your-questions-about-the-low-risk-etf-paying/

¹² Gopalakrishnan, J., “Defensive sectors,” Britannica Money, n.d.; https://www.britannica.com/money/defensive-sectors

¹³ Chen, J., “Understanding Defensive Stocks, Pros & Cons, Examples,” Investopedia, December 24, 2020; https://www.investopedia.com/terms/d/defensivestock.asp

¹⁴ Liew, C., “These 2 Canadian Banks Just Raised Their Dividends,” The Motley Fool, December 19, 2022; https://www.fool.ca/2022/12/19/these-2-canadian-banks-just-raised-their-dividends/

¹⁵ Stalter, K., “3 Canadian Banks That Just Increased Their Dividends,” Nasdaq.com, March 6, 2023; https://www.nasdaq.com/articles/3-canadian-banks-that-just-increased-their-dividends

¹⁶ “Investment-grade Bond (or High-grade Bond),” Investor.gov, n.d.; https://www.investor.gov/introduction-investing/investing-basics/glossary/investment-grade-bond-or-high-grade-bond

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

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Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Innovation Is Shaping the Future of Business in an Uncertain Economy

Posted on March 14, 2023December 18, 2023 by Veronica Carlasuc

The innovation-focused mindset was on display in February across eight sectors. Whether in the potential for EVs and cloud computing to help achieve environmental goals or how breakthroughs in genomics and AI will transform our health and work life, even in the face of an uncertain economy, innovation continues to be a key driver of growth for the future to stay ahead and meet the evolving needs of consumers and markets.

Automobile Innovation

Numbers released in February show that, so far, 2023 is a good year for the electric vehicle industry. Year-over-year, global EV registrations are up over 662,000 units to date (or roughly 10% above 2022 figures), with the Chinese market the main driver of growth. Continued YoY growth in other EV markets was also strong in Belgium (+75%), Japan (+104%), the United States (+118%), India (+256%), and Australia (+352%).¹Overall, new projections estimate the global market for EVs at 80.7 million units by 2030, growing at a CAGR of 30.7% between 2022-2030.²

Cybersecurity

While the tech sector is going through rounds of layoffs, strong demand for cybersecurity workers continues, given the threat of cyberattack is a persistent and growing concern. According to newly released data, there were more than 755,000 unfilled online job postings in cybersecurity as of December 2022, with only 68 workers available for every 100 job openings. These figures continue the trend of a shortage of skilled cyber talent—one which doesn’t appear likely to end soon. This steady demand makes cybersecurity a haven for investment even in the face of an uncertain economy.³

Cloud Computing

E-Gaming

A new report on generational differences in gaming and digital engagement released by Newzoo shows how Gen Z, Millennials, and Gen X engage differently with different forms of entertainment, including gaming.

While the report finds all three generations spend the bulk of their time in digital activities, Gen Z consumers spend the most time in virtual worlds and playing games, preferring “active” entertainment that require active engagement (reading material, content creation, game playing) almost as much as passive forms of entertainment (viewing and listening).

Genomics

In February, The Wall Street Journal reported that drug manufacturer Pfizer is in early discussions to acquire Seagen, the largest biotech firm in the Seattle area. Seagen is currently valued at over $30 billion and has approximately 3,200 employees globally, with 1,800 located in the Seattle region. In 2022, the company generated $2 billion in revenue, and announced plans to construct a 270,000 square foot manufacturing facility north of Seattle.

Seagen saw a YoY sales increase of 23% in 2022 for its four approved antibody-drug conjugates, which attack tumors through an antibody that recognizes cancer cells. The company is also conducting trials to test these drugs in combination with immunotherapies. In April, the FDA is expected to decide on Seagen’s application to combine its drug Padcev with Merck’s Keytruda as a first-line treatment for specific patients with urothelial cancer.⁶

Fintech

Departing PayPal Holdings Inc. CEO Dan Schulman made an unusual move as he eyes the door at the end of 2023: he purchased nearly $2 million in PayPal stock. This purchase of more than 26,000 shares comes after Schulman bought another $1 million worth of PayPal’s stock in February 2022. He also has not sold any PayPal stock since December 2021.

Insider buying and company buybacks are closely monitored by investors, and it is noteworthy that executives nearing departure from a company typically reduce their exposure to the company’s stock. However, market observers suggest that Schulman’s significant purchase may indicate management’s confidence in their ability to “expand earnings meaningfully this year, despite modest top-line growth.”

PayPal has faced challenges in the past year as it returns to normal growth following a pandemic-driven boom in e-commerce spending.⁷

Robotics & Automation

With the debut of ChatGPT and other AI chat bots, speculation is rampant about what jobs are most likely to be replaced by AI tools.

Economists and business school professors interviewed by CBS News believe that basic computer programming and drafting simple administrative or scheduling emails will be amongst the first tasks handed off to AI. Mid-level white-collar writing, such as human resources letters, advertising copy, and press releases will follow. Media planning and buying may also have to give way to AI, as companies leverage automation to buy ad space most effectively. And finally, AI may take some common forms of legal writing off the plate of over-burdened lawyers. Standard forms and documents such as those for home lease agreements, wills, and NDAs will soon all be drafted by AI.

However, as with other significant technological innovations, while some workers will lose out to AI, the technology will help generate new job roles and forms of employment for humans as it displaces.⁸

5G

T-Mobile US Inc. has exceeded profit expectations and anticipates 75% growth in free cash flow for 2023, indicating the success of its merger with Sprint Corp. and its 5G network expansion. Despite a record number of mobile-phone customer gains in 2022, T-Mobile plans to add 5 to 5.5 million new subscribers this year, slightly below analyst predictions of 5.8 million. This may signal a cooling in the mobile sector. T-Mobile added 2 million wireless home broadband customers in 2022 and is on track to have 7-8 million by 2025, according to CFO Peter Osvaldik. However, the work needed to expand fiber and upgrade cable networks may hinder wireless broadband growth.⁹

Investing in Innovation with EDGE ETF

EDGE ETF Portfolio Strategy and Activity

For the month, Evolve Cyber Security Index Fund made the largest contribution to the Fund, followed by Seagen Inc., and Nvidia Corp. On last rebalance, this security was added to the portfolio: BeiGene Ltd (Genomics).

For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

¹Pontes, J., “Best Selling Electric Cars in The World — January 2023,” CleanTechnica, March 3, 2023; https://cleantechnica.com/2023/03/03/best-selling-electric-cars-in-the-world-january-2023/

²“Global Electric Vehicles Market Report 2023: Localizing the EV Supply Chain Remains Crucial for Sustainable Growth of EVs,” GlobeNewswire, February 28, 2023; https://www.globenewswire.com/news-release/2023/02/28/2617465/0/en/Global-Electric-Vehicles-Market-Report-2023-Localizing-the-EV-Supply-Chain-Remains-Crucial-for-Sustainable-Growth-of-EVs.html

³Balasaygun, K., “Tech Layoffs Aren’t Hitting This Digital Job Market Where Over 700,000 Workers Are Needed,” CNBC, January 26, 2023; https://www.cnbc.com/2023/01/26/how-to-find-a-job-in-the-one-tech-market-that-is-not-seeing-layoffs.html

⁴MacRae, D., “Public sector ‘must accelerate move to cloud to cut emissions,’” CloudTech, February 17, 2023; https://www.cloudcomputing-news.net/news/2023/feb/17/public-sector-must-accelerate-move-to-cloud-to-cut-emissions/

⁵Kaser, R., “Newzoo: Gen Z’s gaming habits foreshadow the metaverse,” VentureBeat, February 6, 2023; https://venturebeat.com/games/newzoo-gen-zs-gaming-habits-foreshadow-the-metaverse/

⁶Schubert, C., “Seagen stock rises as Pfizer reportedly in talks to acquire Seattle-area biotech giant,” GeekWire, February 27, 2023; https://www.geekwire.com/2023/seagen-stock-rises-as-pfizer-reportedly-in-talks-to-acquire-seattle-area-biotech-giant/

⁷Bary, E., “PayPal CEO’s ‘unusual’ $2 million stock purchase is ‘certainly a positive’ signal,” MarketWatch, February 22, 2023; https://www.marketwatch.com/story/paypal-ceos-unusual-2-million-stock-purchase-is-certainly-a-positive-signal-a5dcfb0a

⁸Cerullo, M., “These jobs are most likely to be replaced by chatbots like ChatGPT,” CBS News, February 1, 2023; https://www.cbsnews.com/news/chatgpt-artificial-intelligence-chatbot-jobs-most-likely-to-be-replaced/

⁹Moritz, S., “T-Mobile Tops Profit Estimates, Sees 75% Free Cash Flow Gain,” Bloomberg, February 1, 2023; https://www.bloomberg.com/news/articles/2023-02-01/t-mobile-tops-profit-estimates-sees-75-free-cash-flow-gain

Rob Carrick: Answers to your questions about the low-risk ETF paying almost 5%

Posted on March 10, 2023February 16, 2024 by Veronica Carlasuc

First Legal Trial in The Metaverse Is a Taste of Things to Come

Posted on March 6, 2023December 19, 2023 by Veronica Carlasuc

Insiders at Apple say the company is currently developing intuitive software that will make it much easier for people to create augmented reality (AR) apps for use on Apple’s upcoming mixed-reality headset. The primary objective of this software is to allow individuals with no programming experience to use voice commands to direct the Siri voice assistant in constructing their desired app. These apps can then be uploaded and made available for purchase on Apple’s App Store. This software would represent a significant breakthrough in AR app development, which will provide a continuous stream of fresh app content, making the Apple headset an enticing consumer product.¹

Microsoft recently released a blog post regarding its Industrial Metaverse team, following reports of job cuts in both that team and the Mixed Reality team. The blog post emphasizes the Industrial Metaverse’s potential as a “transformative catalyst for innovation”, including in areas like data management, the Internet of Things, digital collaboration tools like Teams, Azure Cloud, and mixed reality. Industry speculation is that the layoffs mainly affect areas that will not generate significant revenue in the foreseeable future, such as Microsoft’s Hololens 2 AR headset. Instead, Microsoft is planning to launch its Office software to Meta-XR headsets as part of its commitment to augmented reality, virtual reality, and the Metaverse, which Microsoft CEO Satya Nadella has called the “next wave of the Internet.”²

Also in February, Columbia became possibly the first nation on Earth to hold a legal trial in the Metaverse. A two-hour hearing about a traffic dispute was held by Colombia’s Magdalena Administrative court—and also streamed live to YouTube—with the participants and the local magistrate appearing in a virtual courtroom in avatar form (the judge’s avatar sporting black legal robes).

The judge in the case described the experience as feeling “more real than a video call,” and highlighted its usefulness for trials involving abuse, for example, when having participants confront one another in person could be problematic. She also said that such Metaverse trials could be a step toward alleviating Colombia’s backlogged justice system.³

Updates on Specific Metaverse Companies

Nvidia Corp

Nvidia Corp. reported better-than-expected revenue ($6.05 billion) and net income for Q4, despite an overall year-over-year decrease in both. Prior to the February earnings report, Nvidia was up about 45% overall for 2023 to date.⁴Increasingly seen as one of the chip manufacturers best positioned to weather a recession, Nvidia’s CEO Jensen Huang said that breakthroughs like ChatGPT mean AI is now at “inflection point,” with businesses of all sizes and across all sectors racing to incorporate AI and machine learning into their businesses.⁵ Ongoing growth in Nvidia’s data center division, which includes chips utilized in artificial intelligence, along with the suitability of Nvidia’s graphics processors for training and operating machine learning software, means the emergence of AI applications such as ChatGPT and Microsoft Bing’s AI chatbot offer serious upside for Nvidia.⁶

Nvidia also announced that Huang will deliver the opening keynote at GTC 2023 this March. Huang will present the latest developments in AI as well as discuss NVIDIA Omniverse, a platform for creating and operating metaverse applications.⁷ Huang will also sit down for a fireside chat with OpenAI co-founder Ilya Sutskever on the power of generative AI, large language models, and the role they will play in the Metaverse and other cutting-edge technologies.⁸

Meta Platforms Inc.

Calling 2023 the “Year of Efficiency,” Meta Platforms Inc. CEO Mark Zuckerberg said during an investor call in February that Meta’s goal for the year is to flatten its organizational structure to make the social media company faster and more decisive in taking decisions. Zuckerberg also outlined plans to leverage AI to improve the way the platform recommends new content to users—part of a strategy to boost not only user engagement but to make Meta more attractive to advertisers. While digital ads from the finance and technology sectors make up the majority of Meta’s ad sales, Zuckerberg highlighted the growth in spending from the health and travel industries and the need to capture those ad dollars. Meta also projected lower overall expenses for 2023, reassuring investors while Meta awaits return on its investments in the development of the Metaverse.⁹

Investing in the Metaverse with MESH ETF

Looking to invest in the Metaverse? Consider the Evolve Metaverse ETF (MESH ETF), Canada’s first metaverse ETF. MESH ETF provides investors with an actively managed diversified portfolio of companies involved in the development of the metaverse.

MESH ETF Portfolio Strategy and Activity

For the month, Nvidia Corp made the largest contribution to the Fund, followed by Meta Platforms Inc. and Coinbase Global Inc. The largest detractors to performance for the month were eXp World Holdings Inc., followed by Alibaba Group Holding Ltd, and Matterport Inc.

To learn more about MESH ETF, please click here: https://evolveetfs.com/mesh/.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

¹ Ma, W., “Apple Devising Software to Help Anyone Build AR Apps, to Drive Headset Sales,” The Information, January 27, 2023; https://www.theinformation.com/articles/apple-devising-software-to-help-anyone-build-ar-apps-to-drive-headset-sales

² Bastian, M., “Microsoft commits to the ‘Industrial Metaverse,’” Mixed News, February 15, 2023; https://mixed-news.com/en/microsoft-commits-to-the-industrial-metaverse/

³ Woodford, I., “Colombia court moves to metaverse to host hearing,”Reuters, February 24, 2023; https://www.reuters.com/world/americas/colombia-court-moves-metaverse-host-hearing-2023-02-24/

⁴ Leswing, K., “Nvidia stock rises after slight beat driven by A.I. chips,” CNBC, February 22, 2023; https://www.cnbc.com/2023/02/22/nvidia-nvda-earnings-q4-2023.html

⁵ Fox, M., “Nvidia adds $79 billion in market value after CEO Jensen Huang says ChatGPT represents an inflection point for artificial intelligence,” Markets Insider, February 22, 2023; https://markets.businessinsider.com/news/stocks/nvidia-stock-price-chatgpt-artificial-intelligence-jensen-huang-ai-dgx-2023-2

⁶ Leswing, K., “Nvidia stock rises after slight beat driven by A.I. chips,” CNBC, February 22, 2023; https://www.cnbc.com/2023/02/22/nvidia-nvda-earnings-q4-2023.html

⁷Shapiro, D., “Transportation Generation: See How AI and the Metaverse Are Shaping the Automotive Industry at GTC,” Nvidia, February 16, 2023; https://blogs.nvidia.com/blog/2023/02/16/ai-metaverse-shaping-automotive-industry-gtc/

⁸“NVIDIA GTC 2023 to Feature Latest Advances in AI Computing Systems, Generative AI, Industrial Metaverse, Robotics; Keynote by Jensen Huang; Talks by OpenAI, DeepMind Founders,” Nvidia, February 21, 2023; https://nvidianews.nvidia.com/news/nvidia-gtc-2023-to-feature-latest-advances-in-ai-computing-systems-generative-ai-industrial-metaverse-robotics-keynote-by-jensen-huang-talks-by-openai-deepmind-founders

⁹Wagner, K., “Meta Shares Soar Most Since 2013 on Zuckerberg’s Vision,” Bloomberg, February 1, 2023; https://www.bloomberg.com/news/articles/2023-02-01/meta-revenue-beats-expectations-as-facebook-keeps-growing

Cybersecurity Workers Avoiding Tech Sector Layoffs

Posted on March 3, 2023December 19, 2023 by Veronica Carlasuc

As if to underscore the need for increased cyber vigilance, the news in February was full of reports of companies around the world falling victim to ransomware and other cyberattacks.

Canadian book retailer Indigo suffered a prolonged website outage beginning February 8, when it was the victim of a ransomware attack that compromised the personal data of some current and former Indigo employees. The hackers not only left Indigo’s website unable to function, but also shut down all non-cash sales in the chain’s brick-and-mortar stores and prevented returns or purchases using gift cards.²

UK-based sportswear chain JD Sports said the stored data of up to 10 million customers might have been compromised after a cyberattack. Only recently discovered, the hack affected data for online orders between November 2018 and October 2020.³

And several large data centers in Asia, including centers operated by GDS Holdings Ltd. (held by the Fund) and ST Telemedia Global Data Centres, suffered breaches of emails and passwords for customer-support websites. The data of roughly 2,000 customers of GDS and STT GDC were impacted.⁴

And as a sign of how innovation is playing a role in the cybersecurity space, a new report from SkyQuest highlights the growing role that artificial intelligence (AI) has within the industry. The ability for AI systems to map, analyse, and assess vulnerabilities within computer systems as well as detect and highlight threats at both a speed and volume impossible for humans to match is becoming a powerful tool in cybersecurity’s quest to stay a step ahead of hackers. SkyQuest is forecasting that the global AI in cybersecurity market (valued at $16.56 billion US at the end of 2022) will grow to $94.3 billion US by the end of 2030—a CAGR of 24.42% over that time period.⁵

Company Specific Updates on Select Cybersecurity Companies

palo alto, cider security team — Source: Victor Levy – Cider Security team

Palo Alto Networks

Security hardware and software maker Palo Alto Networks exceeded Wall Street projections in their Q2 earnings, generating a 26% year-over-year increase in revenue and achieving a net income of $84.2 million. This marks their third consecutive profitable quarter and represents a dramatic turnaround from the same quarter a year ago, when the company saw a loss of $93.5 million. Palo Alto Networks CEO, Nikesh Arora, noted that the company is now three years ahead of profitability goals set in 2021.

The company’s growth strategy also includes acquisitions, as seen in their recent purchase of Cider Security for $195 million. Cider Security specializes in software supply chain and application security, further strengthening Palo Alto Networks’ market position.⁶

cybercrime atlas — Source: Our.today/fortinetlauncecybercrimeatlas

Fortinet Inc

Fortinet, a global cybersecurity leader, was named a Visionary in the 2022 Gartner Magic Quadrant for Endpoint Protection Platforms. The recognition comes due to Fortinet’s seamless integration of behavior-based endpoint protection, endpoint detection and response (EDR), incident response (IR), managed detection and response (MDR), and extended detection and response (XDR).⁷

Also in February, Fortinet was part of a joint initiative to launch the Cybercrime Atlas. Partnering with the World Economic Forum, Banco Santander, Microsoft, and PayPal, the Cybercrime Atlas will provide first-of-its-kind visibility into cybercrime, helping industry, law enforcement, and governments track, disrupt, and take down cybercriminals and their infrastructure around the world.⁸

Investing in the Cybersecurity Industry with CYBR ETF

If you’re looking to invest in a cybersecurity ETF, consider Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR). CYBR ETF invests in leading global companies involved in the cybersecurity industry.

CYBR ETF Portfolio Strategy and Activity

For the month, Palo Alto Networks made the largest contribution to CYBR ETF, followed by Crowdstrike Holdings and Fortinet Inc. The largest detractors to performance for the month were GDS Holdings, followed by CACI International Inc. and Okta Inc. On last rebalance, these securities were added to the portfolio: Hancom WITH Inc., KSIGN Co Ltd., and Absolute Software Corp.

For more information on Evolve’s CYBR ETF, visit the fund page here: https://evolveetfs.com/cybr/.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

¹ Balasaygun, K., “Tech Layoffs Aren’t Hitting This Digital Job Market Where Over 700,000 Workers Are Needed,” CNBC, January 26, 2023; https://www.cnbc.com/2023/01/26/how-to-find-a-job-in-the-one-tech-market-that-is-not-seeing-layoffs.html

²Evans, P., “Indigo Website Still Offline Nearly 1 Week After Cybersecurity Incident,” CBC News, February 14, 2023; https://www.cbc.ca/news/business/indigo-cyberattack-update-1.6747714

³Race, M., “JD Sports says 10 million customers hit by cyber-attack,” BBC News, January 30, 2023; https://www.bbc.com/news/business-64452986

⁴Robertson, J., “Hackers Scored Corporate Giants’ Logins for Data Centers,” Bloomberg News, February 21, 2023; https://news.bloomberglaw.com/privacy-and-data-security/hackers-scored-corporate-giants-logins-for-asian-data-centers

⁵ “Global AI In Cybersecurity Market,” SkyQuest, February 2023; https://skyquestt.com/report/global-ai-in-cybersecurity-market

⁶Novet, J., “Palo Alto Networks Lifts Earnings Guidance as It Pursues Profitable Growth,” CNBC, February 21, 2023; https://www.cnbc.com/2023/02/21/palo-alto-networks-panw-earnings-q2-2023.html

⁷ “Fortinet Named a Visionary in the 2022 Gartner® Magic Quadrant™ for Endpoint Protection Platforms,” Financial Post, March 2, 2023; https://financialpost.com/globe-newswire/fortinet-named-a-visionary-in-the-2022-gartner-magic-quadrant-for-endpoint-protection-platforms

⁸ “Fortinet Helps Launch the Cybercrime Atlas Initiative, Enabling Businesses, Law Enforcement Agencies, and Threat Intelligence Researchers to Disrupt Cybercrime at a Global Scale,” Yahoo Finance, February 8, 2023; https://finance.yahoo.com/news/fortinet-helps-launch-cybercrime-atlas-140000790.html

Rising EV Affordability Helps Boost the Electric Vehicle Industry

Posted on March 1, 2023December 19, 2023 by Veronica Carlasuc

Numbers released in February show that, so far, 2023 is a good year for the electric vehicle industry. Year-over-year, global EV registrations are up over 662,000 units to date (or roughly 10% above 2022 figures), with the Chinese market the main driver of growth. Continued YoY growth in other EV markets was also strong in Belgium (+75%), Japan (+104%), the United States (+118%), India (+256%), and Australia (+352%).¹ Overall, new projections estimate the global market for EVs at 80.7 million units by 2030, growing at a CAGR of 30.7% between 2022-2030.²

Rising EV affordability is playing a significant role in this continued growth. Thanks to price cuts since January, Tesla’s Model 3 sedan now sells for $4,930 less than the average new vehicle sold in the US. Tesla (held by the Fund) also dropped the price of its Model Y sport utility vehicle (already the #3 best-selling SUV in the US last year) by $13,000. The move prompted Ford Motor Co. to cut prices on its electric Mustang Mach-E.³ And, in response, Lucid Group Inc. (also held by the Fund) offered consumers $7,500 in discounts on its Air electric luxury sedans.⁴

At the same time, new EV start-ups like China’s Xpeng are making aggressive pushes into the global market. In February, Xpeng launched two of its flagship electric cars in in Denmark, Norway, the Netherlands, and Sweden. Xpeng has already priced its P7 sedan below Tesla’s Model 3 in the face of intense competition from other Chinese car manufacturers as well as European companies like Volkswagen, who are all-in on electric vehicles.⁵

Company Specific Updates

Tesla Inc.

Tesla Inc. has seen a nearly 70% surge in its stock price this year, from the beginning of January to the end of February. By the end of February, the stock was up 100% in value from its lowest trading point on January 6, 2023. The company has benefited from higher demand for its electric vehicles after price cuts to several models, including the Model 3 sedan and its Model Y sport utility vehicle. Investors that are open to growth stocks were also returning to Tesla amid signs of continued economic stability coupled with a slower pace of Federal Reserve interest-rate increases.⁶

Nvidia Corp

Nvidia Corp. reported better-than-expected revenue ($6.05 billion) and net income for Q4, despite an overall year-over-year decrease in both. The chipmaker’s automotive revenue was up 135% from last year at $294 million for the quarter. Prior to the February earnings report, Nvidia was up about 45% overall for 2023 to date.⁷ Increasingly seen as one of the chip manufacturers best positioned to weather a recession, Nvidia’s CEO Jensen Huang said that breakthroughs like ChatGPT mean AI is now at “inflection point,” with businesses of all sizes and across all sectors racing to incorporate AI and machine learning into their businesses. He cited the benefits this will have for Nvidia’s chip business, as well as its new cloud-based AI supercomputer, available to customers via a web browser.⁸

Investing in Electric Vehicles with CARS ETF

The auto industry is undergoing the biggest transformation in our lifetimes and there is a growing demand for ways to invest in this industry.

The Evolve Automobile Innovation Index Fund (TSX Ticker: CARS), CARS ETF, is Canada’s first automobile innovation ETF. CARS ETF takes a diversified approach to invest in the development of electric cars, self-driving cars, and automobile innovation, including in some of the world’s leading manufacturers and automobile companies. CARS ETF is a simplified way to gain access to the future of the automobile and shift your investments into gear.

Portfolio Strategy and Activity

For the month, Tesla Inc. made the largest contribution to the CARS ETF, followed by Nvidia Corporation and Cirrus Logic Inc. The largest detractors to performance for the month were Canoo Inc., followed by Blink Charging Co. and Lucid Group Inc. On last rebalance, the following securities were added to the portfolio: Mullen Automotive Inc., and Renault SA.

For more information on the Evolve Automobile Innovation Index Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact info@evolveetfs.com.

Sources:

¹Pontes, J., “Best Selling Electric Cars in The World — January 2023,” CleanTechnica, March 3, 2023; https://cleantechnica.com/2023/03/03/best-selling-electric-cars-in-the-world-january-2023/

² “Global Electric Vehicles Market Report 2023: Localizing the EV Supply Chain Remains Crucial for Sustainable Growth of EVs,” GlobeNewswire, February 28, 2023; https://www.globenewswire.com/news-release/2023/02/28/2617465/0/en/Global-Electric-Vehicles-Market-Report-2023-Localizing-the-EV-Supply-Chain-Remains-Crucial-for-Sustainable-Growth-of-EVs.html

³ Randall, T., “Tesla Undercuts Average US Car by Almost $5,000 in EV Shakeout,” BNN Bloomberg, February 21, 2023; https://www.bnnbloomberg.ca/tesla-undercuts-average-us-car-by-almost-5-000-in-ev-shakeout-1.1886251

⁴ Rosevear, J., “Lucid joins the EV discounting fray with $7,500 ‘credits’ on some of its Air luxury sedans,” CNBC, February 9, 2023; https://www.cnbc.com/2023/02/09/lucid-offers-ev-discounts-air-sedans.html

⁵ Kharpal, A., “Chinese Tesla rival Xpeng launches flagship EVs in Europe in international push,” CNBC, February 3, 2023; https://www.cnbc.com/2023/02/03/chinese-tesla-rival-xpeng-launches-p7-and-g9-electric-cars-in-europe-.html

⁶Albright, A., “Elon Musk Regains His Spot as the World’s Richest Person,” Bloomberg, February 27, 2023; https://www.bloomberg.com/news/articles/2023-02-27/elon-musk-is-world-s-richest-person-again-after-100-tesla-stock-surge#xj4y7vzkg

⁷ Leswing, K., “Nvidia stock rises after slight beat driven by A.I. chips,” CNBC, February 22, 2023; https://www.cnbc.com/2023/02/22/nvidia-nvda-earnings-q4-2023.html

⁸Fox, M., “Nvidia adds $79 billion in market value after CEO Jensen Huang says ChatGPT represents an inflection point for artificial intelligence,” Markets Insider, February 22, 2023; https://markets.businessinsider.com/news/stocks/nvidia-stock-price-chatgpt-artificial-intelligence-jensen-huang-ai-dgx-2023-2

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

OpenAI, Google, and Microsoft: How Do These Disruptive Generative AI Platforms Differ?

Posted on February 27, 2023December 19, 2023 by Veronica Carlasuc

The artificial intelligence (AI) space got a big shot in the arm in late 2022 after a chatbot called ChatGPT was launched. Developed by OpenAI, ChatGPT had over one million users within a week of its November launch. By the end of January, ChatGPT had over 100 million users, making it the fastest-growing consumer app in history.

OpenAI’s ChatGPT is a free service known as generative AI, a platform that can generate novel content—text, sounds, and images—from simple prompts. Since the launch of ChatGPT, generative AI has entered the mainstream, with companies such as Microsoft announcing it was bringing OpenAI’s ChatGPT chatbot to its Bing search engine.

In an effort to take the wind out of the sails of Microsoft’s announcement, Google revealed its own rival to ChatGPT, Google Bard. The company was a little light on information but said it would provide additional detail on the future of its AI tech at a later date.

With the growing buzz surrounding generative AI technology and recent launch of OpenAI’s ChatGPT, its adoption by Microsoft, and eventual roll-out of rival Google Bard, many are wondering what the difference is between these chatbot platforms and how they will change the face of the next generation of search.

Both OpenAI’s ChatGPT and Google Bard AI are both generative AI models but there are some key differences.

What Is OpenAI’s ChatGPT?

In November 2022, OpenAI launched ChatGPT. The generative AI software app uses machine learning to generate creative and advanced human-like responses to text prompts.

ChatGPT learns how to create responses by training on massive amounts of data gleaned from content on the Internet, this includes books, academic journals, encyclopedias, and blogs. OpenAI also has access to Twitter’s database, which it used to train ChatGPT.

There are some limitations to ChatGPT, however. It can only access or use data prior to 2021; that’s the year in which the training stopped.

In just a short period of time, users have been amazed at how ChatGPT can understand questions and come up with novel responses. So much so that users felt like they were talking to a real human being. Users are also finding it difficult to determine if a poem, song lyrics, short story, or piece of art is made by ChatGPT or a person.

Based on the huge success of ChatGPT, OpenAI is already working on a more powerful version of the generative AI technology called GPT-4, which is set to be released in early 2023.

How Is Microsoft Using ChatGPT?

Microsoft was an early investor in OpenAI. In 2019, it invested $1 billion in the small San Francisco company. Since then, it has invested another $2 billion. The $3 billion investment went a long way in helping develop the AI chatbot. It also meant that Microsoft could develop and deploy new products based on the then secretive technology.

Microsoft is in discussions to invest another $10 billion in OpenAI as it looks to develop the technology and integrate it into its own products, allowing it to take on Big Tech competitors like Google, Apple, and Amazon.

The new generative AI technology could transform everything from online search engines like Google to digital assistants like Siri and Alexa.

To that end, on February 7, Microsoft announced it was “reinventing search with a new AI-powered Microsoft Bing and Edge,” to deliver better search, more complete answers, a new chat experience, and the ability to generate novel content.

Satya Nadella, Chairman and CEO of Microsoft said, “AI will fundamentally change every software category, starting with the largest category of all—search.”

Nadella also believes that as much as 10% of all data could be AI generated in just three years. This could result in as much as $7 billion in sales for Azure, Microsoft’s cloud computing product.

What Is Google Bard AI?

Google is the world’s most popular search engine, controlling 93% of online searches (versus 3% for Bing). It’s not going to sit idly by and allow Microsoft to erode that lead. A day before Microsoft’s announcement, Google preemptively unveiled its own AI chatbot, called Bard.

Like ChatGPT, Bard is designed to take prompts and simulate conversations with humans. Bard can be integrated into Google’s own search tools the same way Bing uses ChatGPT. It can also be integrated into websites, apps on desktop and mobile, message platforms, and other digital systems.

Google CEO Sundar Pichai describes Bard as an “experimental conversational AI service that “seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our large language models.”

Unlike ChatGPT though, which stopped training in 2021, Bard uses up-to-date information—although the new version of ChatGPT-4 could do the same when it’s launched in early 2023.

That doesn’t mean it’s all smooth sailing for Bard. In its first demo, Google Bard made factual errors about new discoveries from the James Webb Space Telescope. It’s important to keep in mind that Bard and ChatGPT are powered by AI, so mistakes are possible.

Bard hasn’t been officially launched yet and is being tested by a small group of people with an expected wider launch to be announced in the coming months.

What Is the Best Way to Invest in Disruptive, Innovative Trends?

OpenAI’s ChatGPT is the first truly disruptive technology in the AI chatbot space. But it won’t be the last. The industry is only months old and is already projected to expand at a compound annual growth rate (CAGR) of 38.1% by 2030, hitting $1.59 trillion.

How much further OpenAI’s ChatGPT and other generative AI technology will fuel the growth of AI is impossible to predict just yet. One thing is certain though, it will open the door to interesting, new investing opportunities.

You cannot invest directly in OpenAI, but there are other companies directly tied to generative AI technology, including Microsoft and Google parent Alphabet. There are a large number of stocks with exposure to generative AI technology, including semiconductors, network equipment providers, cloud providers, and Internet of Things (IoT).

A Diversified Approach to Investing in Disruptive Technology

If you’re looking to tap into disruptive and innovative trends that are fundamentally transforming our world, consider a diversified approach with the Evolve Innovation Index Fund (EDGE ETF).

EDGE ETF provides investors with access to global companies that are involved in disruptive, innovation themes across a broad range of industries, including: FinTech, 5G, Genomics, Automobile Innovation, Robotics & Automation, Cloud Computing, Cyber Security, and E-Gaming & E-Sports. EDGE ETF provides equally weighted exposure to categories consisting of companies that are leading innovation across multiple sectors. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Layoffs Prevail in the Video Game Industry, But One Company Is Defying Odds

Posted on February 24, 2023December 19, 2023 by Veronica Carlasuc

The video game industry is witnessing significant layoffs.

Unity Software Inc., a game engine company, recently announced that it would be slashing its workforce by 284 employees. This is the second round of layoffs at the company in less than a year. Meanwhile, Playtika Holding Corp., held by the fund, let go of 600 employees in December and Riot Games, the developer of League of Legends, recently laid off employees in its publishing, recruiting, and esports departments.

The layoffs, however, are not necessarily a reflection of video game sales. Analysts believe the downsizing is largely related to the tech sector in general. During the pandemic, the tech industry hired waves of new people, who are now not needed thanks in large part to the new economic reality. The truth is that the video game industry isn’t recession-proof; it is reactive to markets just like so many other industries.¹

But despite all the recent bad news and layoffs, there is one giant in the industry defying the odds: Nintendo Co.

Nintendo Co. plans to increase its production of Nintendo Switch consoles after shipping nearly 21 million units over the last year. The company has advised its suppliers and assembly partners that it plans to produce more units starting in April. In November 2022, the company lowered its sales forecast for the console to 19 million units due to component shortages.²

COMPANY SPECIFIC UPDATES

Roblox Corp.

Roblox Corp. is a leader in offering digital immersive experiences to its users.

On January 17, the company reported some key metrics for December 2022. According to the report, daily active users jumped 18% to 61.5 million compared to December 2021, hours engaged were up 21% year-over-year, estimated books were between $430 million and $439 million, up 17% to 20% year-over-year, and the estimated average bookings per daily active user were between $6.99 and $7.14.³

It’s worth noting that activity and engagement measures are critical for companies like Roblox because more activity could result in higher revenue and ultimately higher profits.

Paradox Interactive AB

Paradox Interactive AB develops and publishes video games for PC, mobile, and consoles. Some of its brands include Stellaris, Age of Wonders, World of Darkness, Surviving Mars, Prison Architect, Europa Universalis, Hearts of Iron, and Crusader Kings.

After a nine-year hiatus, Paradox Interactive and Triumph Studios recently announced the release date for Age of Wonders 4. This video game will be available for PlayStation 5, Xbox Series X and S, and PC as of May 2, 2023.

Age of Wonders 4 will employ strategy RPG combat with turn-based combat. Players can create empires of their choosing and can also blend different cultural traits into their people who later engage in combat.⁴

Investing in Video Games with HERO ETF

Looking to invest in video games? Consider Canada’s first esports and egaming ETF, the Evolve E-Gaming Index ETF (HERO ETF). HERO ETF is an index-based exchange-traded fund that invests in the leading video game companies across the globe. To learn more about HERO ETF, please click here: https://evolveetfs.com/hero/.

HERO ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Netease Inc. made the largest contribution to the Fund, followed by Roblox Corp. and Take-Two Interactive Software. The largest detractors to performance for the month were Gumi Inc. followed by Capcom Co. and Digital Bros. On last rebalance, these securities were added to the portfolio: Webzen Inc. and Paradox Interactive AB.

For the latest information on investing in video games and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

D’Anastasio, C. and Papachristou, L., “Video Game Industry Feels Pain of Big Tech Job Cuts,” Bloomberg, January 20, 2023; https://www.bloomberg.com/news/newsletters/2023-01-20/video-game-industry-isn-t-immune-to-big-tech-job-cuts.
Mochizuki, T., “Nintendo Plans to Boost Switch Output to Meet Resilient Demand,” BNN Bloomberg, January 19, 2023; https://www.bnnbloomberg.ca/nintendo-plans-to-boost-switch-output-to-meet-resilient-demand-1.1872516.
“Roblox Reports December 2022 Key Metrics,” Roblox Corporation, January 17, 2023; https://ir.roblox.com/news/news-details/2023/Roblox-Reports-December-2022-Key-Metrics/default.aspx.
Dinsdale, R., “Age of Wonders 4 Announced, Arrives This Spring,” IGN, January 19. 2023; https://www.ign.com/articles/age-of-wonders-4-announced-arrives-this-spring.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cybersecurity Crimes Expected to Soar to $10.5 Trillion by 2050

Posted on February 22, 2023December 19, 2023 by Veronica Carlasuc

During the month of January, cybersecurity incidents were colossal. JD Sports, a sportswear chain, recently reported that the stored data of 10 million customers was at risk after a cyberattack. The company said the cybercriminal may have accessed names, addresses, email accounts, phone numbers, online order details between 2018 and October 2020, and the last four digits of customer bank cards.

Luckily, the hackers didn’t get full payment card details and account passwords were not accessed. Nonetheless, the company said that it is reaching out to customers who have been affected by this cybersecurity incident.¹

In a federal filing, T-Mobile US Inc. said that it had discovered a cybersecurity hack on January 5, 2023 wherein the cybercriminal obtained the data of 37 million customer accounts. The telecommunications provider said that the data hacked didn’t include payment information, passwords, or other sensitive personal data. The stolen data includes names, addresses, emails, and phone numbers of customers. It also includes account numbers and plan details.

T-Mobile said the investigation is still in progress and the hacker seems to have gained access through a single entry point serving customer data. The company revealed that it’s unlikely the hacker breached its systems or networks.²

As cybersecurity incidents become the norm, the outlook for what’s ahead seems dire. In the World Economic Forum’s (WEF) Global Security Outlook Report 2023, it’s highlighted that 93% of cyber leaders and 86 of cyber business leaders believe that the current geopolitical instability in the world is setting the stage for a catastrophic cybersecurity event in the next two years.

While presenting at WEF, Edi Rama, Albania’s prime minister, said that the cybercrime industry is growing significantly. It was worth $3.0 trillion in 2015 and is expected to be worth $10.5 trillion in 2025. If cybercrime was a country, it would be the third largest economy in the world just behind China and the U.S.³

COMPANY SPECIFIC UPDATES

Palo Alto Networks Inc.

Palo Alto Networks offers cybersecurity solutions including, but not limited to, firewall appliances and software, threat prevention, DNS security, Internet of Things security, and cloud security.

Recently, the company has been getting attention from analysts. JPMorgan Chase & Co. began coverage on shares of Palo Alto Networks, giving it an overweight rating and a $195.00 price objective on the stock.

Other research analysts have also weighed in on the company. Piper Sandler gave Palo Alto Network’s stock an overweight rating in its research note to clients and cut the price target from $230.00 to $220.00. In November 2022, MKM Partners dropped its price target on Palo Alto Network’s stock from $250.00 to $220.00 and gave it a buy rating.⁴

Absolute Software Corp.

Absolute Software Corp. is the only provider of self-healing intelligent cybersecurity solutions that offer its clients resilience against ransomware and malicious cyberattacks.

The company recently announced that it has entered a new commercial agreement with Aranda Software and IMTLazarus to provide Absolute Application Persistence-as-a-Service (APaaS). APaaS allows the integration of Absolute’s Application Resilience into software packages to keep application integrity above par and lower maintenance and deployment costs.

With this agreement and deploying Absolute Software’s solution, software providers will be able to monitor and automatically self-heal their mission-critical endpoint applications.⁵

Investing in Cybersecurity with CYBR ETF

If you’re looking to invest in a cybersecurity ETF, consider Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR). CYBR ETF invests in global companies involved in the cyber security industry. For more information, visit the fund page here: https://evolveetfs.com/cybr/.

CYBR ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Palo Alto Networks Inc. made the largest contribution to the Fund, followed by Zscaler Inc. and Okta Inc. The largest detractors to performance for the month were Booz Allen Hamilton Holding Corp., followed by Darktrace Plc and Arqit Quantum Inc. On last rebalance, the following companies were added to the fund: Hancom WITH Inc, KSIGN Co Ltd., and Absolute Software Corp.

For the latest information on cybersecurity investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

Race, M., “JD Sports says 10 million customers hit by cyber-attack,” BBC, January 30, 2023; https://www.bbc.com/news/business-64452986.
Larkin, C. and Starr, G., “T-Mobile Says Hacker Stole Data for 37 Million Customers,” BNN Bloomberg, January 19, 2023; https://www.bnnbloomberg.ca/t-mobile-says-hacker-stole-data-for-37-million-customers-1.1872465.
Newcomb, T., “A Catastrophic Mutating Event Will Strike the World in 2 Years, Report Says,” Popular Mechanics, January 25, 2023; https://www.popularmechanics.com/technology/security/a42660926/global-catastrophic-mutating-event-coming-in-2-years/.
“Palo Alto Networks (NASDAQ:PANW) Coverage Initiated at JPMorgan Chase & Co.,” Defense World, January 25, 2023; https://www.defenseworld.net/2023/01/25/palo-alto-networks-nasdaqpanw-coverage-initiated-at-jpmorgan-chase-co.html.
“Absolute Software Announces New ISVs Leveraging Application Persistence-as-a-Service,” Yahoo! Finance, February 2, 2023; https://finance.yahoo.com/news/absolute-software-announces-isvs-leveraging-130000354.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Innovations in Technology Continue into 2023

Posted on February 20, 2023December 19, 2023 by Veronica Carlasuc

Automobile Innovation

When referring to the electric vehicle market, the U.S. and China often get the most attention. That’s because both nations are experiencing an electric car boom right now. It’s worth noting, however, that electric vehicle adaptability is a global phenomenon as consumer tastes are changing and electric vehicles continue to gain in popularity.

For example, in 2022, four out of five cars sold in Norway were battery-powered and made by Tesla, Inc. According to the registration data, Tesla has been selling more electric vehicles in the country than any other brand—holding 12.2% of the market share. Volkswagen was second with 11.6% of the market share.

Overall, according to the Norwegian Road Federation, 79.2% of all new cars sold in Norway were electric in 2022. In 2021, this figure was just 65%. Meanwhile, a decade ago, electric vehicles consisted of just 2.9% of all new cars sold in the country.¹

Cybersecurity

Cloud Computing

On the surface, the cloud computing world seems to be going through a rough patch. Businesses that relied on cloud services during the pandemic are now trying to reduce expenses, which is affecting businesses in the cloud computing industry.

Recently, Microsoft Corporation, held by the fund and one of the leaders in cloud computing globally, said it will add OpenAI’s intelligence bot ChatGPT to its cloud-based Azure services soon. It has also been reported that Microsoft is taking a large stake in OpenAI, as well.

Microsoft announced the broad availability of its Azure OpenAI Service back in 2021, which has been available to limited customers. Adding OpenAI provides Azure’s customers with access to tools like the GPT-3.5 language system and Dall-E, a tool for generating images from text prompts. These tools can also be accessed by Azure’s customers in other applications running in the cloud.³

E-Gaming

The video game industry is witnessing significant layoffs.

But despite all the recent bad news and layoffs, there is one giant in the industry defying the odds: Nintendo Co. The company plans to increase its production of Nintendo Switch consoles after shipping nearly 21 million units over the last year. The company has advised its suppliers and assembly partners that it plans to produce more units starting in April. In November 2022, the company lowered its sales forecast for the console to 19 million units due to component shortages.⁵

5G

Verizon Communications Inc., one of the leading 5G providers in the U.S., recently reported its financial results for the fourth quarter of 2022. The company reported a net gain of 217,000 phone connections under post-paid billing plans, 41,000 post-paid subscribers, and added 176,000 new subscribers under its commercial division.

Verizon’s CEO, Hans Vestberg, said that, for the most part, customers are still paying on time and the company is seeing limited impact due to the macroeconomic environment.

During the quarter, Verizon also reported higher than expected spending on 5G buildout; however, the company has revealed that it expects spending to decrease over the next few years.

In terms of subscribers, Verizon is the largest U.S. cellphone carrier. But it has been losing ground to its rivals over the past few years. Companies like AT&T Inc. and T-Mobile US Inc. are making strong headway in 5G connections, as well.⁶

Robotics & Automation

The CES took place earlier in January in Las Vegas. After two years of relatively muted attendance, over 100,000 people attended and over 2,200 companies exhibited their products this year.

There were many noteworthy products in the field of robotics and automation, including the LG M3 Series 97-inch wireless OLED TV, a wireless TV with great picture quality, and the Samsung S95C, the first 77-inch TV by Samsung using its QD-OLED technology.

In addition, Mercedes and BMW revealed new technologies that could improve driver experiences. The BMW i Vision Dee is a concept car that doesn’t use a traditional dashboard screen. Instead, the windshield is used as the HUD and features an AR display that offers five levels of immersion. Meanwhile, the Mercedes-Maybach S-Class is one of the first cars using Dolby Atmos, a sound technology focused on fully immersing users in whatever they are listening to.

Other noteworthy technologies include the Withings U-Scan pee sensor, a device that collects urine, analyzes it, and sends the data to your phone via Wi-Fi, as well as the Schneider Smart Home System, a system that allows users to save money by controlling the breakers, switcher, and outlets so they can schedule when certain outlets draw power.⁷

Robotics & Automation — Source: Marketwatch.com

Fintech

Both Visa Inc. and Mastercard Inc. recently reported lower than expected purchase volumes for the last three months of 2022. This could be a sign that inflation is starting to curb consumer spending.

Visa reported that spending on cards increased by 1.7% to $3.01 trillion. Analysts were expecting this figure to be around $3.16 trillion. Mastercard’s spending volume rose 11% to $1.73 trillion. This was also lower than expected.

Both Fintech solutions providers have said that inflation hasn’t impacted consumers. They see consumers’ spending patterns changing—spending on low-cost items or generic brands is increasing. Furthermore, Visa and Mastercard have also said that they are witnessing a boom in travel and dining spending, and this could be due to pandemic-related restrictions easing globally.⁸

Genomics

The healthcare and biotech industries saw a large number of exciting advances in 2022. Not only did biochemists complete the sequencing of the human genome, but numerous new therapies, including a universal flu mRNA vaccine, are showing promising results.⁹

The outlook for 2023 is just as exciting. Both Eli Lilly and Novo Nordisk are making waves with a class of drugs known as incretins. Originally developed for diabetes treatments, the injectable incretins are the first drugs found to cause dramatic weight loss, allowing patients to lose an additional 15% to 20% of their weight.¹⁰

In addition, the bioinformatics industry—the application of tools of computation and analysis to the capture and interpretation of biological data—is expected to see a robust increase in the coming years. According to a report, the global bioinformatics market is expected to grow to $34.43 billion by 2027, representing a compounded annual growth rate of 18.16% between 2022 and 2027.¹¹

Genomics — Source: Biospace.com/article/careers-in-bioinformatics

Investing in EDGE ETF

Looking for a more diversified investment solution? The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5g, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/ or click here.

EDGE ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, the Evolve Automobile Innovation I Hedged Unit made the largest contribution to the Fund, followed by Evolve Cloud Computing Index Fd Hedged ETF Unit, and Evolve E Gaming Index ETF Hedged ETF Unit. The largest detractors to performance for the month were Genmab AS., followed by Intuitive Surgical Inc. and Beigene Ltd. On the last rebalance, these securities were added to the portfolio: BeiGene Ltd.

To stay updated with insights on investing and related investment products, sign up for our weekly newsletter here.

Sources:

Reuters, “Tesla in top spot in Norway’s race to EV goal,” Automotive News Europe, January 2, 2023; https://europe.autonews.com/automakers/tesla-top-spot-norways-race-ev-goal.
Newcomb, T., “A Catastrophic Mutating Event Will Strike the World in 2 Years, Report Says,” Popular Mechanics, January 25, 2023; https://www.popularmechanics.com/technology/security/a42660926/global-catastrophic-mutating-event-coming-in-2-years/.
Bass, D., “Microsoft to Add ChatGPT to Azure Cloud Services ‘Soon’”, Bloomberg, January 16, 2023; https://www.bloomberg.com/news/articles/2023-01-17/microsoft-azure-to-add-chatgpt-to-cloud-services.
D’Anastasio, C. and Papachristou, L., “Video Game Industry Feels Pain of Big Tech Job Cuts,” Bloomberg, January 20, 2023; https://www.bloomberg.com/news/newsletters/2023-01-20/video-game-industry-isn-t-immune-to-big-tech-job-cuts.
Mochizuki, T., “Nintendo Plans to Boost Switch Output to Meet Resilient Demand,” BNN Bloomberg, January 19, 2023; https://www.bnnbloomberg.ca/nintendo-plans-to-boost-switch-output-to-meet-resilient-demand-1.1872516.
Feuer, W. “Verizon Adds Subscribers as Earnings Guidance Falls Short of Forecasts,” Wall Street Journal, January 24, 2023; https://www.wsj.com/articles/verizon-vz-q4-earnings-report-2022-11674564502.
Franklin, E., “The Most Noteworthy Tech at CES 2023 We Couldn’t Ignore,” CNET, January 14, 2023; https://www.cnet.com/tech/the-most-noteworthy-tech-at-ces-2023-we-couldnt-ignore/.
Surane, J., “Visa, Mastercard see card spending slow as inflation persists,” BNN Bloomberg, January 26, 2023; https://www.bnnbloomberg.ca/mastercard-drops-as-card-spending-slows-hurting-revenue-growth-1.1875207.
Belan, M., “Timeline: The Most Important Science headlines of 2022,” Visual Capitalist, January 5, 2023; https://www.visualcapitalist.com/science-headlines-of-2022/.
Alpert, B., “Eli Lilly, Novo Nordisk Get a Share-Price Pop From Weight-Loss Drugs,” Barron’s, January 25, 2023; https://www.barrons.com/articles/eli-lilly-weight-loss-drugs-51674601558.
“Bioinformatics Market Size, Share, Growth Statistics By Top Key Players | Agilent Technologies, Genomatrix (Intrexon), Eurofins Scientific,” DigitalJournal, February 12, 2023; https://www.digitaljournal.com/pr/news/bioinformatics-market-size-share-growth-statistics-by-top-key-players-agilent-technologies-genomatrix-intrexon-eurofins-scientific.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Wearable Technology Market to Hit $385.8 Billion by 2030

Posted on February 17, 2023December 19, 2023 by Veronica Carlasuc

The Metaverse is a 3D interactive universe that spans augmented and virtual reality (AR/VR). But the key to bridging the material world and the virtual world is through wearable technology, such as virtual goggles, headsets, gloves, and eventually, sensor suits.

And wearable technology is going to be huge. According to one report, the wearable technology market is forecast to grow from $119.6 billion in 2021 to $385.8 billion in 2030, expanding at a compound annual growth rate of 13.9%.¹

Those companies with the biggest stronghold in the wearable technology department will have a big leg up on their competitors. For instance, the most popular VR headset is the Oculus Quest, developed by Facebook’s parent company Meta Platforms Inc. in 2019. In October 2022, the company teased a new wearable that users can control with their brains.²

In December, Meta announced it acquired Luxexcel, a Dutch startup specializing in smart eyewear. Financial terms were not disclosed; however, Luxexcel first made news when it used 3D printing to make prescription lenses for glasses. Today, its efforts are focused on smart lenses, which can be printed with LCDs and holographic film.³

After seven years of development, Apple is also expected to announce the launch of the “Reality Pro,” a mixed-reality VR headset this spring. The first deliveries are expected this fall, just in time for the holidays.⁴

NVIDIA Corporation and AI Software for Healthcare

NVIDIA Corporation said that its NVIDIA DGX SuperPOD and NVIDIA Clara are being used by VinBrain to detect abnormalities and accelerate the time it takes to diagnose with artificial intelligence (AI).⁵

VinBrain, a Vietnam-based health-tech startup, is the creator of DrAid, the only AI software for automated X-ray diagnostics in Southeast Asia, and among the first AI platforms to be cleared by the FDA to detect collapsed lungs via chest X-rays.

VinBrain is also building a number of other AI applications, including a telehealth product that analyzes lab test results, medical reports, and other electronic health records.

VinBrain is part of NVIDIA Inception, a global program designed to offer startups expertise, technology, and go-to-market support.

With the help of the program, VinBrain was able to launch DrAid Appliance, an on-premise, NVIDIA GPU-powered device for automatic screening of medical imaging studies that could improve doctors’ productivity by up to 80%, the team estimates.

NVIDIA’s computing technology accelerates and connects 3D worlds and workflows, enabling new ways to visualize, simulate, and code the metaverse.

PTC Inc and ServiceMax for Closed-Loop PLM

PTC Inc is a global technology company that provides its product lifestyle management (PLM) customers with software and professional services that enable the digital transformation of their products through computer-aided design (CAD), Industrial Internet of Things (IIoT), and Augmented Reality (AR).

The company recently announced it completed the $1.46 billion acquisition of ServiceMax, a developer of cloud-native field service management software. The acquisition is designed to strengthen PTC’s closed-loop product lifestyle management offerings.⁶

In fact, with this acquisition, PTC is the only company that can offer manufacturers a comprehensive view of their products at each stage of the lifecycle.⁷

Closed-loop PLM is a way to collect and extract useful information to better develop new product capabilities, improve business opportunities, and enhance communication between teams.

With regards to the metaverse, manufacturers and engineers could use PLM to communicate and collaborate more easily, allowing them to share designs, test products, and securely troubleshoot issues.

The technology could also be used in richly immersive 3D environments where “mixed reality” data is overlaid in the real world, allowing users to make use of real-time data in an industrial setting.

MESH ETF: Investing in the Metaverse

If you’re interested in investing in the metaverse, consider the Evolve Metaverse ETF (MESH ETF), Canada’s first metaverse ETF. MESH ETF provides investors with an actively managed diversified portfolio of companies involved in the development of the metaverse. To learn more about MESH ETF, please click here: https://evolveetfs.com/mesh/.

MESH ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Coinbase Global Inc made the largest contribution to the Fund, followed eXp World Holdings Inc, and NVIDIA Corporation. The largest detractors to performance for the month were Ubisoft Entertainment ADR, Activision Blizzard Inc, and Cisco Systems Inc. On the last rebalance, PTC Inc was added to the portfolio.

For more blogs like this, insight on investing, and updates on related investment products, sign up for our weekly newsletter.

Sources:

Wearable Technology Market Size, Share & Trends Analysis, By Product (Bodywear, Neckwear), By Device (Fitness, Smart Watches, Smart Glasses), By Application (Lifestyle, Consumer Applications, Entertainment), Region and Forecast Period 2022 – 2030,” Market Research Community, last accessed February 7, 2023; https://marketresearchcommunity.com/wearable-technology-market/?gclid=CjwKCAiAioifBhAXEiwApzCztkJILaJzfnuwAEL4QMK8t7KkZlqfZTLoCuFIWjqshrQfy33NGgMIGhoCJYAQAvD_BwE.
“Meta Connect Keynote 2022,” Meta Platforms Inc, October 11, 2022; https://www.youtube.com/watch?v=hvfV-iGwYX8.
Silberling, A., “Meta acquires Luxexcel, a smart eyewear company,” Tech Crunch, December 30, 2022; https://techcrunch.com/2022/12/30/meta-acquires-luxexcel-a-smart-eyewear-company/?guccounter=1.
Gurman, M., “Apple Will Talk Up Its Mixed-Reality Headset in 2023 But Not Much Else,” Bloomberg, January 8, 2023; https://www.bloomberg.com/news/newsletters/2023-01-08/when-will-apple-launch-the-reality-pro-mixed-reality-headset-apple-2023-devices-lcnfzkc7.
“Vietnam’s VinBrain Deploys Healthcare AI Models to 100+ Hospitals,” NVIDIA Corporation, February 7, 2023; https://blogs.nvidia.com/blog/2023/02/07/vietnam-vinbrain-deploys-healthcare-ai/,
“PTC Completes Acquisition of ServiceMax, January 4, 2023; https://investor.ptc.com/resources/news/news-details/2023/PTC-Completes-Acquisition-of-ServiceMax/default.aspx.
“PTC To Acquire ServiceMax To Bolster Field Service Management,” CRN, November 18, 2022; https://www.crn.com/news/software/ptc-to-acquire-servicemax-to-bolster-field-service-management.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

A Look at the Healthcare Industry in 2022 and What’s in Store for 2023

Posted on February 15, 2023December 19, 2023 by Veronica Carlasuc

The healthcare and biotech industries faced numerous headwinds in 2022. The pandemic continued to make headlines with a huge surge in COVID-19 infections in China. Viruses including monkey pox, flu, and Respiratory Syncytial Virus (RSV) infection rates were also unexpectedly high.¹

It wasn’t all bad news in 2022. The healthcare and biotech industries saw a large number of exciting advancements. Here are some of the discoveries that made headlines in 2022.²

A heart from a genetically modified pig is transplanted into a human for the first time
Epstein-Barr virus is suggested as the leading cause of multiple sclerosis
Laparoscopic surgery is performed entirely by a robot for the first time
Biochemists complete the sequencing of the human genome
Scientists 3D print an ear from a patient’s own cells
Scientists invest an organ perfusion system that can restore multiple vital organs after death
A cornea made from pig skin is shown to restore sight to blind people
Numerous new therapies including a universal flu mRNA vaccine show promising results

The outlook for 2023 is just as exciting. Both Eli Lilly and Novo Nordisk, which are held by the fund, are making waves with a class of drugs known as incretins. Originally developed for diabetes treatments, the injectable incretins are the first drugs found to cause dramatic weight loss, allowing patients to lose an additional 15% to 20% of their weight.³

This has led analysts to project eventual annual sales of tens of billions of dollars for the class, as the U.S. and other countries battle widespread obesity.

New prescriptions of Novo Nordisk’s Wegovy are growing more than 60% year-over-year, meanwhile new prescriptions for Eli Lilly’s two incretins—Mounjaro and Trulicity—are up nearly 300%. Since Mounjaro’s May 2022 approval, the Eli Lilly injectable has captured 25% of the category’s new prescriptions.

In addition to obesity and diabetes breakthroughs, intriguing breakthroughs in 2023 could include a diabetes drug for Parkinson’s disease, treatments for ovarian cancer, clinical trials on Lecanemab for Alzheimer’s, and gene editing for sickle-cell disease.⁴

COMPANY SPECIFIC UPDATES

Medtronic plc

Medtronic plc recently announced the first patient enrolled in the Expand URO U.S. clinical trial for the Hugo robotic-assisted surgery (RAS) system. The robotic-assisted prostatectomy procedure was performed at Duke University Hospital in Durham, N.C.⁵

Minimally invasive surgery, including robotic-assisted surgery, offers fewer complications, shorter hospital stays, faster return to normal activities, and smaller scars. Urological procedures are one of the most commonly performed with a surgical robot. The Hugo RAS system is intended to be used, in this study, for urologic surgical procedures including radical prostatectomy, radical cystectomy, and nephrectomy procedures.

Up to 122 patients will be enrolled in the study at six sites across the U.S. The Hugo RAS system is commercially available in certain geographies. In the U.S., the Hugo RAS system is an investigational device and is not yet for sale.

The Hugo Robotic Assisted Surgery system is a modular, multi-quadrant platform that includes wristed instruments, 3D visualization, and a cloud-based surgical video capture option. (CNW Group/Medtronic Canada ULC) — Source: mma.prenewswire.com/media

CSL Limited

CSL Limited announced that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) has recommended conditional marketing authorization of etranacogene dezaparvovec, under the brand name HEMGENIX.⁶

HEMGENIX is a one-time gene therapy for the treatment of hemophilia B in certain adults. A single infusion of etranacogene dezaparvovec reduces the rate of annual bleeds.

People with Hemophilia B, which is a life-threatening disease, are vulnerable to bleeds in their joints, muscles, and internal organs, leading to pain, swelling, and joint damage. Current treatments for moderate to severe hemophilia B include life-long infusions to temporarily replace or supplement low levels of the blood-clotting factor.

If the marketing authorization of HEMGENIX is approved by the European Commission, etranacogene dezaparvovec would be the first gene therapy for people living with hemophilia B in the European Union and European Economic Area.

Healthcare ETFs — Source: Getty stock photo

Investing in Healthcare with LIFE ETF

The Evolve Global Healthcare Enhanced Yield Fund (TSX Ticker: LIFE), LIFE ETF, is a convenient way to gain access to some of the world’s largest healthcare companies in one single investment solution.

LIFE ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Siemens AG made the largest contribution to the Fund, followed by CSL Limited and Medtronic PLC. The largest detractors to performance for the month were Pfizer Inc., AbbVie Inc, and Johnson & Johnson. By weight, the Fund’s largest geographic exposure was to the United States, followed by Germany and Britain.

For more information about LIFE ETF, please visit https://evolveetfs.com/life/.

For the latest information on investing in healthcare and updates on related investment products, sign up for our weekly newsletter here.

Sources:

Schnirring, L., “US flu levels climb as RSV swamps kids’ hospitals,” University Of Minnesota, November 11, 2022; https://www.cidrap.umn.edu/influenza-general/us-flu-levels-climb-rsv-swamps-kids-hospitals.
Belan, M., “Timeline: The Most Important Science headlines of 2022,” Visual Capitalist, January 5, 2023; https://www.visualcapitalist.com/science-headlines-of-2022/.
Alpert, B., “Eli Lilly, Novo Nordisk Get a Share-Price Pop From Weight-Loss Drugs,” Barron’s, January 25, 2023; https://www.barrons.com/articles/eli-lilly-weight-loss-drugs-51674601558.
Arnold, C. and Webster, P., “11 clinical trials that will shape medicine in 2023,” Nature, December 23, 2022; https://www.nature.com/articles/s41591-022-02132-3#Sec1.
“Medtronic announces first patient enrolled in U.S. clinical trial for Hugo™ robotic-assisted surgery system,” Medtronic plc, December 15, 2022; https://news.medtronic.com/2022-12-15-Medtronic-announces-first-patient-enrolled-in-U-S-clinical-trial-for-Hugo-TM-robotic-assisted-surgery-system.
“CSL Receives Positive CHMP Opinion for Etranacogene Dezaparvovec – Gene Therapy for Adults with Hemophilia B,” CSL, December 16, 2022; https://newsroom.csl.com/2022-12-16-CSL-Receives-Positive-CHMP-Opinion-for-Etranacogene-Dezaparvovec-Gene-Therapy-for-Adults-with-Hemophilia-B.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

What Is Artificial Intelligence and How Will It Change the Investment Landscape?

Posted on February 15, 2023December 19, 2023 by Veronica Carlasuc

In 1956, John McCarthy, an American computer scientist at Dartmouth College, coined the term Artificial Intelligence (AI). At the time, he defined it as “the science and engineering of making intelligent machines.”

Today, we understand AI as a way in which computers are able to problem solve and interpret data through statistical analysis, allowing them to understand, analyze, learn, and act based on past experience and data.

How Is Artificial Intelligence Used?

AI is used to build robots, tools, bots, and agents that can predict, and act on, human behaviour. Tesla’s autonomous vehicles and Siri are just two recent examples of AI. It took us a while, though, to get to a point where AI has everyday applications.

In 1970, Marvin Minsky, a fellow computer scientist, believed that machines with the general intelligence of an average human being would exist within the next few years. While computers were evolving, they were still a long way away from achieving the end goal of natural language processing, abstract thinking, and self-recognition.

It wasn’t until the 1990s that AI began to thrive, with many ground-breaking AI achievements. In 1997, Gary Kasparov, the reigning world chess champion and grand master, was defeated by IBM’s Deep Blue, a chess computer program. That same year, speech recognition software developed by Dragon Systems, was implemented on Windows.

Interestingly, the further growth and adoption of AI hasn’t hinged on our ability to understand AI on a deeper basis. In fact, the actual coding of AI hasn’t changed. What has precipitated the broad-based adoption, evolution, and limitless applications of AI is the limit of storage capacity.

Moore’s Law, which suggests that the memory and speed of a computer doubles every year, has finally caught up with, and surpassed our needs. Today, we live in a world of big data, an age where AI and machine learning (ML), deep learning, and natural language processing (NLP) have transformed a wide variety of industries, such as technology, logistics & transportation, healthcare, manufacturing, advertising, banking, finance, and investing.

Examples where AI is rapidly changing the way we live includes self-driving cars, maps & navigation, smart cities, facial recognition & detection, digital assistants, robotics, social media, and robo-advisors for investments.

How Will AI Impact the Investment Landscape?

Besides enhancing productivity, AI also helps businesses reduce their costs. AI is already widely used in all kinds of regulatory bodies, on both the federal and banking levels. In addition to being used to detect fraud, AI is being used to streamline the loan application process. Big banks and financial institutions are using AI to improve customer service and help customers solve their problems quickly.

AI can also help the average investor. The most popular investment strategy is to “buy low, sell high.” It makes sense, the point of investing is to make money. Unfortunately, emotions play a big role in the way we invest. That’s because no one can predict what will happen in the market. And that uncertainty combined with the fear of missing out, can make investors act irrationally.

Because of the way our brains are wired, we cannot separate our emotions from objective financial decision making. As a result, investors tend to follow the heard and buy high, sell low. It’s difficult to go against the natural “fight or flight mentality.”

But that’s exactly what Warren Buffet says investor should do. During the depths of the 2008 Great Recession, the Oracle of Omaha said, “Be fearful when others are greedy, and be greedy when others are fearful.”

AI can help investors be more like Warren Buffet because AI does not have to separate emotion from decision making. Well-written AI can help investors make objective decisions based on logic and data, past trends, future predictions, world affairs, and even the weather.

One of the biggest impacts AI will have on the investment landscape is the ability to make better decisions. AI is not flawless, it still has to contend with emotional investors, but it is far better than humans at making informed, educated decisions.

AI can do what we will never be able to do, and that’s process massive amounts of information instantly and make predictions based on that data.

In helping investors make better decisions, the mass adoption of AI should help the markets be less volatile over long periods of time. AI cannot eradicate volatility, not even AI can predict every Black Swan event.

While AI has been with us for decades, it’s still in its infancy with regards to investing, but its already helping us discover new ways to eliminate costly feelings of doubt and remove human emotions from the equation.

What Is the Best Way to Invest in Innovation?

Innovation is a long-term, key driver of global economic growth. One way that investors can tap into disruptive and innovative trends that are fundamentally transforming our world is through an exchange traded fund (ETF).

The Evolve Innovation Index Fund (TSX: EDGE) provides investors with access to global companies that are involved in disruptive, innovation themes across a broad range of industries, including: FinTech, 5G, Genomics, Automobile Innovation, Robotics & Automation, Cloud Computing, Cybersecurity, and E-Gaming & E-Sports.

EDGE provides equally weighted exposure to categories consisting of companies that are leading innovation across multiple sectors.

Rebalanced quarterly, some of the biggest holdings in the Evolve Innovative Index Fund include Shopify Inc. (TSX:SHOP), NVIDIA Corporation (NASDAQ:NVDA), Fortinet Inc (NASDAQ:FTNT), Intuitive Surgical, Inc. (NASDAQ:ISRG), and Mettler-Toledo International Inc (NYSE:MTD).

Investing in EDGE ETF

Looking for a more diversified investment solution? The Evolve Innovation Index Fund (EDGE ETF)is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5g, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/.

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The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cloud Computing Industry Faces Some Headwinds

Posted on February 13, 2023December 19, 2023 by Veronica Carlasuc

For instance, after a large hiring influx during the pandemic, Salesforce Inc., a cloud-based software firm that is held by the Fund, recently revealed that the company will now cut 10% of its workforce and close some of its offices in Canada. This would result in about $1.4 billion to $2.1 billion in charges for the company. Currently, Salesforce employs 1,800 people and has offices in Toronto, Vancouver, and Halifax.¹

Amazon.com has also been laying off a large number of employees. At last count, the retailer and parent company of Amazon Web Services (AWS) was planning to cut its workforce by 18,000 employees. These cuts have been primarily in retail, human resources, and other departments.

For the most part, Amazon.com’s cloud computing unit, AWS, has been spared from the layoffs. Full-time workers at AWS have been relatively unaffected, while contractors were let go.²

However, it’s not as bad as it seems. There are some positive developments in the cloud computing industry, as well.

Recently, Microsoft Corporation, held by the Fund and one of the leaders in cloud computing globally, said it will add OpenAI’s intelligence bot ChatGPT to its cloud-based Azure services. It has also been reported that Microsoft is taking a $10 billion stake in OpenAI.

COMPANY SPECIFIC UPDATES

SAP SE, Expanding Into Cloud

SAP SE, known for its enterprise application solutions globally, is also an emerging cloud computing company. In an interview with CNBC Squawk Box Europe, SAP chief Christian Klein said that the world is entering into a new phase of globalization where companies will focus on building stronger supply chains and work to improve their sustainability credentials.

Regarding the company’s outlook, Klein added that he’s optimistic.

He also mentioned that SAP’s shift away from traditional computing infrastructure and expansion into cloud computing has helped grow the company, and as a result, it is in a very strong position. Furthermore, the company may not be as affected by economic headwinds as other companies in the tech industry since SAP is more focused on cloud computing and recurring revenue streams.⁴

However, the company recently announced that it will cut 3,000 jobs or 2.5% of its workforce. The company also said it will explore the sale of its remaining investment in Qualtrics—an experience management company.⁵

SAP in Cloud Computing — Source: esds.co.in/blog/sap-in-cloud-computing

Descartes Systems Group Inc, Adding a New Cloud Customer

Descartes Systems Group Inc. engages in providing cloud-based logistic and supply chain management solutions with a focus on improving productivity, performance, and security.

The company recently announced that it added Topps Tiles—a leading U.K. tile retailer with 300 stores, as a customer. The retailers will use Descartes’ cloud-based route planning and optimization solutions.

While explaining the advantages of Descartes’ solutions, Simon Macdonald, National Transport Manager of Tops Tiles, said that the company has replaced manual and spreadsheet-based processes with automated route planning. The company’s solutions are also helping Topps Tiles to build delivery scenarios and make more informed strategic decisions—something that’s impossible with traditional analytics methods.⁶

Investing in the Cloud with Evolve ETFs

Cloud Computing is transforming the global economy. Over the past decade, the Cloud has fundamentally changed the way businesses and individuals access data. From physical servers to portable drives, the Cloud has helped eliminate the need to store information on-premise. For more information visit the fund page here: https://evolveetfs.com/data/.

DATA ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Salesforce Inc. made the largest contribution to the Fund, followed by Amazon.com Inc. and SAP SE. The largest detractors to performance for the month were Zoominfo Technologies Inc., followed by Vmware Inc. and Coupa Software Inc. On the last rebalance, these securities were added to the portfolio: Coupa Software Inc., Descartes Systems Group Inc., and UiPath Inc.

For the latest information on investing in cloud computing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

“Salesforce ‘hired too many people,’ will lay off 10 per cent of workforce,” CBC, January 4, 2023; https://www.cbc.ca/news/business/salesforce-layoffs-ten-per-cent-1.6703586.
Moss, S., “AWS employees among latest round of Amazon layoffs impacting 18,000 staff,” DCA, January 19, 2023; https://www.datacenterdynamics.com/en/news/aws-employees-among-latest-round-of-amazon-layoffs-impacting-18000-staff/.
Bass, D., “Microsoft to Add ChatGPT to Azure Cloud Services ‘Soon’”, Bloomberg, January 16, 2023; https://www.bloomberg.com/news/articles/2023-01-17/microsoft-azure-to-add-chatgpt-to-cloud-services.
Browne, R., “SAP CEO says the world is entering the ‘next phase of globalization’”, CNBC, January 17, 2023; https://www.cnbc.com/2023/01/17/sap-ceo-says-the-world-is-entering-the-next-phase-of-globalization.html.
Knolle, K. and Mukherjee, S., “SAP to cut 3,000 jobs, explore Qualtrics stake sale,” Reuters, January 26, 2023; https://www.reuters.com/technology/sap-cut-3000-jobs-efficiency-move-explores-qualtrics-stake-sale-2023-01-26/.
“Topps Tiles Transforms Fleet Delivery Operations and Strategic Modelling with Descartes’ Route Optimisation Solution,” Yahoo! Finance, January 23, 2023; https://finance.yahoo.com/news/topps-tiles-transforms-fleet-delivery-114500613.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Electric Vehicle Sales Are on the Rise as Competition Heats Up

Posted on February 10, 2023December 19, 2023 by Veronica Carlasuc

When referring to the Electric Vehicle (EV) market, the U.S. and China often get the most attention. That’s because both nations are experiencing an electric car boom right now. It’s worth noting, however, that Electric Vehicle adaptability is a global phenomenon as consumer tastes are changing and EVs continue to gain in popularity.

For example, in 2022, four out of five cars sold in Norway were battery-powered and made by Tesla, Inc. According to the registration data, Tesla has been selling more EVs in the country than any other brand—holding 12.2% of the market share. Volkswagen was second with 11.6% of the market share.

With EV sales surging worldwide, there is a lot more competition in the EV sector now than ever before. Due to the increase in competition and a global recession looming on the horizon, Tesla recently decided to lower the price of its Model 3 and Model Y vehicles—its best-selling electric cars around the world.

It’s believed that this move could help protect Tesla’s market share and keep the company’s growth trajectory as global economic headwinds get stronger.

Tesla’s EV prices were lowered in some of the company’s key markets such as the U.S., China, and Germany where the price cuts amounted to anywhere between one percent and 20%.

In China, Tesla has lowered its prices two times in the last three months. In Japan and South Korea, the electric car maker reduced its price by 10%.²

electric vehicles — Source: Insideevs/norwayelectriccarsalesdec2022

Updates on EV Manufacturers

Lucid Group’s Shares

Lucid Group designs, engineers, and builds electric vehicles, powertrains, and battery systems. Recently, Lucid Group’s shares soared as much as 88% in a single day and were repeatedly halted due to such large price fluctuations following speculation that Saudi Arabia’s Public Investment Fund (PIF) is considering buying a remaining stake in the company. The PIF already owns 65% of Lucid.

Garrett Nelson, VP and senior equity analyst at CFRA Research, said that if the PIF does buy all the shares, it’s likely it will fix the operational issues at the company, and that will help in the long term. In 2022, the company only produced 7,189 vehicles. This amounts to approximately 38 electric vehicles per day. In comparison, during the fourth quarter of 2022, Tesla produced 4,779 electric vehicles per day.³

Mullen Automotive’s Electric Cargo Vans

Mullen Automotive Inc. is headquartered in Brea California. It is an emerging electric vehicle manufacturer that focuses on passenger and commercial vehicles. Mullen Automotive also provides solid-state polymer battery technology.

Just recently, the company announced a pilot program involving its Class 1 electric cargo vans with Menzies Aviation and Loop Global Inc. at the Los Angeles International Airport (LAX). It will be a 60-day pilot program where Menzies Aviation will evaluate the Class 1 cargo vans across its operations at LAX. Menzies Aviation is the world’s largest aviation services company with operations at 250+ airports in 58 countries and 8,000 vehicles in its global fleet.

In this pilot program, Loop Global will provide charging infrastructure and fleet operations software to service Mullen’s vans through its electric vehicle fleet as-a-service (EVFaaS) program. Furthermore, Loop Global’s cloud-based Charger Management System (CMS) will enable Menzies Aviation to charge Mullen’s electric vehicles between each shift at LAX.⁴

Investing in Auto Innovation with CARS ETF

If you’re looking to invest in an electric vehicle ETF, consider Canada’s first automobile innovation ETF, Evolve Automobile Innovation Index Fund (TSX Ticker: CARS). CARS ETF invests in global companies that are directly or indirectly involved in developing electric drivetrains, autonomous driving or network-connected services for automobiles. Shift your investments into gear with CARS in your portfolio. For more information on this fund, please click here: https://evolveetfs.com/cars/

CARS ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Lucid Group Inc. made the largest contribution to the Fund, followed by Fluence Energy Inc. and Evgo Inc. The largest detractors to performance for the month were Ess Tech Inc., followed by Canoo Inc., and Renault SA. On last rebalance, these securities were added to the portfolio: Mullen Automotive Inc. and Renault SA.

For more blogs like this, insight on investing and investment products, sign up for our weekly newsletter

Sources:

Reuters, “Tesla in top spot in Norway’s race to EV goal,” Automotive News Europe, January 2, 2023; https://europe.autonews.com/automakers/tesla-top-spot-norways-race-ev-goal.
King, H., “What’s behind Tesla’s drastic price cuts,” Axios, January 16, 2023; https://www.axios.com/2023/01/16/tesla-price-cuts-elon-musk.
Ferré, I., “Lucid stock soars amid Saudi buyout speculation,” Yahoo! Finance, January 27, 2023; https://finance.yahoo.com/news/lucid-stock-soars-amid-saudi-buyout-speculation-212055245.html.
“Mullen Automotive, Loop Global and Menzies Aviation Pilot New Electric Vehicles and Charging Infrastructure at Los Angeles International Airport,” Yahoo! Finance, February 2, 2022; https://finance.yahoo.com/news/mullen-automotive-loop-global-menzies-150000405.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Materials and Mining, at the Core of Technology, Industrial, and Energy Transition

Posted on February 8, 2023February 15, 2023 by Veronica Carlasuc

Materials and mining stocks are critical to the global economy, with raw materials and the manufacturing of chemicals used to build and manufacture goods, products, construction materials, and infrastructure. But the acceleration to net zero and a more digitized economy means the demand for metals and materials is expected to soar over the coming decades.

What Do Materials and Mining Companies Do?

Materials companies are engaged in the discovery, development, and processing of raw materials used in steelmaking, farming, and construction.

The primary metals extracted by materials and mining companies include precious metals such as gold, platinum, and silver and industrial metals including iron ore, coal, copper, and uranium.

New technological demand also requires a massive quantity of rare earth elements (REEs).

REE elements refer to a group of 17 elements with diverse applications used in electrical components, EV batteries, glass, lasers, x-rays, fiber optics, infrared lasers, stainless steel, nuclear medicine, cameras, smartphones, catalytic converters, wind turbines, and electric vehicles (EVs). Some REEs are also the cornerstone of military equipment like missile guidance systems.

The Materials and Mining Sector Is Reshaping the Modern World

While fossil fuels helped drive the economy and improve the standard of living around the world over the last 300 years, the associated greenhouse gas emissions have led global governments to adopt or try to adopt a net zero economy by the middle of this century.

It will take a lot of effort to get there and can only be achieved by huge input from materials and mining companies. That’s because a greener economy – which includes solar photovoltaic (PV) plants, wind farms, electric vehicles (EVs), geothermal, hydro, bioenergy, and electricity networks – is more mineral-intensive than the one that is based on fossil fuels. And that transition will be a great opportunity for the materials and mining sector.

For example, the typical electric car requires six times the mineral inputs of a car with an internal combustible engine. While the EV industry is still in its infancy, EVs and battery storage have already surpassed consumer electronics as the largest consumer of lithium and are poised to surpass stainless steel as the largest end-user of nickel by 2040. Over the near term, by 2026, EVs will account for half of all cobalt demand.

By 2040, lithium will experience the fastest growth, with demand jumping by over 40 times, followed by graphite, cobalt, and nickel. That explains why the demand for rare earth minerals used in EVs and battery storage will grow at least 30 times by 2040.

Electricity networks will need a massive amount of copper and aluminum. The development of electricity networks means the copper demand for grid lines will more than double by 2040.

Meanwhile, an onshore wind plant requires nine times more mineral resources than one that is gas-fired. Generating one terawatt-hour of electricity from solar and wind could, respectively, consume 300% and 200% more metals than generating the same amount of terawatt-hours from a gas-fired power plant.

These developments will fuel rising demand for battery metals, rare earths, copper, and iron ore. The move toward newer technologies will put the materials and mining sector to the test. Over the coming decades, it needs to provide huge quantities of raw materials to meet the needs of energy, technology, and industrial transitions. As a result, these companies will need to grow faster, become more efficient, and be cleaner.

What Is the Best Way to Invest in the Materials and Mining Sector?

When it comes to the materials and mining sector, there are two primary ways you can invest: purchase shares in a large number of different stocks or purchase an exchange-traded fund (ETF) with diversified exposure to the most well-known companies involved in materials and mining.

Buying enough individual stocks to create a diversified materials and mining portfolio could take thousands of dollars. Alternatively, investors could consider the Evolve Global Materials & Mining Enhanced Yield Index ETF (TSX: BASE).

BASE ETF seeks to replicate the performance of the Solactive Materials & Mining Index while mitigating downside risk by utilizing covered calls on up to 33% of the portfolio securities. BASE ETF invests directly or indirectly in equity securities of global issuers engaged in the manufacturing, mining, and/or integration of metals and materials. It has a weighted average market cap of $57 billion (as at January 31, 2023), has a target yield of 7.00%*, and 20 holdings in the portfolio.

Two of the biggest holdings in the fund include BHP Group Limited and Steel Dynamics, Inc.

Melbourne, Australia-based BHP Group Limited is a global resource company with operations in over 90 locations worldwide. From the iron ore and metallurgical coal that creates steel for construction, to the nickel powering electric vehicles, and the copper enabling the next generation of renewable infrastructure, BHP Group’s products are the building blocks of the modern world.

Steel Dynamics, Inc. is one of the largest and most differentiated steel producers and metal recyclers in North America, with facilities located throughout the U.S. and Mexico. The Fort Wayne, Indiana-based company is the fourth largest steel producer in North America, the largest metals recycler, and the second largest joist-deck producer. The company’s products are used in appliance, automotive, energy, equipment & mining, heavy non-residential, light commercial/residential, manufacturing, metal building industries, and transportation & rail.

Materials and mining stocks are poised to gain traction over the coming years and decades thanks in large part to strong demand for a greener, net zero economy that is heavily reliant on minerals.

A materials and mining ETF like the Evolve Global Materials & Mining Enhanced Yield Index ETF can help diversify portfolios and tap into the ongoing global growth of a greener, digitized economy.

Invest in the Materials and Mining Sector With Base ETFs

If you’re looking for better yields in the materials and mining sector, consider BASE ETF, Evolve Global Materials & Mining Enhanced Yield Index ETF. BASE ETF invests in global companies involved in the material and mining industry. For more information, visit the fund page here: https://evolveetfs.com/base/.

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter.

*Estimate only. Actual yield changes daily based on market conditions. Target yield is gross of MER.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Video Game Market Overview for 2022

Posted on February 3, 2023December 19, 2023 by Veronica Carlasuc

The years 2020 and 2021 were some of the best years for the video game market. Sadly, 2022 didn’t really live up to the expectations. It started off on a shaky ground, and throughout the year, there were significant headwinds.

According to Newzoo’s analysis for 2022, the video game market was expected to only generate $184.4 billion, which indicates a year-over-year decline of 4.3% in revenue. In addition, the mobile game market was only expected to generate revenue of $92.2 billion, representing a decline of 6.4% from the year prior.

The mobile game market was largely affected by privacy developments for iOS users, as well as a shift in consumer priorities in 2022 after the lockdowns ended and disposable income becoming tighter with heightened inflation.

But it isn’t all negative: the sweetest spot within the video game market was Virtual Reality (VR) installs and cloud gaming.

In 2022, the VR install base grew to 27.7 million and is expected reach 46.0 million by 2024. Revenue for this portion of the video game market is expected to surge from $1.8 billion to $3.2 billion.

Cloud gaming is also seeing some encouraging developments with 20 million paying users that spent an estimated $2.4 billion on cloud gaming services in 2022.¹

COMPANY SPECIFIC UPDATES

Activision Blizzard and Microsoft

In January 2022, Activision Blizzard Inc. was given an offer of acquisition from Microsoft Corporation for $68.7 million. The deal was expected to close in June 2023 and represented one of the biggest deals in the video game industry.

However, recently the Federal Trade Commission (FTC) has filed an antitrust case against Microsoft, citing that the deal would violate U.S. law. In the complaint, the FTC said that with Activision Blizzard’s content, Microsoft would essentially reduce the competition and could impact product quality, price, and innovation. Ultimately, less competition would hurt consumers.

In a memo to employees, Bobby Kotick, Activision Blizzard’s CEO, said that this deal being anti-competitive doesn’t hold true to facts. He insisted that it’s for employees, competition in the industry, and players.²

JOYCITY and Hasbro

JOYCITY Corporation engages in developing video games across all platforms globally. Some of the company’s flagship video games include Pirates of the Caribbean: Tides of War, Gunship Battle: Total Warfare, and Game of Dice.

On December 21, 2022, JOYCITY announced that it is collaborating with Hasbro, Inc. to bring G.I. JOE to the Gunship Battle: Total Warfare game. It will be a follow-up to its popular COBRA-themed collaboration. This collaboration is expected to bring G.I. JOE-themed equipment and characters to the game. Players can get the iconic “Skystriker” Jet and participate in a Gunship Battle: Total Warfare x G.I. JOE storyline.³

HERO ETF: Investing in the Growing Gaming Industry

Interested in a diversified approach to investing in video games? Evolve E-Gaming Index ETF (TSX Ticker: HERO) may be the right investment for you. HERO ETF gives investors access to equity securities of companies, listed domestically and globally, with business activities in the gaming industry. This ETF invests in companies involved in hardware, software and services relating to the electronic gaming industry. Learn more about this fund by clicking here.

HERO ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Activision Blizzard Inc. made the largest contribution to the Fund, followed by Netmarble Corp. and Netease Inc. The largest detractors to performance for the month were Krafton Inc. followed by Electronic Arts Inc. and Roblox Corp. On last rebalance, these securities were added to the portfolio: JOYCITY Corp., Neptune Co., Drecom Co Ltd., Gumi Inc., and Netronix Inc.

For the latest information on investing in video games and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

Wijman, T., “The Games Market in 2022: The Year in Numbers,” Newzoo, December 21, 2022; https://newzoo.com/insights/articles/the-games-market-in-2022-the-year-in-numbers.
Novet, J., “FTC sues to block Microsoft’s acquisition of Activision Blizzard,” CNBC, December 8, 2022; https://www.cnbc.com/2022/12/08/ftc-sues-to-block-microsofts-acquisition-of-game-giant-activision-blizzard.html.
“Gunship Battle: Total Warfare x G.I. JOE Unleash the Biggest Game Event of the Year,” Games Press, December 21, 2022; https://www.gamespress.com/Gunship-Battle-Total-Warfare-x-GI-JOE-Unleash-the-Biggest-Game-Event-o.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Interest Rate Hikes Good News for Canadian Banks

Posted on February 1, 2023February 24, 2023 by Veronica Carlasuc

We will remember Fiscal Year 2022 for both rapidly rising inflation and unprecedented interventions by the Bank of Canada to rein it in. The central bank raised interest rates a record seven times from late 2021, boosting lending rates a total of 400 basis points.¹

While rising interest rates are generally a drag on the stock market’s performance, banks work differently. For Canada’s banks—and for those who invest in them—a rising rate environment can have positive benefits for improved revenue growth and rising valuations. As we enter an era of higher overall interest rates, the potential for returns on investments in Canada’s banking sector has never been better.

How banks benefit from rising interest rates

In general, rising interest rates are good news for banks because, unlike many other types of companies, they can grow their profit margins during periods of rising interest rates.

Banks profit from two main sources of income: revenue from lending (interest-based income) and revenue from non-interest-based income like insurance and wealth management.²Banks are asset-sensitive businesses, with the assets on their books re-pricing higher faster than their liabilities.³

As a result, in high-rate environments, the increased yields from things like commercial and residential mortgages mean that banks get a boost from their interest-based income streams. And the bigger the percentage of a bank’s income derived from interest-based sources, the more profitable that bank can be as interest rates climb.⁴

In fact, profitability for banks is often at its highest in a rising-rate environment coupled with a still-growing economy.⁵

How Canadian banks performed in 2022

Given the potential benefits of a high-rate environment for banks, how did Canada’s banking industry fair during last year’s rate increases?

If we look at the performance of Canada’s Big 6 banks as a proxy for the entire sector, we can very easily see that, overall, 2022 was a good year for Canada’s banks.

A recent report from KPMG on the full-year performance of Canada’s Big 6 banks in 2022 highlighted that, in terms of top-line growth, aggregate total revenue for the Big 6 was $194.6 billion—up 9.2% from FY 2021.⁶Of this, $102 billion was net interest income (an increase of 11.3% from the previous year) and $92.6 billion was non-interest income (an increase of 5.1% from the year before).⁷

While there are a number of unknowns and potential headwinds for the banking sector in 2023, Geoffrey Rush, KPMG’s Financial Services National Industry Leader, says that in light of their 2022 financial results, “Canada’s 6 major banks are well positioned to deal with such economic uncertainties should they happen.”⁸

Investing in Canadian banks with BANK ETF

Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund (TSX Ticker: BANK) provides investors with an enhanced yield from exposure to Canada’s largest banks and insurance companies through a covered call strategy applied on up to 33% of the portfolio and 25% maximum leverage. Covered call options have the potential to provide extra income and help hedge long stock positions.

For more information on BANK ETF, visit the fund page here: https://evolveetfs.com/bank/.

Sources:

¹https://assets.kpmg.com/content/dam/kpmg/ca/pdf/2023/01/canadian-banking-2022-year-end-results-en.pdf

²https://www.theglobeandmail.com/investing/investment-ideas/number-cruncher/article-ten-canadian-banks-poised-to-benefit-from-rising-rates/

³https://www.dbrsmorningstar.com/research/388109/a-closer-look-at-the-impact-of-rising-rates-on-canadian-banks-profitability

⁴https://www.theglobeandmail.com/investing/investment-ideas/number-cruncher/article-ten-canadian-banks-poised-to-benefit-from-rising-rates/

⁵https://www.gobankingrates.com/investing/stocks/do-bank-stocks-go-up-when-interest-rates-rise/

⁶https://assets.kpmg.com/content/dam/kpmg/ca/pdf/2023/01/canadian-banking-2022-year-end-results-en.pdf

⁷https://assets.kpmg.com/content/dam/kpmg/ca/pdf/2023/01/canadian-banking-2022-year-end-results-en.pdf

⁸ https://assets.kpmg.com/content/dam/kpmg/ca/pdf/2023/01/canadian-banking-2022-year-end-results-en.pdf

How Innovative Industries Fared in 2022

Posted on February 1, 2023December 19, 2023 by Veronica Carlasuc

Automobile Innovation, Electric Vehicles Sales Surge

Transportation is transforming in a big way globally. Electric vehicles are gaining a lot of traction, and there’s plenty of data that says the future looks bright.

Particularly, electric vehicle sales have surged in China, as automakers look to establish themselves beyond their home market. Between January and September 2022, 342,000 passenger electric vehicles were exported from the country—up 29% when compared to 2019. These vehicles were also one of the biggest contributors to the overall increase in car exports from China. Furthermore, 314,000 low-speed electric vehicles and 4,000 electric buses were also exported out of China.¹

Globally, electric vehicle sales are also surging. More EVs were sold in the first half of 2022 alone than any previous year. According to data from BloombergNEF, 13% of global vehicle sales were battery electric, plug-in hybrids, or fuel cell vehicles.

In Germany, electric vehicles amounted to 26% of total car sales in the first half of 2022. In the UK and China, this figure was 24% and 23%, respectively. In the U.S., electric vehicles made up just 7% of all vehicles sold.²

Cybersecurity, Recent Cyberattack on FuboTV

Cyberattacks are becoming the norm as more and more businesses report cybersecurity-related incidents.

In December, FuboTV, a live-TV bundle streaming service, reported a cyberattack that affected customers that were trying to access the World Cup semifinals between France and Morocco. The company said that it took immediate action to contain the cybersecurity incident and was able to restore service for its customers.

FuboTV reported the cyberattack to law enforcement and hired Mandiant—a cybersecurity firm, to help with the investigation and response.³

In addition, The Guardian, a British daily newspaper, recently revealed that it was hit with a suspected ransomware hack that impacted parts of its digital infrastructure in December as well. The news outlet deemed the attack a serious IT incident.

Ransomware hacks essentially make networks and applications unworkable. The hackers then demand payment to let go of the system. Over the years, ransomware attacks have gotten faster and more sophisticated. Even the Biden Administration warned about these attacks a few months ago.⁴

Cloud Computing, Updates on AWS and Microsoft

Despite facing some challenges with consumer spending, AWS is making headwinds in the healthcare sector. Recently, the cloud computing business launched general availability for Amazon Omics—a service that helps researchers store and analyze omic data like sequences of DNA, RNA, and proteins. This service offers the infrastructure customers need when working with large amounts of data. According to a report from Straits Research, the global genomic data analysis market could reach $2.15 billion by 2030.⁵

On the other hand, Microsoft is planning to buy four percent ownership in the London Stock Exchange Group (LSEG) for $2.0 billion in hopes of expanding its cloud business among European financial institutions.

The specific details of this partnership have yet to be announced by the LSEG, but the exchange wants to use Microsoft products such as Azure, AI, and Teams to boost profit. Microsoft’s executive vice president, Scott Guthrie, will be made a non-executive director of LSEG, and the exchange will invest $2.8 billion in Microsoft’s cloud products over the next decade.⁶

E-Gaming, Developments in VR and Cloud Gaming

But it isn’t all negative: the sweetest spot within the video game market was Virtual Reality (VR) installs and cloud gaming.

In 2022, the VR install base grew to 27.7 million and is expected reach 46.0 million by 2024. Revenue for this portion of the video game market is expected to surge from $1.8 billion to $3.2 billion.

Cloud gaming is also seeing some encouraging developments with 20 million paying users that spent an estimated $2.4 billion on cloud gaming services in 2022.⁷

5G, Growth in 5G Chipsets

According to a report from ResearchandMarkets.com, the 5G chipset market size is expected to see robust growth in the coming years. The report states that the 5G chipset market size was valued at $13.26 billion in 2022 and could reach $92.05 billion by 2030. This would mean a compound annual growth rate (CAGR) of 21.8% between 2021 and 2030.

Some of the primary factors driving the growth of the 5G chipsets market is the increase in demand for high-speed internet, large network coverage, and a large number of M2M/IoT connections.⁸

Robotics & Automation, Impact of AI Tool ChatGPT

OpenAI has released a new artificial intelligence (AI) tool called ChatGPT. This tool has the ability to replace tasks/roles traditionally held by humans, such as copywriting, answering customer service inquiries, writing news reports, and others.

While ChatGPT has gained a lot of attention in the headlines, it isn’t the only AI tool designed to perform creative tasks faster and better than humans. In recent years, OpenAI also introduced another AI too, called DAAL-E. This tool is designed to increase the speed of graphic design.

As it stands, it relatively unknown what impacts these AI tools will have, but they certainly have the ability to empower millions of people. Obviously, their impact on the economy could be immense as well.⁹

Fintech, Ability to Weather the Storm

2022 wasn’t the greatest for fintech companies. They witnessed their valuations deflate significantly as investors started questioning their future due to a rise in interest rates and the odds of an economic slowdown increasing.

This was particularly seen with fintech companies that deal directly with retail borrowers. Many startup companies are running out of funding and are expected to shut down or sell themselves in the coming years. One of the main reasons these particular set of fintech companies are losing money, and may never be profitable, is because they started off on the wrong assumptions, thinking interest rates would remain low in the long term.

The future is bright, however, for fintech firms that have three to four years of funding. Analysts believe these companies may be able to weather the storm.¹⁰

Genomics, Selling Paxlovid in China

In December, a Chinese healthcare platform began selling Pfizer’s oral COVID-19 treatment, Paxlovid—the first retail sale of the drug in the country.

The number of COVID-19 cases in China has surged over the last number of months. The official data from China suggests that less than 20 people have died from COVID-19 but the World Health Organization believes China is downplaying the data.¹¹

Pfizer’s COVID-19 vaccine that was jointly developed by BioNTech, using mRNA technology, has not been approved for use in China.

Researchers in the United Kingdom have announced that a 13-year-old leukaemia patient at Great Ormon Street Hospital (GOSH) saw her cancer, that was previously thought incurable, go into remission, just one month after taking a new treatment.

The patient, Alyssa, became the first person ever to receive genetically modified immune cells called Chimeric Antigen Receptor (CAR) T-cells, that originally came from a healthy donor, in May 2022. The cells were edited using new base-editing technology, which allowed them to track down and kill the cancerous T-cells.¹²

Investing in Disruptive Innovation with EDGE ETF

Is your investment portfolio ready for the future? The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5g, fintech, genomics, and robotics & automation. Give your portfolio an edge.

EDGE ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Seagen Inc., made the largest contribution to the Fund, followed by VMware Inc. and Verizon Communications Inc. On last rebalance, these securities were added to the portfolio: Danaher Corp., Thermo Fisher Scientific Inc., Fortinet Inc., and Marvell Technology Inc.

For the latest information on investing in innovation and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

McKerracher, C. “China’s EV Exports Won’t Be a Mostly Tesla Story for Much Longer,” BNN Bloomberg, December 15, 2022; https://www.bnnbloomberg.ca/china-s-ev-exports-won-t-be-a-mostly-tesla-story-for-much-longer-1.1859750.
Marshall, A. “This Was the Year That Electric Vehicles Took Off,” Wired, December 27, 2022; https://www.wired.com/story/2022-was-the-year-that-electric-vehicles-took-off/.
Rizzo, L. “FuboTV hit with cyberattack during World Cup semifinal match,” CNBC, December 15, 2022; https://www.cnbc.com/2022/12/15/fubotv-hit-with-cyber-attack-during-world-cup-semifinal-match.html.
Stone, J., “Guardian Newspaper Is Hit With Suspected Ransomware Attack,” BNN Bloomberg, December 21, 2022; https://www.bnnbloomberg.ca/guardian-newspaper-is-hit-with-suspected-ransomware-attack-1.1862192.
Capoot, A., “How Amazon’s cloud unit is helping researchers analyze genetics,” CNBC, December 31, 2022; https://www.cnbc.com/2022/12/28/how-amazons-cloud-unit-is-helping-researchers-analyze-genetics.html.
Nieto, P., “Microsoft purchases 4% stake in London Stock Exchange for 10-year cloud deal,” Fox Business, December 12, 2022; https://www.foxbusiness.com/technology/microsoft-purchases-stake-london-stock-exchange-year-cloud-deal.
Wijman, T., “The Games Market in 2022: The Year in Numbers,” Newzoo, December 21, 2022; https://newzoo.com/insights/articles/the-games-market-in-2022-the-year-in-numbers.
“5G Chipset Global Market Report 2022: Rising Demand for High Speed Internet and Large Network Coverage Boosts Adoption,” GlobeNewswire, December 27, 2022; https://www.globenewswire.com/news-release/2022/12/27/2579836/0/en/5G-Chipset-Global-Market-Report-2022-Rising-Demand-for-High-Speed-Internet-and-Large-Network-Coverage-Boosts-Adoption.html.
Agrawal, A., Gans, J., and Goldfarb, A., “ChatGPT and How AI Disrupts Industries,” Harvard Business Review, December 12, 2022; https://hbr.org/2022/12/chatgpt-and-how-ai-disrupts-industries.
Son, H., “The fintech reckoning is upon us. Here’s what to expect next year,” CNBC, December 28, 2022; https://www.cnbc.com/2022/12/28/fintech-startups-2022-2023-a-reckoning-is-upon-us-heres-what-to-expect.html.
McCarthy, S., “China ‘under-representing’ true impact of Covid outbreak, WHO says,” CNN, January 6, 2023; https://www.cnn.com/2023/01/05/china/china-covid-outbreak-who-data-intl-hnk/index.html.
“GOSH patient receives world-first treatment for her ‘incurable’ T-cell leukaemia,” Great Ormond Street Hospital, December 11, 2022; https://www.gosh.nhs.uk/news/gosh-patient-receives-world-first-treatment-for-her-incurable-t-cell-leukaemia/.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

The Benefits of Fixed Income Investing in 2023

Posted on January 31, 2023February 12, 2023 by Veronica Carlasuc

With the highest inflation in a generation coupled with dramatic rate hikes by central banks worldwide to combat it, 2022 was a challenging year for investments across asset classes.

Despite the uncertain economic picture ahead in 2023, investors should be excited by the opportunities for fixed income investing this year. Conditions for these investments may be their strongest in a decade or more.¹

Current data suggest that inflation is already declining toward target levels, that job numbers (while strong now) are likely to moderate through the course of the year, and that a broader economic slowdown likely leading to a recession mid- to late this year is already underway.²

While these trends suggest a rocky year for stocks and the overall economy, smart investors can find opportunities at home and abroad to diversify their fixed-income portfolio and protect their savings in the face of a potentially volatile market.

Inflation is finally slowing

Central banks in the United States, Canada, and around the world took unprecedented steps in 2022 to combat inflation with dramatic increases in interest rates.

In its late January 2023 announcement, the Bank of Canada hiked rates another 25-basis-points to 4.5%, their highest level in 15 years. This represents an unprecedented 425-basis-point rise since the start of 2022 as the bank fought inflation.³The US Federal Reserve also raised rates in the US another quarter point at their February meeting.⁴

However, in a sign that such restrictive monetary policy is achieving its anti-inflationary aims, the Bank of Canada became the first major central bank to announce a ‘wait and see’ policy on further increases in the near future as it assesses whether the existing rate hikes have been enough to mute the factors that have driven inflation.⁵Fed watchers speculate that a similar ‘wait and see’ policy will be adopted in the US.⁶

The upside for investors in all these rate increases has been that rising interest rates are a boon to bond yields, meaning investors may want to prioritize fixed income this year.

While high interest rates take a toll on mortgage rates and unsecured debt such as student and consumer loans, the same higher rates mean higher yields on fixed-income investments. One-year guaranteed investment certificate (GIC) payouts recently topped 5% in Canada.⁷ Yields on government and investment-grade corporate bonds are also up compared to a year ago as competition for lenders heats up in the bond market.

For today’s fixed income investor, opportunities for strong yields already exist, with the potential for greater returns if the economy faces a slowdown or an outright recession later this year.⁸

Will we face a recession in 2023?

Along with a small rate increase, the Bank of Canada’s recent announcement also hinted at the possibility of a recession in 2023 as a consequence of higher interest rates.

In its quarterly Monetary Policy Report (MPR), the Bank of Canada anticipates the possibility that the economy could dip into recession as early as the first half of 2023 and not reach the bank’s target level of 2% inflation until 2024.⁹And until that level is reached, cuts to interest rates are unlikely, despite the belief by some segments of the market that we may see rates lowered as much as two times in the second half of 2023.¹⁰

Canada is not alone in anticipating a recession this year. In the United States, both public sentiment and the opinion of a significant majority of economists foresee an economic contraction in 2023.¹¹ And while the European Union shows signs that it may avoid a recession, the United Kingdom’s economy contracted for the sixth straight month in January, suggesting a difficult road ahead for 2023.¹²

For investors, these warning signs mark an excellent opportunity to move assets away from the potential volatility of equities in the coming year and into the lower-risk haven of fixed income, whether at home or abroad. And given interest rate volatility and aggressive monetary management by central banks, investors may be able to do so without making significant sacrifices in returns.¹³

Planning your fixed income investing for 2023

Fixed income investing’s primary goal is safety—protecting your savings over time.

Because of ongoing uncertainty about the prospects for growth in 2023, high-quality fixed-income assets may prove more stable, attractive investments in the near term compared to more volatile investments like stocks.

Given this, fixed income investors should keep the following in mind when planning investments in 2023:

Aim for high-quality assets in your portfolio. Whether we face a hard or soft landing in 2023, high-quality fixed-income assets, such as US Treasuries, investment-grade company debt, and asset-backed securities will provide stable investment opportunities with minimal risk.¹⁴
Diversify your portfolio. It’s Investing 101, but that’s because it works. Over time, diversification delivers the best returns, even in fixed income. Take advantage of 2022’s economy-wide valuation reset and scoop up high-quality fixed-income assets across a range of sectors in 2023.¹⁵
Vary your investment strategies. Investors should take advantage of options to ladder their fixed-income portfolios. Stagger the maturities of your fixed income investments to give yourself the flexibility to jump into the best returns as the market fluctuates.¹⁶

Investing in Fixed Income ETFs

While the economy faces headwinds in 2023—ongoing uncertainty about inflation, the potential for further rate hikes by central banks, and the possibility of a recession—there are silver linings for savvy fixed income investors.

One is the opportunity to diversify your fixed income holdings through investing in fixed income ETFs.

Evolve ETFs offers two fixed income funds: the Evolve Active Global Fixed Income Fund (EARN ETF) and the award-winning Evolve Active Core Fixed Income Fund (FIXD ETF). EARN ETF is designed to provide investors with exposure to global debt securities of corporate issuers while FIXD ETF gives investors access to high quality Canadian fixed income securities.

For more information on the Evolve Active Global Fixed Income Fund (EARN ETF), explore fund details here.

For more information on the Evolve Active Core Fixed Income Fund (FIXD ETF), explore fund details here.

If you’re interested in more blogs like this, insights on investing and investment products, sign up for our weekly newsletter.

Sources:

1. https://www.wealthprofessional.ca/investments/fixed-income/is-this-the-best-opportunity-in-bonds-for-a-decade/372735

2. https://am.jpmorgan.com/us/en/asset-management/institutional/insights/market-insights/market-updates/on-the-minds-of-investors/what-to-do-with-fixed-income-in-2023/

3. https://www.reuters.com/markets/rates-bonds/bank-canada-hikes-rates-becomes-first-major-central-bank-signal-pause-2023-01-25/

4. https://www.cnbc.com/2023/01/30/federal-reserve-likely-to-hike-interest-rates-again-how-to-prepare.html

5. https://www.reuters.com/markets/rates-bonds/bank-canada-hikes-rates-becomes-first-major-central-bank-signal-pause-2023-01-25/

6. https://www.cnbc.com/2023/01/30/federal-reserve-likely-to-hike-interest-rates-again-how-to-prepare.html

7. https://www.bnnbloomberg.ca/rate-hike-pause-puts-retirement-investors-in-a-sweet-spot-1.1875667

8. https://www.morganstanley.com/ideas/investment-outlook-2023-year-patient-selective

9. https://www.reuters.com/markets/rates-bonds/bank-canada-hikes-rates-becomes-first-major-central-bank-signal-pause-2023-01-25/

10. https://am.jpmorgan.com/us/en/asset-management/institutional/insights/market-insights/market-updates/on-the-minds-of-investors/what-to-do-with-fixed-income-in-2023/

11. https://www.bankrate.com/banking/federal-reserve/economic-indicator-survey-recession-risks-january-2023/

12. https://www.cnn.com/2023/01/24/economy/eurozone-recession-growth/index.html

13. https://www.bnnbloomberg.ca/rate-hike-pause-puts-retirement-investors-in-a-sweet-spot-1.1875667

14. https://am.jpmorgan.com/us/en/asset-management/institutional/insights/market-insights/market-updates/on-the-minds-of-investors/what-to-do-with-fixed-income-in-2023/

15. https://am.jpmorgan.com/us/en/asset-management/institutional/insights/market-insights/market-updates/on-the-minds-of-investors/what-to-do-with-fixed-income-in-2023/

16. https://www.bnnbloomberg.ca/rate-hike-pause-puts-retirement-investors-in-a-sweet-spot-1.1875667

Exploring the Different Facets of the Metaverse

Posted on January 31, 2023February 24, 2023 by Veronica Carlasuc

The metaverse is forecasted to experience explosive growth over the next decade, soaring from a market size of $22.79 billion in 2021 to $3 trillion in 2031, expanding at a compound annual growth rate of 62.91%.¹

Countries like Seoul, Dubai, and Taiwan are already making great strides to deploy metaverse technology to create smarter cities. Meanwhile, new opportunities are emerging in a wide number of industries, from education to industrial, remote work, art, and entertainment.

For this to become a sustainable, economic success, the metaverse needs to be fully interoperable and portable. This can be achieved, in part, by the further adoption of web3 technologies.

This includes cryptocurrency. Not only is it a way to buy and sell items in the metaverse, but blockchain assets like non-fungible tokens (NFTs) can help establish and validate ownership of digital objects in the metaverse and allow users to navigate the metaverse in ways that are currently not available.

Many large technology companies are taking strides to make the metaverse more interoperable. Sony Corporation’s new Mocopi tracking bands, which are worn on the hands, feet, back, and head, create a full-body avatar experience, allowing users to better interact with virtual reality (VR). In addition to the metaverse, the product is geared toward animation professionals and filmmakers.²

The consumer metaverse is the most popular facet of the metaverse. It is characterized by immersive games, retail experiences, and the massive popularity of VR glasses. But a lot more money is expected to be made in the industrial metaverse, which is exemplified by digital twins, predictive maintenance, and augmented field service.³

By 2030, the industrial metaverse could be worth $100 billion. By comparison, the consumer metaverse is projected to be worth $50 billion, and the enterprise metaverse $30 billion.

Digital twins technology is important for the metaverse, but it has crossover applications that go beyond virtual retail and gaming, and is better associated with architecture, engineering and construction, manufacturing, energy and utilities, and aerospace and defense.

COMPANY SPECIFIC UPDATES

NetEase and SkyBox Labs

NetEast Inc. is a leading internet and gaming services provider. The company announced recently that its game division, NetEase Games, has acquired SkyBox Labs, a Canadian-based game studio.⁴

The SkyBox Labs development is the latest in a string of acquisitions NetEase has made in recent years, which also includes Grasshopper Manufacture, the name behind No More Heroes; and Quantic Dream, the Paris-based studio responsible for Heavy Rain, Detroit: Become Human, and Beyond: Two Souls.^5,6

Gaming is an important building block for the metaverse. It’s about creating games that put people, places, and things in shared communities and worlds that are easily accessible through various devices.

To build a realistic metaverse, companies like NetEase Inc must continue to acquire leading gaming developers.

PTC and 3D Computer-Aided Design

PTC Inc. is a Boston-based software company that helps businesses digitally transform their products, with a portfolio that spans computer-aided design (CAD), product lifecycle management (PLM), Industrial Internet of Things (IIoT), and Augmented Reality (AR) markets.

The company announced recently that its Creo CAD product and Windchill PLM technology were used by the National Ignition Facility (NIF) which recently achieved nuclear fusion, generating more energy than it consumed.⁷

With more than 3.5 million components comprised of 750,000 unique part designs, the NIF system is thought to be the largest Creo and Windchill assembly ever created and, perhaps, the largest assembly ever modeled in 3D CAD.

PTC Inc’s CAD and AR software, which are the cornerstones of unlocking the full potential of the metaverse, helps businesses and government organizations design and create innovative mixed reality products.

MESH ETF: Investing in the Metaverse

MESH ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Tencent Holdings Ltd made the largest contribution to the Fund, followed by Activision Blizzard Inc and NetEase Inc. The largest detractors to performance for the month were Unity Software Inc, Advanced Micro Devices, Inc., and NVIDIA Corporation. On the last rebalance, PTC Inc was added to the portfolio.

For more blogs like this, insight on investing, and updated on related investment products, sign up for our weekly newsletter here.

Sources:

“Economic Opportunities in the Metaverse: A Policy Approach,” Meta, December 2, 2022; https://about.fb.com/news/2022/12/economic-opportunities-in-the-metaverse/.
Dent, S., “Sony steps into the Metaverse with the ‘Mocopi’ motion tracking system,” engadget.com, November 29, 2022; https://www.engadget.com/sony-mocopi-movement-tracker-metaverse-avatars-131721036.html.
Lawton, G., “Why the industrial metaverse will eclipse the consumer one,” VentureBeat.com, December 23, 2022; https://venturebeat.com/virtual/why-the-industrial-metaverse-will-eclipse-the-consumer-one/.
“SkyBox Labs is joining NetEase Games,” NetEase, Inc., January 6, 2023; https://netease.gcs-web.com/news-releases/news-release-details/skybox-labs-joining-netease-games.
“Announcement on Grasshopper Manufacture Inc. Joining NetEase Games,” NetEase, Inc., October 22, 2021; https://netease.gcs-web.com/news-releases/news-release-details/announcement-grasshopper-manufacture-inc-joining-netease-games.
“NetEase Acquires Leading French Game Developer & Publisher Quantic Dream,” NetEase, Inc., August 31, 2022; https://netease.gcs-web.com/news-releases/news-release-details/netease-acquires-leading-french-game-developer-publisher-quantic.
“PTC Discloses Enabling Role in Nuclear Fusion Breakthrough,” PTC, December 20, 2022; https://investor.ptc.com/resources/news/news-details/2022/PTC-Discloses-Enabling-Role-in-Nuclear-Fusion-Breakthrough/default.aspx.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Innovation Makes Healthcare Better, Cheaper, and More Accessible

Posted on January 30, 2023February 15, 2023 by Veronica Carlasuc

The rapid development of innovations in the global healthcare industry continues to modernize and make healthcare better, cheaper, and more accessible. In December, a Chinese healthcare platform began selling Pfizer’s oral COVID-19 treatment, Paxlovid—the first retail sale of the drug in the country.

Leaked government information suggests almost 250 million people in China caught COVID-19 in the opening weeks of December. If correct, that would account for 18% of China’s 1.4 billion population and represent the largest global outbreak of COVID-19.²

Pfizer’s COVID-19 vaccine that was jointly developed by BioNTech, using mRNA technology, has not been approved for use in China.

Meanwhile, researchers in the United Kingdom have announced that a 13-year-old leukaemia patient at Great Ormon Street Hospital (GOSH) saw her cancer, that was previously thought incurable, go into remission, just one month after taking a new treatment.

The patient, Alyssa, became the first person ever to receive genetically modified immune cells called CAR T cells, that originally came from a healthy donor, in May 2022. The cells were edited using new base-editing technology, which allowed them to track down and kill the cancerous T-cells.³

COMPANY SPECIFIC UPDATES

Obesity Treatment by Novo Nordisk

Novo Nordisk recently announced that the U.S. Food and Drug Administration (FDA) expanded the approval of Wegovy for the treatment of obesity in teens aged 12 years of age and older.⁴

This FDA approval marks the first time an anti-obesity drug with once-weekly dosing has been approved for teens.

In clinical trials, teens aged 12 to 17 who took the weekly injections lost 14% of their body weight over 64 weeks. This data closely matches the trials for adults, where recipients lost 15% of their body weight after 58 weeks.

The FDA initially approved Wegovy in June 2021 for adults with obesity. It was the first obesity treatment approved in seven years.⁵

Of particular note, the active ingredient in Wegovy, semaglutide, has been previously approved in a lower dose formation by the FDA for type 2 diabetes in 2017. That product is sold under the name Ozempic.⁶

HIV Treatment by Gilead Sciences

Gilead Sciences, Inc. has had a number of its products approved by the FDA. In December, Sunlenca, in combination with other antiretrovirals, has been granted approval by the FDA for the treatment of HIV-1 infection in adults with multi-drug resistant HIV-1 infection. The twice-yearly treatment is the first and only approved capsid inhibitor-based HIV treatment option.⁷

In November 2022, Gilead announced that the European Commission granted expanded marketing authorization for Biktarvy for the treatment of HIV in children who are at least two years of age. The approval applies to all 27 member states of the EU, as well as Norway, Iceland, and Liechtenstein.⁸

Investing in Healthcare with LIFE ETF

The Evolve Global Healthcare Enhanced Yield Fund (TSX Ticker: LIFE), LIFE ETF, is one simple way to access some of the world’s largest healthcare companies in one single investment solution. For more information about LIFE ETF or any of Evolve ETF’s lineup of exchange-traded funds, please visit https://evolveetfs.com/life/.

LIFE ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Novo Nordisk A/S made the largest contribution to the Fund, followed by Sanofi SA, and Stryker Corporation. The largest detractors to performance for the month were Bristol-Myers Squibb Co, and CSL ADR.

On the last rebalance, these securities were added to the portfolio: Gilead Sciences, Inc. and Stryker Corporation. By weight, the Fund’s largest geographic exposure was to the United States, followed by Germany, and Britain.

For the latest information on investing in healthcare and updates on related investment products, sign up for our weekly newsletter here.

Sources:

McCarthy, S., “China ‘under-representing’ true impact of Covid outbreak, WHO says,” CNN, January 6, 2023; https://www.cnn.com/2023/01/05/china/china-covid-outbreak-who-data-intl-hnk/index.html.
Ritchie, H., Gan, N., McCarthy, , Wang, S.,and Zhang, M., “Leaked notes from Chinese health officials estimate 250 million Covid-19 infections in December: reports,” CNN, December 23, 2022; https://www.cnn.com/2022/12/23/china/china-covid-infections-250-million-intl-hnk/index.html.
“GOSH patient receives world-first treatment for her ‘incurable’ T-cell leukaemia,” Great Ormond Street Hospital, December 11, 2022; https://www.gosh.nhs.uk/news/gosh-patient-receives-world-first-treatment-for-her-incurable-t-cell-leukaemia/.
“FDA Approves Once-Weekly Wegovy injection for the Treatment of Obesity in Teens Aged 12 Years and Older,” Drugs.com, December 23, 2022; https://www.drugs.com/newdrugs/fda-approves-once-weekly-wegovy-obesity-teens-aged-12-years-older-5949.html.
“FDA Approves New Drug Treatment for Chronic Weight Management, First Since 2014,” U.S. Food & Drug Administration, June 4, 2021; https://www.fda.gov/news-events/press-announcements/fda-approves-new-drug-treatment-chronic-weight-management-first-2014.
“Novo Nordisk Receives FDA Approval of OZEMPIC® (semaglutide) Injection For the Treatment of Adults with Type 2 Diabetes,” Novo Nordisk, December 5, 2017; https://www.prnewswire.com/news-releases/novo-nordisk-receives-fda-approval-of-ozempic-semaglutide-injection-for-the-treatment-of-adults-with-type-2-diabetes-300567052.html.
“Sunlenca® (lenacapavir) Receives FDA Approval as a First-in-Class, Twice-Yearly Treatment Option for People Living With Multi-Drug Resistant HIV,” Gilead Sciences, Inc., December 22, 2022; https://www.gilead.com/news-and-press/press-room/press-releases/2022/12/sunlenca-lenacapavir-receives-fda-approval-as-a-firstinclass-twiceyearly-treatment-option-for-people-living-with-multidrug-resistant-hiv.
“European Commission Grants Expanded Marketing Authorization for Gilead’s Biktarvy® for the Treatment of HIV in Pediatric Populations,” Gilead Sciences, Inc., November 29, 2022; https://www.gilead.com/news-and-press/press-room/press-releases/2022/11/european-commission-grants-expanded-marketing-authorization-for-gileads-biktarvy-for-the-treatment-of-hiv-in-pediatric-populations.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Why the ETF industry is unlikely to give up ground during an economic downturn

Posted on January 30, 2023February 16, 2024 by Veronica Carlasuc

Long-Term Growth Expected for Cloud Amid Fears of a Recession

Posted on January 27, 2023February 3, 2023 by Veronica Carlasuc

As the global recession noise gets louder, cloud computing companies are starting to face some challenges as well.

According to Amazon Web Services (AWS), one of the biggest money-makers for Amazon.com Inc., customers are beginning to question their spending on cloud-related expenses. The National Football League (NFL), for example, which uses AWS to generate statistics and schedules, is reviewing its cloud computing costs. The NFL’s senior vice president of health and innovation, Jennifer Langton, said that the NFL isn’t recession-proof, and the league is negotiating terms with AWS.¹

While the bad news may dominate the headlines, there’s a lot of good news as well around cloud computing that continues to make a strong case for long-term growth.

In other cloud-related news, the Pentagon recently announced that Amazon, Google, Microsoft, and Oracle received a cloud computing contract that could be worth as much as $9.0 billion through 2028. This cloud computing contract is a result of Joint Warfighting Cloud Capability or JWCC for short, where the U.S. Defense Department is trying to depend on several cloud service providers versus just one company.⁴

Updates on Select Cloud Computing Companies

MongoDB’s Undervalued Stock

MongoDB offers a general-purpose database platform globally. In recent weeks, the company has been getting a lot of attention from research analysts regarding its price targets and ratings.

According to analysts at Credit Suisse, MongoDB’s stock is undervalued. Meanwhile, analysts at Citigroup have labelled the stock as one of the top picks in the software industry.⁵

Amid fears of a recession, MongoDB revealed that new business has not been impacted by the recent economic uncertainty and that the company has over $20 billion of market opportunity to address each year. In addition, the company is expected to earn between $45 million and $55 million in post-COVID normalization expenses throughout 2023.⁶

Source: Siliconangle.com/2022/06/04/mongodb

Dropbox’s Acquisition of FormSwift

Dropbox offers a content collaboration platform that allows individuals, families, teams, and organizations to store files in one location and share them securely. Dropbox has over 700 million registered users.

On December 16^th, Dropbox announced that it has acquired FormSwift, a cloud-based service that allows individuals and business solutions to create, complete, edit, and save business forms and agreements. Dropbox purchased FormSwift for $95.0 million in cash and said it plans to discuss the relevant impact on financials in the Q4 2022 earnings call.⁷

Investing in Cloud Computing with DATA ETF

Cloud Computing is transforming the global economy. Over the past decade, cloud has fundamentally changed the way businesses and individuals access data. From physical servers to portable drives, cloud has helped eliminate the need to store information on-premise.

DATA ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, MongoDB Inc. made the largest contribution to the Fund, followed by Okta Inc. and DocuSign Inc. The largest detractors to performance for the month were Salesforce Inc., followed by Alphabet Inc. and Amazon.com Inc. On last rebalance, these securities were added to the portfolio: Dropbox Inc., Fortinet Inc., and Nutanix Inc.

Stay updated with the latest information on cloud computing and related industries by signing up for our weekly newsletter.

Sources:

Novet, J., “Amazon’s cloud unit faces cost-sensitive customers as economic fears mount,” CNBC, December 4, 202; https://www.cnbc.com/2022/12/03/aws-faces-cost-sensitive-customers-at-reinvent-as-economic-fears-mount.html.
Capoot, A., “How Amazon’s cloud unit is helping researchers analyze genetics,” CNBC, December 31, 2022; https://www.cnbc.com/2022/12/28/how-amazons-cloud-unit-is-helping-researchers-analyze-genetics.html.
Nieto, P., “Microsoft purchases 4% stake in London Stock Exchange for 10-year cloud deal,” Fox Business, December 12, 2022; https://www.foxbusiness.com/technology/microsoft-purchases-stake-london-stock-exchange-year-cloud-deal.
Novet, J., “Google, Oracle, Amazon and Microsoft awarded Pentagon cloud deal of up to $9 billion combined,” CNBC, December 7, 2022; https://www.cnbc.com/2022/12/07/google-oracle-amazon-and-microsoft-awarded-9-billion-pentagon-cloud-deals.html.
Volkman, E., “Why MongoDB Stock Triumphed On Tuesday,” The Motley Fool, December 20, 2022; https://www.fool.com/investing/2022/12/20/why-mongodb-stock-triumphed-on-tuesday.
Lahiri, A., “MongoDB’s Resistance Against Macro Headwinds, New Workloads Win Analyst Conviction,” Yahoo! Finance, January 11, 2023; https://finance.yahoo.com/news/mongodbs-resistance-against-macro-headwinds-181500415.html.
“Dropbox Acquires FormSwift,” Yahoo! Finance, December 16, 2022; https://finance.yahoo.com/news/dropbox-acquires-formswift-140500985.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Biotech Market Forecast: 3 Top Trends That Will Affect Biotech in 2023

Posted on January 23, 2023January 25, 2023 by Veronica Carlasuc

How the Canadian ETF landscape could change in 2023

Posted on January 20, 2023February 16, 2024 by Veronica Carlasuc

How investors can benefit from the hacker threat. Plus, Algonquin Power’s latest actions met with skepticism by analysts

Posted on January 13, 2023February 16, 2024 by Veronica Carlasuc

Evolve Funds Group officially launches new yield funds

Posted on January 11, 2023 by Veronica Carlasuc

A look back at the year in ETFs

Posted on January 10, 2023February 16, 2024 by Veronica Carlasuc

Evolve unveils ‘Enhanced Yield’ Canadian and US equity ETFs

Posted on January 10, 2023January 11, 2023 by Veronica Carlasuc

Evolve S&P/TSX 60 Enhanced Yield Fund and Evolve S&P 500® Enhanced Yield Fund Begin Trading Today on TSX

Posted on January 10, 2023 by Veronica Carlasuc

TORONTO, Jan. 10, 2023 /CNW/ – Evolve Funds Group Inc. (“Evolve” or “the Manager“) is pleased to announce the launch of the Evolve S&P/TSX 60 Enhanced Yield Fund (“ETSX“) and Evolve S&P 500® Enhanced Yield Fund (“ESPX“). The Evolve Funds have closed initial offering of units and will begin trading on the Toronto Stock Exchange (“TSX“) today under the ticker symbols: ETSX and ESPX. The Evolve Funds are designed to provide investors with the performance of S&P/TSX 60 and S&P 500® Indices, with the addition of enhanced yield through active covered call strategies on the underlying securities.

Evolve S&P/TSX 60 Enhanced Yield Fund

ETSX seeks to provide long-term capital growth by replicating, net of fees and expenses, the performance of the S&P/TSX 60 Index, or any successor thereto, while mitigating downside risk. ETSX invests primarily in the equity constituents of the S&P/TSX 60 Index, or any successor thereto, while writing covered call options on up to 33% of the portfolio, at the discretion of the Manager. The level of covered call option writing may vary based on market volatility and other factors.

Evolve S&P 500® Enhanced Yield Fund

ESPX seeks to provide long-term capital growth by replicating, net of fees and expenses, the performance of the S&P 500® Index, or any successor thereto, while mitigating downside risk. ESPX invests primarily in the equity constituents of the S&P 500® Index, or any successor thereto, while writing covered call options on up to 33% of the portfolio, at the discretion of the Manager. The level of covered call option writing may vary based on market volatility and other factors.

Evolve believes that ETSX and ESPX are suited for a covered call strategy and that option writing may have the potential to add value, as an effective way to help lower the level of volatility for an investor and potentially improve returns.

The following chart sets out the ETF Units for each of the Evolve Funds:

Evolve Fund	ETF Units
Evolve Fund	Hedged ETF Units (CAD$)	Unhedged ETF Units (CAD$)
Evolve S&P/TSX 60 Enhanced Yield Fund	–	ETSX
Evolve S&P 500® Enhanced Yield Fund	ESPX	ESPX.B

In addition to ETF Units, the Evolve Funds will be available in Unhedged Class A and Unhedged Class F Mutual Fund Units (CAD$).

About Evolve Funds Group Inc.

With over $4.5 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook

CONTACT INFORMATION: Evolve ETFs, info@evolveetfs.com, t. 416.214.4884, tf. 1.844.370.4884

MEDIA CONTACT: Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Investing in the S&P 500® and Traditional Indices

Posted on January 9, 2023January 27, 2023 by Veronica Carlasuc

There are thousands of stocks traded on major U.S. and Canadian markets. For instance, The New York Stock Exchange (NYSE) is the world’s largest exchange, with a market cap of $22.1 trillion (as of October 2022) and more than 2,575 listed domestic and international companies.

The NASDAQ is the second largest exchange in the U.S., with a market cap of $31.12 billion (as of January 2023) with over 4,000 listed companies.

The Toronto Stock Exchange (TSX), on the other hand, is the largest exchange in Canada. It has a market cap of $3.3 trillion with 3,289 listed domestic and international companies.

Companies choose to list on different exchanges for many reasons. The NASDAQ is known for being home to the biggest technology stocks in the world. The NYSE, which was founded in 1792, lists some of the world’s oldest, most well-known blue-chip stocks. The TSX, meanwhile, is typically known for commodity, energy, and financial stocks.

To keep track of stocks on the NYSE, NASDAQ, and TSX, companies are grouped into different sectors: Consumer Discretionary, Consumer Services, Consumer Staples, Energy, Financials, Healthcare, Industrials, Information Technology, Materials, Real Estate, and Utilities. From here, the sectors are broken down into subindustries.

Grouping stocks into sectors makes it easier to discover, compare, and conduct due diligence on companies. To get a better gasp on how the broader stock market is doing, there are indices that keep track of various publicly traded companies. Like an exchange, an index is also known for specializing in certain areas.

The most popular index in the U.S. is the Standard & Poor’s 500® Index, or S&P 500. For those interested in Canadian investing, one of the most popular indexes is the S&P/TSX 60.

What Are the S&P 500® and the S&P/TSX 60?

The S&P 500® is a market capitalization weighted index of the 500 leading publicly traded U.S. companies. Because the S&P 500® is weighted by market capitalization, a larger company will have a larger influence on how the index performs.

On top of that, the stocks listed in the S&P 500® account for around 80% of the total value of the U.S. stock market. As a result, the S&P 500® is an important barometer on the economic health of the overall U.S. economy.

But since the S&P 500® is a measure of the underlying performance of the stocks, this means you cannot invest in the index itself.

The S&P/TSX 60 meanwhile is a stock market index made up of 60 of the largest companies listed on the Toronto Stock Exchange. It provides insight into 10 industry sectors, the largest being Financials, Energy, and Industrials. The three biggest constituents of the S&P/TSX 60 are Royal Bank of Canada, Toronto-Dominion Bank, and Enbridge Inc.

Similar to the S&P 500®, the S&P/TSX 60 is market cap weighted and measures the performance of the large cap segment of the Canadian equity market. As a result, investors cannot buy the S&P/TSX 60 either.

Why Follow Traditional Indices?

Investors prefer to follow the performance of the S&P 500® and S&P/TSX 60 because it holds some of the largest companies in the U.S. and Canada.

This helps give investors a better technical understanding on support and resistance levels, which can influence entry and exit points.

As an economic barometer, the indices tend to respond to major economic data, including gross domestic product (GDP), interest rates, employment, retail sales, housing starts, and comments from the Bank of Canada and U.S. Federal Reserve.

Indices such as the S&P 500® and S&P/TSX60 are also updated on a quarterly basis, which can result in companies being dropped or added to the index.

All of this can have a major influence on investor sentiment and whether its improving or deteriorating.

How Do You Invest in the S&P 500® and S&P/TSX 60?

The most obvious way to invest in the S&P 500® and S&P/TSX60 would be to purchase shares in each company. That would be exceptionally cost prohibitive. Just buying one share each of Apple Inc, Microsoft Corp, Johnson & Johnson, Tesla Inc, and Berkshire Hathaway Inc would cost approximately $457,842.00.

A simple, one-ticket solution for gaining exposure to each stock on the S&P 500® and S&P/TSX 60 is through an ETF. Evolve ETFs offers two enhanced yield funds: the Evolve S&P/TSX 60 Enhanced Yield Fund (ETSX) and the Evolve S&P 500® Enhanced Yield Fund (ESPX).

The two funds are designed to provide investors with the performance of the S&P/TSX 60 and S&P 500® indices, with the addition of enhanced yield through active covered call strategies on the underlying securities.

ETSX and ESPX are the only Canadian ETFs tracking the S&P/TSX 60 and S&P 500® while writing calls on the underlying securities rather than the indices.

The ETSX and ESPX provide those investors with a covered call strategy and option writing that has the potential to add value to a portfolio while reducing volatility and enhancing returns.

Investing in Evolve’s ESPX and ETSX funds

For more information on the Evolve S&P 500® Enhanced Yield Fund (ESPX), explore fund details here.

For more information on the Evolve S&P/TSX 60 Enhanced Yield Fund (ETSX), explore fund details here.

If you’re interested in more blogs like this, insights on investing and investment products, sign up for our weekly newsletter.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Gaming Market Forecast: 3 Top Trends That Will Affect Gaming in 2023

Posted on January 9, 2023January 10, 2023 by Veronica Carlasuc

Electric Vehicle Sales Surge in 2022

Posted on January 6, 2023January 20, 2023 by Veronica Carlasuc

Global transportation is transforming in a big way. Electric Vehicles (EVs) are gaining a lot of traction, and there’s plenty of data that says the future looks bright.

Particularly, Electric Vehicle sales have surged in China, as automakers look to establish themselves beyond their home market. Between January and September 2022, 342,000 passenger Electric Vehicles were exported from the country—up 29% when compared to 2019. These vehicles were also one of the biggest contributors to the overall increase in car exports from China. Furthermore, 314,000 low-speed EVs and 4,000 electric buses were also exported out of China.¹

Globally, Electric Vehicle sales are also surging; more EVs were sold in the first half of 2022 alone than any previous year. According to data from BloombergNEF, 13% of global vehicle sales were battery electric, plug-in hybrids, or fuel cell vehicles.

In Germany, Electric Vehicles amounted to 26% of total car sales in the first half of 2022. In the UK and China, this figure was 24% and 23%, respectively. In the U.S., Electric Vehicles made up just 7% of all vehicles sold.²

Sales are also expected to increase in Canada over the coming years. According to new regulations by the Canadian government, one-fifth of all passenger cars, SUVs, and trucks sold in Canada in 2026 will need to be electric. By 2030, EVs will amount to 60% of all vehicle sales. By 2035, the Canadian government is mandating that all vehicle sales be electric. Currently, fully electric and plug-in hybrid vehicles only make up 7.2% of all vehicle registration in Canada.³

With the robust demand for EVs, demand for charging hardware and installation is also increasing. BloombergNEF recently reported that the cost of global charging and installation amounted to $62 billion at the end of 2022—up 228% from a year ago. By the end of 2023, this figure could pass $100 billion, assuming China continues its path of adding significant charging infrastructure in the upcoming years.⁴

COMPANY SPECIFIC UPDATES

Ambarella Inc.

Ambraella Inc. is the developer of various semiconductor solutions with a focus on vision and edge AI applications, advanced driver assistance systems, autonomous driving, and robotics applications. At CES, the company introduced the CV3-AD685, the first production version of the CV3 family of automotive AI domain controllers, which targets L2+ to L4 autonomous vehicles.

These CV3-AD domain controllers could transform the advanced driver assistance systems market. They offer highly efficient AI processing, advanced image processing, and ultra-low power consumption.⁵

CTS Corp.

CTS Corp. engages in manufacturing and selling sensors, actuators, and connectivity components. These components are used in electric cars and autonomous vehicles, as well. Recently, CTS Corp. reported strong financial performance for its most recent quarters—revenue increased, operations were decent, and profitability surged.

Regarding what’s ahead for the company, the CEO of CTS Corp. Kieran O’ Sullivan said that the company’s advanced materials expertise and commercial teams are helping with diversification in the non-transportation end markets, and this could help even during uncertain economic times.⁶

Investing in Auto Innovation with CARS ETF

If you’re looking to invest in an electric vehicle ETF, consider Canada’s first automobile innovation ETF, Evolve Automobile Innovation Index Fund (TSX Ticker: CARS). CARS ETF invests in global companies that are directly or indirectly involved in developing electric drivetrains, autonomous driving or network connected services for automobiles. Shift your investments into gear with CARS in your portfolio. For more information on this fund, please click here: https://evolveetfs.com/cars/

CARS ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Ambarella Inc. made the largest contribution to the Fund, followed by Byd Company Limited and Fluence Energy Inc. The largest detractors to performance for the month were Rivian Automotive Inc., followed by Polestar Automotive Holdings and Microvast Holdings Inc. On last rebalance, this security was added to the portfolio: CTS Corp.

Sources:

McKerracher, C. “China’s EV Exports Won’t Be a Mostly Tesla Story for Much Longer,” BNN Bloomberg, December 15, 2022; https://www.bnnbloomberg.ca/china-s-ev-exports-won-t-be-a-mostly-tesla-story-for-much-longer-1.1859750.
Marshall, A. “This Was the Year That Electric Vehicles Took Off,” Wired, December 27, 2022; https://www.wired.com/story/2022-was-the-year-that-electric-vehicles-took-off/.
Rabson, M. “Canada moves to mandate electric vehicle sales starting in 2026,” CTV News, December 21, 2022; https://www.ctvnews.ca/autos/canada-moves-to-mandate-electric-vehicle-sales-starting-in-2026-1.6203478.
Fishe, R., “Electric vehicle charging investment approaches the US$100B mark,” BNN Bloomberg, December 20, 2022; https://www.bnnbloomberg.ca/electric-vehicle-charging-investment-approaches-the-us-100b-mark-1.1861652.
“Ambarella Expands CV3 Family of Automotive AI Domain Controllers With New CV3-AD685,” Yahoo! Finance, January 5, 2023; https://finance.yahoo.com/news/ambarella-expands-cv3-family-automotive-160000459.html.
CTS Corp., https://investors.ctscorp.com/news-events/news/news-details/2022/CTS-Announces-Third-Quarter-2022-Results/default.aspx, October 26, 2022.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Analysts Reveal Their Cybersecurity Predictions for 2023

Posted on January 4, 2023January 20, 2023 by Veronica Carlasuc

Cyberattacks and cybersecurity-related incidents are becoming the norm as more and more businesses report cyberattacks.

FuboTV reported the cyberattack to law enforcement and hired Mandiant—a cybersecurity firm, to help with the investigation and response.¹

Ransomware hacks essentially make networks/applications unworkable. The hackers then demand payment to let go of the system. Over the years, ransomware attacks have gotten faster and more sophisticated. Even the Biden Administration warned about these attacks a few months ago.²

Looking ahead to 2023, analysts at Gartner recently shared their top cybersecurity predictions for the year, which included:

Supply chain and geopolitical risk will dominate cybersecurity
Emerging architectural patterns will streamline security
Zero trust will play a key role in risk management
DevSecOps will become business-critical
Security operations with automation will enhance proactive and detective capabilities
Data-centric cybersecurity will be key to a “data everywhere” world
Endpoints and workloads will need adaptable protection against emerging and established threats
Human-operated ransomware will become a bigger threat.

According to analysts, with the Russia-Ukraine war still raging and possible economic uncertainty ahead, organizations need to be prepared for an increase in cyberthreats.³

Cybersecurity Predictions for 2023 — Source: Getty Images

UPDATES ON TWO CYBERSECURITY COMPANIES

Okta’s security incident

Okta, an identity solutions provider, revealed recently that the code for Okta Workforce Identity Cloud service was copied after cybercriminals had gained access to the company’s private repository on GitHub.

According to the statement from the company, there was no unauthorized access to the Okta service, or to customer data. It also reiterated that the service remains fully operational and secure.⁴

Varonis Systems’s recent launch

Varonis Systems provides data security and analytics solutions. The company announced that it recently launched the Varonis Vulnerability Disclosure Program (VDP) through HackerOne. This will allow the HackerOne community to alert Varonis about potential cybersecurity issues around the company’s cloud environment and SaaS products.

HackerOne is a vulnerability coordination and bug bounty platform. Its main focus is to connect businesses with penetration testers and cybersecurity researchers.

Regarding the launch of VDP through HackerOne, Varonis Systems revealed that the company has had great success with its private bug disclosure program, and this was the next logical step for the company.⁵

Investing in Cybersecurity with CYBR ETF — Source: Getty Images

Investing in the Cybersecurity Industry with CYBR ETF

If you’re interested in investing in a cybersecurity ETF, consider Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR). CYBR ETF invests in global companies involved in the cyber security industry. For more information, visit the fund page here: https://evolveetfs.com/cybr/.

CYBR ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Okta Inc. made the largest contribution to the Fund, followed by GDS Holdings Ltd. and Varonis Systems Inc. The largest detractors to performance for the month were Palo Alto Networks Inc., followed by Zscaler Inc. and Blackberry Ltd.

For the latest information on cybersecurity investing and industry updates on related investment products, sign up for our weekly newsletter here

Sources:

Rizzo, L. “FuboTV hit with cyberattack during World Cup semifinal match,” CNBC, December 15, 2022; https://www.cnbc.com/2022/12/15/fubotv-hit-with-cyber-attack-during-world-cup-semifinal-match.html.
Stone, J., “Guardian Newspaper Is Hit With Suspected Ransomware Attack,” BNN Bloomberg, December 21, 2022; https://www.bnnbloomberg.ca/guardian-newspaper-is-hit-with-suspected-ransomware-attack-1.1862192.
Keary, T., “Gartner analysts reveal 8 cybersecurity predictions for 2023,” VentureBeat, December 2, 2022; https://venturebeat.com/security/cybersecurity-predictions-gartner/amp/.
Goodin, D., “Okta says source code for Workforce Identity Cloud service was copied,” arsTechnica, December 21, 2022; https://arstechnica.com/information-technology/2022/12/okta-says-source-code-for-workforce-identity-cloud-service-was-copied/.
“Varonis Launches HackerOne Vulnerability Disclosure Program,” Yahoo! Finance, November 29, 2022; https://finance.yahoo.com/news/varonis-launches-hackerone-vulnerability-disclosure-140500859.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Evolve Plans to Launch Enhanced Yield ETFs for S&P/TSX 60 and S&P 500® Indices

Posted on January 4, 2023January 8, 2023 by Veronica Carlasuc

TORONTO, January 4, 2023 – Evolve Funds Group Inc. (“Evolve” or “the Manager”) is pleased to announce that it has filed a final prospectus in plans to launch two enhanced yield funds (“Evolve Funds”) tied to traditional indices. The Evolve S&P/TSX 60 Enhanced Yield Fund (“ETSX”) and the Evolve S&P 500® Enhanced Yield Fund (“ESPX”) are expected to begin trading on Tuesday, January 10, 2023 on the Toronto Stock Exchange (“TSX”), subject to TSX approval. ETSX and ESPX are designed to provide investors with the performance of S&P/TSX 60 and S&P 500® Indices, respectively, with the addition of enhanced yield through active covered call strategies on the underlying securities.

“Last year covered call strategies saw significant inflows into the Canadian marketplace,” says Raj Lala, President and CEO at Evolve ETFs. “We expect that covered call funds will continue to attract attention this year as investors look for enhanced income, tax efficient yield, and strategies that can help cushion some downside risk within their portfolios. ETSX and ESPX complement our existing suite of active covered call strategies and are the only Canadian ETFs tracking the S&P/TSX 60 and S&P 500® while writing calls on the underlying securities rather than the indices.”

Evolve S&P/TSX 60 Enhanced Yield Fund

Evolve S&P 500® Enhanced Yield Fund

The following chart sets out the ETF Units for each of the Evolve Funds:

Evolve Fund	ETF Units
Evolve Fund	Hedged ETF Units (CAD$)	Unhedged ETF Units (CAD$)
Evolve S&P/TSX 60 Enhanced Yield Fund	–	ETSX
Evolve S&P 500® Enhanced Yield Fund	ESPX	ESPX.B

In addition to ETF Units, the Evolve Funds will be available in Unhedged Class A and Unhedged Class F Mutual Fund Units (CAD$).

About Evolve Funds Group Inc.

With over $4.3 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

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CONTACT INFORMATION

Evolve ETFs

info@evolveetfs.com

t. 416.214.4884

tf. 1.844.370.4884

MEDIA CONTACT

Keith Crone

kcrone@evolveetfs.com

416.966.8716

The S&P 500® Index and the S&P/TSX 60 Index are each a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by the Evolve Funds. S&P® and S&P 500® are trademarks of S&P Global, Inc. or its affiliates (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). It is not possible to invest directly in an index. The Evolve Funds are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices does not make any representation or warranty, express or implied, to the owners of the Evolve Funds or any member of the public regarding the advisability of investing in securities generally or in the Evolve Funds particularly or the ability of the S&P 500® Index and the S&P/TSX 60 Index to track general market performance. Past performance of an index is not an indication or guarantee of future results. S&P Dow Jones Indices’ only relationship to the Evolve Funds with respect to the S&P 500® Index and the S&P/TSX 60 Index is the licensing of the Indexes and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The S&P 500® Index and the S&P/TSX 60 Index are determined, composed and calculated by S&P Dow Jones Indices without regard to the Evolve Funds. S&P Dow Jpones Indices have no obligation to take the needs of the Evolve Funds or the owners of the Evolve Funds into consideration in determining, composing or calculating the S&P 500® Index and the S&P/TSX 60 Index. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of the Evolve Funds. There is no assurance that investment products based on the S&P 500® Index or the S&P/TSX 60 Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an “investment adviser, commodity trading advisory, commodity pool operator, broker dealer, fiduciary, promoter” (as defined in the Investment Company Act of 1940, as amended), “expert” as enumerated within 15 U.S.C. s. 77k(a) or tax advisor. Inclusion of a security, commodity, crypto currency or other asset within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, commodity, crypto currency or other asset, nor is it considered to be investment advice or commodity trading advice.

Crypto Market Forecast: 3 Top Trends That Will Affect Crypto in 2023

Posted on January 2, 2023January 11, 2023 by Veronica Carlasuc

The Metaverse: Key Trends to Look Forward to in 2023 and Beyond

Posted on December 30, 2022January 13, 2023 by Veronica Carlasuc

There’s no standardized definition of what exactly the Metaverse is, but everyone agrees that it’s the next version of the Internet.

The Metaverse uses artificial intelligence (AI), augmented reality (AR), virtual reality (VR), and machine learning (ML) to create a network of interactive, 3D, virtual, augmented, and mixed reality worlds accessed through a browser, VR headsets, AR glasses, mobile apps, or other technologies.

It’s essentially a 360-degree version of the Internet; one built around decentralized technology and virtual worlds. It’s a world of limitless, interconnected virtual places where people can socialize, work, travel, have fun, shop, and go on trips.

How Much Will the Metaverse Be Worth?

The metaverse economy is expected to be massive. According to Citi, the metaverse economy could be worth between $8 trillion and $13 trillion by 2030. If the metaverse was a country, it would be third largest economy in the world, trailing just the U.S. and China.

But Citi isn’t the only bank bullish on the metaverse. Goldman Sachs believes the metaverse will be a near-term $12.5 trillion opportunity. That’s why major brands like Gucci, Prada, and Nike have an established presence in the Metaverse and companies like Walmart, Verizon, and Hulu are preparing to enter the metaverse.

One study showed that 74% of all U.S. adults either want to join or would consider being part of the metaverse. Since we’re becoming an increasingly digital society, a growing number of people are excited about the possibilities of the metaverse.

How Are Businesses Preparing for the Metaverse in 2023?

Big Tech

Industry leaders and tech titans like Meta, Microsoft, Apple, and Google are investing heavily in making the metaverse a reality. From building AR/VR headsets to billion-dollar gaming acquisitions, to chips that support the software and hardware needed to build realistic virtual worlds, big tech is developing new products and backing immersive technologies to secure a foothold in the metaverse.

In early 2022, Microsoft announced it was buying gaming giant Activision Blizzard for $68.7 billion. Meanwhile, Meta is building its own chips for AR/VR headsets, and Nvidia’s semiconductors are being used for gaming, cloud-based visuals and computing, and building 3D designs and virtual worlds.

Qualcomm is using its hardware to target metaverse infrastructure. Its 5G infrastructure will mean a faster, more reliable Internet and improve the quality of immersive experiences tied to AR/VR. Most AR/VR headsets already run on Qualcomm chips. The company is also developing tools for motion detection, 3D mapping, and automatic object recognition.

Healthcare

The metaverse is also revolutionizing the healthcare industry to improve patient safety, lower costs, and improve outcomes.

Before COVID-19, 43% of healthcare facilities provided remote treatment. Today, that figure has increased to 95%. The popularity of telemedicine has soared, thanks to the adoption of VR technology which allows doctors to provide an end-to-end experience through diagnosis, assessment, treatment plan, notes and forms.

In the future, a digital twin, a virtual copy of a patient using real-world data, could be used to predict everything from how we will react to specific medicines to how we will recover from surgeries. You could also age a digital twin to see how the interventions are doing and affecting the twin. Thanks to the metaverse, a digital twin can help doctors peek into the future.

Real Estate

Real estate has become just as important in the metaverse as it is in the real world; it can be bought, sold, developed, or rented out.

Decentraland and The Sandbox are two of the top digital worlds in the metaverse. Sandbox has over 160,000 land plots, while Decentraland’s land plots are capped at around 90,000.

When Decentraland first launched in February 2020, each parcel of virtual real estate went for $20. It quickly sold out. In November 2021, a 116-parcel plot of digital land in Decentraland sold for a then record of $2.4 million in cryptocurrency. One month later, a piece of property on Sandlot sold for $4.3 million.

Just like in the real world, it’s all about location. Fans of Snoop Dogg paid $1.23 million to buy three parcels of virtual property next to the rapper’s mansion.

The future for virtual real estate and the resale market remains robust. In one survey, 45% of people said they would consider purchasing virtual real estate with 14% of respondents saying they have already purchased digital land.

Shopping

Another emerging business opportunity in the metaverse is fashion. An avatar, which is a digital version of the user, is a critical part of their virtual identity. And fashion brands understand users will want to use the metaverse to express themselves.

Retailers are buying property and setting up shop, engaging with customers, and developing loyalty with early adopters. Popular brands embracing the metaverse include Adidas, Burberry, Hermes, Nike, Louis Vuitton, Dolce & Gabbana, and Gucci. You need money to shop in the metaverse, which is why banks like HSBC and JP Morgan are also on board.

To generate brand awareness, these retailers have to purchase real estate in the most popular areas. Both Decentraland and The Sandbox have fashion districts.

Shopping in the metaverse can have real-life applications. As an avatar you can drop into Gucci and buy an item that can only be worn in the metaverse or be sent to you in the real world.

In addition, the metaverse fashion industry is evolving. In Spring 2023, the second annual Metaverse Fashion Week will be held in Decentraland. The metaverse is a great way for brands and retailers to present their collections—whether real or virtual—to a larger audience worldwide.

Arts and Entertainment

The rise in popularity of digital art, through NFTs, digital assets, and blockchain technology has translated into the growth of virtual art galleries, with a market position of $2.4 billion. That number is expected to grow as more people use the metaverse and artists and digital creators exhibit their NTFs for collectors and art lovers.

Musicians such as The Foo Fighters, Justin Bieber, Marshmellow, and Lil Nas X have performed concerts in the metaverse with users attending the concerts from the comfort of their homes. Walt Disney Co announced it will be creating a virtual Disneyland where visitors and their avatars can enjoy rollercoaster rides, The Haunted Mansion, and hang out with their favourite Disney characters.

Virtual Travel

The real world might have boundaries and limits but the metaverse does not. And the growing sophistication of the metaverse means travelling abroad could be just as realistic as being there in person. Better still, a virtual visit to Venice allows you to explore all the places you might have missed, and on your own terms.

The virtual metaverse’s limitless travel opportunities will be a boon for the travel sector. Already, 53% of travel executives say the metaverse will have a positive impact on their businesses, with 25% predicting it will have a breakthrough or transformational impact.

Virtual travel isn’t just about playing games. The metaverse can help airlines streamline operations though immersive engineering, drive faster repairs, and run test simulations of a digital twin. Hotels could use the metaverse as a one-stop-shop for guests to purchase theater tickets through a virtual concierge, add room upgrades, and amenities.

What Is the Best Way to Invest in the Metaverse?

When it comes to metaverse investing, there are lots of ways that investors can choose from in order to take advantage of this lucrative industry. One way is to purchase stocks in individual metaverse companies, which could be expensive and time consuming. Another way to take an early, more diversified position in the metaverse is through a metaverse ETF.

Investing in the Metaverse with MESH ETF

Evolve Metaverse ETF (MESH ETF) is Canada’s first metaverse ETF. MESH ETF provides investors with an actively managed diversified portfolio of companies involved in the development of the metaverse. To learn more about MESH ETF, watch the video or click here for fund details: https://evolveetfs.com/mesh/

For more blogs like this, insights on investing, and updates on related investment products, sign up for our weekly newsletter here.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Crypto Market 2022 Year-End Review

Posted on December 29, 2022January 11, 2023 by Veronica Carlasuc

Big Tech vs. Small Tech: How Technology Stocks Perform in a Market Recovery and Recession

Posted on December 27, 2022January 5, 2023 by Veronica Carlasuc

The broader stock market entered 2022 on a bullish note, with the S&P 500 hitting a new record high in early January and the tech-heavy NASDAQ reaching record levels in November 2021.

Optimism that stocks would continue their strong ride in 2022 ended abruptly, with decades-high inflation, interest rates at their highest levels since 2008, and fears of a recession sending stocks lower.

By October, the S&P 500 had lost 26% of its value. That pales to what happened to tech stocks. In that same month, the Nasdaq hit a 52-week low of 10,088, representing a 36.3% year-to-date loss. The Nasdaq includes all kinds of tech stocks, large and small.

How Have Large Cap and Small Cap Tech Stocks Been Doing?

Technology stocks, large and small, were some of the biggest winners when the pandemic hit more than two years ago because their products and services played to the weaknesses of COVID-19.

For more than two years, tech companies saw their operations explode as businesses sent employees to work from home and schools pivoted to online classes. Bored, quarantined individuals spent money on smartphones, computers, games, fitness equipment, and video conferencing software. They also spent more time shopping online.

To combat the pandemic and save the global economy from ruin, central banks, including the Bank of Canada and Federal Reserve, lowered their key lending rate, to record lows.

Low interest rates are great for technology stocks because it costs less to borrow money. Many tech stocks, especially smaller start-ups, are not profitable and need capital to build out their operations.

This dynamic changed in 2022 when central banks began rising interest rates to curb inflation. This makes it more costly to borrow money and carry that debt, which can negatively impact a company’s bottom line.

Higher rates and inflation also make it more expensive for households, which could cause a cutback in spending, and in turn, stifle economic growth and lead to a recession.

On top of that, with people returning to work and spending less time at home, the technology sector is suffering big losses with investors fearing elevated share prices boosted by the pandemic may be running out of steam.

The big question for investors now is, how will big and small cap tech stocks perform during a possible recession and which ones will perform best during a recovery?

How Will Technology Stocks Respond to a Recession?

The return to normalcy and fears of a recession are working against many tech stocks; it’s virtually impossible for all technology stocks to maintain the growth they experienced during the pandemic.

If anything, many tech stocks are seeing their revenue fall to pre-pandemic levels.

These concerns are forcing investors to revaluate ultra-risky assets like high-growth tech stocks. This has resulted in investors exiting riskier equities and heading for more stable, safe haven investments.

Small technology stocks tend to be more sensitive to economic changes, including rising interest rates, than larger tech stocks. As a result, smaller tech stocks generally sell off faster in the lead up to a recession and during a recession.

Based on how stocks performed during the 2008/2009 financial crisis, tech stocks could face a lot more pressure, with additional potential losses in the 30% to 40% range.

Not all tech stocks look at recessions through the same lens, though. A lot of smaller tech stocks have never been through a downturn or recession. Should we face a recession in 2023, smaller tech stocks would look to protect their bottom line, cut their head count, reduce research and development (R&D) spending, and find ways to improve operational efficiency.

Big tech stocks like Facebook, Apple, Netflix, Google, Microsoft, and Amazon (FANGMA) may still be taking a beating (they’re facing the same issues everyone else is), but they aren’t panicking in the same way. That is, if history is any indicator.

In 2008, Paul Otellini, then CEO of Intel, said that during economic downturns like a recession, the company doubles down on R&D, hires more people, and looks for strategic acquisitions. Otellini noted that since tech was never going away, Intel and other major technology players needed to be ready for a recovery.

Fast forward to 2022 and despite recessionary fears, Google is hiring more engineers, Microsoft has doubled its employee bonus pool and is making expansion plans, and Apple has begun construction at its north San Jose property and is building a $1 billion office campus in Austin, Texas.

During the 2008/2010 Great Recession, big tech companies like Google, Apple, Microsoft and Meta (then called Facebook), acquired more than 150 companies and thousands of IPs from small tech companies that were forced to shutter their doors.

The end result? Thanks to these investments, big tech companies exited the recession and entered the recovery larger, stronger, and more profitable.

What Kind of Technology Stocks Perform Best During a Recovery?

A recovery is actually a boon for both well-established tech stocks, like FANGMA companies and nimble, smaller tech stocks, as investors shift from higher interest rate headwinds to earnings resilience and risks.

Some may compare the current sell-off in tech stocks to the 2000 dot-com crash, but it’s entirely different. Tech stocks are in a lot better shape financially and are less expensive than they were in the 1990s.

In late 1999, the Nasdaq was trading at more than 100 times forward earnings. In November 2021, near the last record high, the Nasdaq was only priced at 33 times forward earnings. While the sell-off hasn’t been as severe as it was in 2000-2003, many excellent tech stocks are trading at serious discounts.

And when it comes to a broader recovery, bigger is typically better. FANGMA stocks were industry leaders before the sell-off and because of their massive size (a combined market cap of over $6.9 trillion), diversified operations, and ubiquitous presence. These blue-chip technology stocks will continue to be wildly successful over the long run.

What Is the Best FANGMA Technology ETF?

There are several ways investors can add FANGMA companies to their portfolios. For those bullish investors eager to buy the dip, it would cost approximately $1,000 to buy one stock of each company.

There’s an easier way to take a position in the FANGMA stocks, and that’s through an ETF. The Evolve FANGMA Index ETF, TECH ETF (TSX: TECH), is a uniquely Canadian investment solution dedicated to investing in these six technology titans – Facebook (Meta), Apple, Netflix, Google, Microsoft, and Amazon.

Through TECH ETF, investors get equal-weighted exposure to the Big Six securities, for a reasonable unit price of around $7.45 (as at November 30, 2022).

The index is rebalanced every quarter and because it’s listed on the TSX, eliminates issues with buying foreign securities and estate tax issues.

Investing in FANGMA with Evolve ETFs

Gain exposure to six tech giants in one ETF. With the Evolve FANGMA Index ETF (TECH ETF) investors get exposure to all six companies – Facebook, Amazon, Netflix, Google, Microsoft and Apple – for a reasonable unit price. Make investing in big TECH easy. For more information visit the fund page here: https://evolveetfs.com/tech/.

Bullish on big tech? The Evolve Enhanced FANGMA Index ETF (TECE ETF) allows investors to get 125% exposure* to all six tech giants. To learn more about this newly launched technology etf, visit: https://evolveetfs.com/tece/.

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter here.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Data Centres and Cloud May Be More Vulnerable to Cyberattacks in 2023

Posted on December 23, 2022December 18, 2023 by Veronica Carlasuc

It’s almost as if data breaches, cyberattacks, ransomware attacks, phishing scams and other forms of cybersecurity incidents are becoming a common occurrence.

Not too long ago, the Durham District School Board—a school board northeast of Toronto—revealed that it experienced a cyberattack that impacted at-home schooling. The cyberattack also impacted phone and email services at the school board, as well.

Due to the cyberattacks, the board had to cancel several online classes and postpone a literacy test (OSSLT). Parents of students were told that the board was unable to receive calls but was still able to make calls to parents or to emergency services.¹

Sadly, the cybersecurity incident at the Durham District School Board is just the tip of the iceberg.

In the first half of 2022, there were 2.8 billion malware attacks globally and 236.1 million ransomware attacks. By the end of the year, it is anticipated that six billion phishing attacks will have been launched.

As cyberattacks have become rampant, the Institute of Electrical and Electronics Engineers (IEEE) recently conducted a survey of 350 chief technology officers, chief information officers, and IT directors about the most important technologies in 2023. The survey revealed that 51% of executives see cloud vulnerabilities as one of their top concerns. 43% of executives mentioned data centre vulnerability as their top concern.

Other areas of concern for cybersecurity executives and professionals included ransomware attacks, coordinated attacks on an organization’s network, and the lack of investment in security solutions.²

Overall spending in the tech sector has also dropped due to the impending recession, which has forced CISOs and security leaders to cut back specifically on cybersecurity spending. With less hiring in the cybersecurity industry, it could further worsen the skills shortage.

In addition, a recession is likely to encourage cybercriminals to create new types of threats. According to the FBI, there was a 22.3% increase in online crime reports between 2008 and 2009.³

As a result, companies in the industry are issuing warnings. The CEO of CrowdStrike Holdings, Inc., a leading cybersecurity solutions provider, announced that due to increased macroeconomic headwinds, sales are getting impacted.

Similar sentiment has also been conveyed by Palo Alto Networks Inc., owned by the fund.

According to analysts following the sector closely, it could be a signal that more weakness could be ahead for cybersecurity companies.⁴

Updates on Specific Cybersecurity Companies

GDS Holdings Ltd.

GDS Holdings Ltd., a China-based provider of high-performance data centers, has been deemed a good opportunity by analysts. Even with significant delays around Chinese cloud computing companies requiring data center space, it’s believed that there’s a potential for a recovery over the long term with this company.

GDS Holdings posted decent revenue growth in its recent Q3 report, with net revenue increasing by 15% year-over-year to $332.8 million. In addition, it trades at much cheaper valuations relative to its peers, has a strong leadership position in the Chinese market, and is expanding in Southeast Asia.⁵

Okta, Inc.

Okta Inc., an IT service management company, recently released better-than-expected third-quarter results and guidance for the upcoming period. For the period ending October 31, the company said it broke even and generated $481 million in revenue, which is up 37% year-over-year. Analysts were expecting Okta to lose 24 cents per share and approximately $465.37 million in revenue. As a result, Okta shares surged nearly 17% in after-hours trading.

Looking ahead, the company expects revenue to be between $488 million and $490 million, which is above expectations of just $488 million. In addition, Okta announced that its President of Worldwide Field Operations, Susan St. Ledger, would be retiring in January.⁶

Investing in the Cybersecurity Industry with CYBR ETF

CYBR ETF Portfolio Strategy and Activity

For the month, GDS Holdings Ltd. made the largest contribution to the Fund, followed by Nextdc Ltd. and Netcompany Group. The largest detractors to performance for the month were Zscaler Inc., followed by Sentinelone Inc. and CrowdStrike Holdings Inc. On the last rebalance, IronNet Inc was added to the fund.

For the latest information on cybersecurity investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

“Durham District School Board shuts down virtual learning for 2nd day to recover from cyberattack,” CBC, November 29, 2022; https://www.cbc.ca/news/canada/toronto/durham-cyber-attack-update-1.6667541.
Shacklett, M., “Top cybersecurity threats for 2023,” TechRepublic, November 28, 2022; https://www.techrepublic.com/article/top-cybersecurity-threats/.
Keary, T., “How a recession will change the cybersecurity landscape,” Venture Beat, December 9, 2022; https://venturebeat.com/security/recession-cybersecurity-landscape.
“Crowdstrike Holdings warning sparks selloff in cybersecurity stocks,” Reuters, November 30, 2022; https://www.reuters.com/technology/crowdstrike-holdings-warning-sparks-selloff-cybersecurity-stocks-2022-11-30/.
“Time to Pull the Trigger on Chinese Stocks? Here Are 2 Names That Analysts Like,” Yahoo! Finance, December 1, 2022; https://finance.yahoo.com/news/time-pull-trigger-chinese-stocks-203321827.html.
Ciaccia, C., “Okta surges as Q3 results, forecast blow away expectations,” Seeking Alpha, November 30, 2022; https://seekingalpha.com/news/3912714-okta-surges-as-q3-results-forecast-blow-away-expectations.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Why Investments Into Metaverse Technology More Than Doubled in 2022

Posted on December 19, 2022December 18, 2023 by Veronica Carlasuc

Most people believe the emerging metaverse is used just for games and virtual meetings. It’s not. Early metaverse platforms are already being used by millions of people and it’s having a big economic impact. That’s why billion-dollar companies from around the world are rushing in to invest in the metaverse.

A virtual world that mirrors our own, the metaverse will transform daily lives, where users interact with colleagues and friends, travel to foreign countries, buy properties, build homes, role play, and get pilot licenses so they can fly to exotic destinations for vacations.

There’s more to the metaverse than gaming and virtual meetings. There are massive business opportunities in the metaverse, as well. From film making, to manufacturing, to medicine, augmented reality is opening up new frontiers for creativity. It’s a trillion-dollar opportunity that’s attracting the attention of some of the world’s biggest companies, including Meta, Microsoft, and NVIDIA.

In the first five months of 2022, private equity firms, venture capitalists, and corporations invested over $120 billion in the metaverse. More than double what was invested in all of 2021.¹

It’s not just big tech companies and investors that will benefit from the metaverse, however. It offers tremendous opportunities for small business owners and entrepreneurs anywhere on the planet to create and share their products or services with everyone on the platform in real-time.

The metaverse may still be in its infancy but its not expected to take long for it to have a serious impact on global gross domestic product (GDP), with current impact estimates ranging from $1.5 trillion per year by 2030 to $5 trillion a year by 2031.

In 2021, the global GDP was $96.2 trillion. In less than a decade, the metaverse could account for as much as 5.2% of global GDP. And it’s just getting started.²

Updates on Specific Metaverse Companies

Tencent’s Immersive Convergence

Tencent Holdings Ltd. published a paper entitled Immersive Convergence. The white paper details how Immersive Convergence is a model that integrates both the digital economy and the real world to create an immersive experience that allows users to perceive, connect, and interact with both worlds through various terminals and platforms.³

With breakthroughs in software and hardware technologies, including cloud computing, artificial intelligence (AI), the Internet of Things (IoT), 5G, machine learning (ML), digital twins, extended reality, the metaverse, and blockchain, there are a growing number of opportunities for Immersive Convergence to integrate the virtual and physical worlds.

Tencent has already released a number of products and tools that address remote interaction and digital twins. It has also released intelligent products that are integrated into AI. Meanwhile, the company’s Orca-distributed cloud operating system provides high-performance computing, low-latency networks, and high-performance storage—technology that is imperative for infinite computing.

Alibaba’s Metaverse Solutions

Alibaba Cloud, the digital technology backbone of Alibaba Group, has unveiled new products and committed $1 billion to support partners’ technology innovation and market expansion with Alibaba Cloud.⁴

Alibaba Cloud provides a comprehensive suite of cloud services including elastic computing, network virtualization services, large-scale computing, big data analytics, a machine learning platform, and IoT services to over 11,000 partners worldwide.

For example, together with JP Games, Japan’s leading game development studio, Alibaba Cloud unveiled a set of new services to create virtual spaces and realistic avatars for customers operating in the metaverse.

For MetaverseXR, Thailand’s leading metaverse company, Alibaba Cloud provided a suite of metaverse solutions for the Thai market to meet the growing demand for Web 3.0 products.

Alibaba Cloud is also collaborating with OnFinality, a leading New Zealand-based blockchain infrastructure provider, to offer cloud computing capability and a network for Web 3.0 developers looking to scale globally.

Investing in the Metaverse with MESH ETF

MESH ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Tencent Holdings Ltd. made the largest contribution to the Fund, followed by Taiwan Semiconductor Mfg. Co. Ltd. and Alibaba Group Holding Ltd. The largest detractors to performance for the month were Take-Two Interactive Software, Inc, followed by Coinbase Global Inc. and Roblox Corp.

For more blogs like this, insight on investing, and updates on related investment products, sign up for our weekly newsletter here.

Sources:

“How will businesses use the metaverse?” The Economist, November 24, 2022; https://www.economist.com/films/2022/11/24/how-will-businesses-use-the-metaverse.
O’Neill, A., “Global gross domestic product (GDP) at current prices from 1985 to 2027,” Statista, last accessed December 6, 2022; https://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/.
“Tencent x Accenture Immersive Convergence White Paper,” Tencent Holdings Ltd., September 28, 2022; https://staticintl.cloudcachetci.com/yehe/backend-news/Tencent%20x%20Accenture_Immersive%20Convergence%20Whitepaper.pdf.
“Alibaba Cloud Unveils Strategic Roadmap for International Business,” Alibaba, September 22, 2022; https://www.alibabagroup.com/en-US/document-1509741131389206528.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Global Video Game Industry Outpacing the Box Office

Posted on December 17, 2022December 18, 2023 by Veronica Carlasuc

The gaming industry is growing at a robust pace. In fact, the pandemic has really accelerated growth in the video games industry, and the ripple effects are still being felt. In 2022, the video games industry is expected to be worth $170.0 billion—that’s five times as much as the global box office.

So far, the biggest game of the year has been Call of Duty: Modern Warfare II. It took this game just 10 days to hit sales of $1.0 billion. Compare that to the highest grossing movie of 2022, Top Gun: Maverick—it took the film a whole month to gross $1.0 billion after being released.¹

That said, the box office and video game industry are still closely linked. Electronic Arts Inc. said recently that it has ironed out a deal to develop three games inspired by characters in the Marvel Cinematic Universe (MCU). This deal gives Electronics Arts access to one of the biggest and well-known entertainment franchises in the world.

It is also a big win for Electronics Arts since Marvel character-based games could bring in new customers who may not be too keen on the company’s existing brands like FIFA.

The first video game Electronics Arts is developing will be based on Iron Man. It will be a single-player action-adventure game for PCs and consoles. The company hasn’t elaborated much on how it plans to use the Marvel character and it hasn’t provided a timetable. However, it will be a video game based on Iron Man’s history and original story.²

Beyond everything else, there’s a lot of buzz around what’s happening with Microsoft Corp.’s acquisition of Activision Blizzard, Inc. It has gotten a lot of attention from regulators. This is Microsoft biggest acquisition and one of the largest in the history of the video game industry.

Regulators from 16 territories have probed this takeover by Microsoft. The Federal Trade Commission (FTC) is expected to make a decision about it, while Britain’s Competition and Markets Authority (CMA) and the European Commission have looked into this deal in depth.¹

GAMING COMPANY SPECIFIC UPDATES

NetEase Inc.

NetEase Inc., one of the biggest gaming companies in China, is experiencing a setback as Activision Blizzard will be suspending most of its games in China due to the expiration of licensing agreements with NetEase.

Blizzard said the two parties couldn’t reach a deal to renew an agreement. With this, the 14-year deal between the two gaming companies will end and most of Blizzard’s titles will stop operating in China.³

Playstudios Inc.

Playstudios Inc., the developer and publisher of the playAWARDS loyalty platform and various games, including Tetris, Solitaire, Spider Solitaire, Soduku, myVEGAS Blackjack, and myVEGAS Bingo, posted strong financial performance for the third quarter of 2022.

Andrew Pascal, CEO of Playstudios said that despite macroeconomic headwinds, the company was able to hold its daily active users (DAU) and monthly active users (MAU) flat compared to the previous quarter.

Furthermore, the company is encouraged by the recent acquisition of Brainium and its portfolio of 10 highly engaging casual games that have close to two million DAU. The company views Brainium as an excellent complement to Playstudios’ existing portfolio and an important aspect when it comes to their playAWARDS expansion.⁴

Investing in Video Games with HERO ETF

Interested in a diversified approach to investing in video games? Evolve E-Gaming Index ETF (TSX Ticker: HERO) may be the right investment for you. HERO ETF gives investors access to equity securities of companies, listed domestically and globally, with business activities in the gaming industry. This ETF invests in companies involved in hardware, software, and services relating to the electronic gaming industry. Learn more about this fund by clicking here.

HERO ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, NetEase Inc. made the largest contribution to the Fund, followed by Nexon Co Ltd. and Krafton Inc. The largest detractors to performance for the month were Embracer Group Ab. followed by Take-Two Interactive Software and Roblox Corp. On the last rebalance, these securities were added to the portfolio: Neowiz, Nexon Games Co Ltd., Gamania Digital Entertainment Co Ltd., Digital Bros SpA, Playstudios Inc., and Sciplay Corp.

For the latest information on investing in video games and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

“Microsoft, Activision Blizzard and the future of gaming,” The Economist, November 29, 2022; https://www.economist.com/business/2022/11/29/microsoft-activision-blizzard-and-the-future-of-gaming.
Shaw, L., “Electronic Arts Strikes Three-Game Deal With Marvel,” BNN Bloomberg, October 31, 2022; https://www.bnnbloomberg.ca/electronic-arts-strikes-three-game-deal-with-marvel-1.1839605.
Liao, R., “Blizzard ends 14-year licensing deal with NetEase in China,” TechCrunch, November 17, 2022; https://techcrunch.com/2022/11/16/blizzard-ends-14-year-licensing-deal-with-netease-in-china/.
“PLAYSTUDIOS, Inc. Announces Third Quarter Results,” Yahoo! Finance, November 8, 2022; https://finance.yahoo.com/news/playstudios-inc-announces-third-quarter-211500395.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Innovative Industries Focused on Advancements in Technology

Posted on December 13, 2022December 18, 2023 by Veronica Carlasuc

Automobile Innovation: Autonomous Driving and Tax Credits

NIO recently announced that it will be working with Tencent, a gaming, social media, and cloud computing giant in China, on autonomous driving and high-definition mapping. This move comes as XPeng and Chinese e-commerce giant Alibaba opened a computing center for training software for driverless cars.¹

General Motors Co., on the other hand, says their electric-vehicle program will be profitable by 2025 and forecasts that the annual revenue growth over the next three years will be around 12%, with electric vehicle sales being the primary driver of the growth.

Furthermore, the company expects its electric vehicles to be eligible for consumer tax credits of up to $3,750 per vehicle next year, and the company will start sourcing production of battery materials to qualify for the full $7,500 tax credits.²

Cybersecurity: Cloud and Data Center Vulnerabilities

Cloud Computing: AWS Chip and Pledge

Amazon.com Inc.’s cloud-computing unit, Amazon Web Services (AWS), is introducing a new version of its Graviton chips, designed to power high-end computing and help in tasks such as weather forecasting and gene sequencing.

This opens doors for AWS to rent computing power to its customers which is more cost-effective than renting time on processors built by companies such as Intel Corp., Nvidia Corp., and Advanced Micro Devices Inc. Furthermore, by introducing the new chip, Amazon can compete directly with the above-mentioned companies, which are the largest suppliers of chips.⁴

In addition, Amazon’s AWS recently announced an “AWS Digital Sovereignty Pledge”.

With this pledge, the cloud computing giant made a promise that customers will have full control over the location of their data within AWS, have control over how it’s accessed, and have the ability to encrypt it everywhere.

As part of the pledge, AWS has also vowed to make its cloud stronger against any network disruption and natural disasters.⁵

E-Gaming: Video Games and the Box Office

Electronic Arts Inc. said recently that it has ironed out a deal to develop three games inspired by characters in the Marvel Cinematic Universe (MCU). This deal gives Electronics Arts access to one of the biggest and most well-known entertainment franchises in the world.⁷

5G: T-Mobile and Citigroup

T-Mobile US Inc., held by the fund and one of the largest 5G wireless carriers in the U.S., is working with Citigroup Inc. to create a fiber-optic network through a joint venture or a commercial partnership that could be worth as much as $4.0 billion.

The company is aiming to target the home-broadband market through fibre-optic networks that generally require immense investment. Although no deal has been inked yet, it would be a big step for the company. T-Mobile doesn’t currently own any fibre networks like its peers and leases the capacity for its mobile-phone network.

T-Mobile could also get help from a $100-billion fund created by the U.S. government to improve broadband.⁸

Robotics & Automation: Intel’s Restructuring and Competitiveness

Intel Corp, held by the fund and the world’s largest semiconductor chip manufacturer, recently revealed that it will be splitting its graphic chips unit into two. This decision will involve combining the consumer graphics unit with Intel’s client computing group (a unit that makes chips for personal computers) and merging the accelerated computing teams with its data center and artificial intelligence (AI) unit.

Intel Corp believes that this division will better position the company to compete with Nvidia Corp and Advanced Micro Devices as it doubles down on accelerated computing. Currently, this growing segment is dominated by Nvidia.⁹

Fintech: J.P. Morgan Payments and Mastercard

J.P. Morgan Payments and Mastercard have launched Pay-by-Bank in the U.S. and are expecting it to expand in 2023.

At its core, Pay-by-Bank is an Automated Clearing House (ACH) payment that allows consumers to share their financial data with trusted parties to pay bills directly from their bank account with superior security. With this, consumers won’t have to worry about knowing factors like routing and account numbers each time they attempt to pay bills. Furthermore, for billers and merchants, it makes the process of onboarding customers easy, and helps them reduce their costs and risks when it comes to bank account information.

Pay-by-Bank could be beneficial for those who engage in making/receiving recurring payments such as utilities, tuition, insurance, healthcare, rent, and others.

Billers and merchants that have customers paying with ACH can integrate the J.P. Morgan Payments Pay-by-Bank solution on their existing payments page. When checking out, consumers select the “Pay-by-Bank” option, and after verifying themselves, they could complete the payment.¹⁰

Genomics: Extending Lifespans and Innovative Medications

Looking ahead to the next 100 years, research published in Nature Communications suggests that under the right circumstances, humans could live anywhere from 120 to 150 years of age in the near future.¹¹

A big part of increasing the average life expectancy at birth is having access to innovative medications and healthcare. Pharmaceutical companies that are working on aging research, drug discovery, and biomarker development include Novartis, Life Biosciences, and startups such as BioAge Labs and Cambrian Biopharma.

Bristol Myers Squibb, a multinational pharmaceutical company held by the fund, recently announced the results of new research from its multiple myeloma portfolio. The company’s ongoing research and promising results demonstrate the advancements they have made in combatting the disease and further show the company’s commitment to providing patients with the ability to receive tailored treatment options that generate the best possible outcomes.

Currently, multiple myeloma is an extremely challenging disease to manage and it affects patients of varying demographics and lifestyles. While scientific advances have helped to improve patient survival rates, the disease nonetheless greatly impacts one’s quality of life.¹²

Investing in Disruptive Innovation with EDGE ETF

The award-winning Evolve Innovation Index Fund provides access to global companies involved in disruptive innovation across a broad range of industries, including cybersecurity, cloud computing, eGaming and eSports, automobile innovation, 5G, FinTech, genomics, and robotics and automation

Portfolio Strategy and Activity

For the month, GDS Holdings Ltd. made the largest contribution to the Fund, followed by Arqit Quantum Inc. and Polestar Automotive. The largest detractors to performance for the month were Sentinelone Inc., followed by Edgio Inc. and Telos Corporation. On the last rebalance, FANUC Corp., Argenx SE, Waters Corp, and Block Inc. were added to the fund.

For the latest information on investing in innovation and industry updates on related investment products, sign up for our weekly newsletter here

Sources:

Kharpal, A., “Chinese Tesla rival Nio and giant Tencent partner to work on self-driving tech,” CNBC, November 29, 2022; https://www.cnbc.com/2022/11/29/china-tesla-rival-nio-and-tencent-partner-to-work-on-self-driving-tech.html.
Welch, D., “GM sees sales rising 12% yearly through 2025, mostly from EVs,” BNN Bloomberg, November 17, 2022; https://www.bnnbloomberg.ca/gm-sees-sales-rising-12-yearly-through-2025-mostly-from-evs-1.1848076.
Shacklett, M., “Top cybersecurity threats for 2023,” TechRepublic, November 28, 2022; https://www.techrepublic.com/article/top-cybersecurity-threats/.
King, I. and Day, M., “Amazon’s New Chip Moves AWS Into High-Performance Computing,” BNN Bloomberg, November 28, 2022; https://www.bnnbloomberg.ca/amazon-s-new-chip-moves-aws-into-high-performance-computing-1.1852171.
Lardinois, F., “AWS announces Digital Sovereignty Pledge,” TechCrunch, November 28, 2022; https://techcrunch.com/2022/11/28/aws-announces-digital-sovereignty-pledge/?guccounter=1.
“Microsoft, Activision Blizzard and the future of gaming,” The Economist, November 29, 2022; https://www.economist.com/business/2022/11/29/microsoft-activision-blizzard-and-the-future-of-gaming.
Shaw, L., “Electronic Arts Strikes Three-Game Deal With Marvel,” BNN Bloomberg, October 31, 2022; https://www.bnnbloomberg.ca/electronic-arts-strikes-three-game-deal-with-marvel-1.1839605.
Tan, G., Baker, L., and Moritz, S., “T-Mobile Seeks Fiber-Optic Venture Aimed at Home Internet,” BNN Bloomberg, November 7, 2022; https://www.bnnbloomberg.ca/t-mobile-seeks-fiber-optic-venture-aimed-at-home-internet-1.1842871.
“Intel splits graphic chips unit into two,” Yahoo Finance, December 21, 2022; https://finance.yahoo.com/news/intel-splits-graphic-chips-unit-200222969.html.
“J.P. Morgan and Mastercard modernize account-based payments with innovative ‘pay-by-bank’ solution,” Mastercard, November 9, 2022; https://www.mastercard.com/news/press/2022/november/j-p-morgan-and-mastercard-modernize-account-based-payments-with-innovative-pay-by-bank-solution/.
“Longitudinal analysis of blood markers reveals progressive loss of resilience and predicts human lifespan limit,” Nature Communications, May 2021; https://www.nature.com/articles/s41467-021-23014-1.
“Bristol Myers Squibb Announces First Disclosures and New Data at ASH 2022, Demonstrating Commitment to Raising Standards in Treatment Through Broad Multiple Myeloma Portfolio,” Bristol Myers Squibb, December 12, 2022; https://news.bms.com/news/details/2022/Bristol-Myers-Squibb-Announces-First-Disclosures-and-New-Data-at-ASH-2022-Demonstrating-Commitment-to-Raising-Standards-in-Treatment-Through-Broad-Multiple-Myeloma-Portfolio/default.aspx.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Life Expectancy Extends With Access to Innovative Drugs and Healthcare

Posted on December 11, 2022December 18, 2023 by Veronica Carlasuc

Recent data shows that the average life expectancy at birth has more than doubled over the last 100 years due to increased healthcare spending, innovative advancements, and discoveries in the field of medicine. While life expectancy has significantly increased overall, the average life expectancy varies in each country, especially between developed and developing nations.¹

The U.S., which spends the most per capita ($10,921) on healthcare, has an average life expectancy of just 77.3 years, far less than many countries that spend a lot less. Japan, which spends $4,360 per capita, has a life expectancy of 85 years. Canada spends $5,048 per capita with a life expectancy of 81.7 years.

Perhaps not surprisingly, less developed countries spend the least amount on healthcare and also have the lowest life expectancy. Chad, which spends $30 per capita annually, has the lowest life expectancy of 54.4 years. Lesotho, a landlocked county in South Africa, spends $124 per capita and has a life expectancy of 55 years.

One way to increase the average life expectancy at birth is having access to innovative medications and healthcare. Pharmaceutical companies that are working on aging research, drug discovery, and biomarker development include Novartis, Life Biosciences, and startups such as BioAge Labs and Cambrian Biopharma. And the longer people live, the more likely various healthcare treatments, services, and products will be needed for a growing, aging population.

A major trend in the field of aging research and drug discovery is the rapid development of artificial intelligence (AI) and machine learning (ML). Thanks to both AI and ML, Pfizer-BioNTech and Moderna were able to sequence, develop, and launch vaccines in less than a year.³

Developments of Two Leading Healthcare Companies

AstraZeneca plc

AstraZeneca plc. announced plans to acquire Neogene Therapeutics Inc., a privately held, global clinical-stage biotechnology company for $320 million. Neogene is pioneering the discovery, development, and manufacturing of next-generation T-cell receptor therapies (TCR-Ts) that provide a novel cell therapy approach for targeting cancer.⁴

The company also announced in November that an expert panel of the European Medicines Agency (EMA) has recommended approving Enhertu (trastuzumab deruxtecan) in the European Union as a treatment for adults with previously treated HER2-positive advanced gastric cancer. The drug is being jointly developed and commercialized by AstraZeneca and Daiichi Sankyo.⁵

Back in August AstraZeneca announced that Enhertu was approved in the U.S. by the Food and Drug Administration (FDA) as the first HER2-direct therapy for patients with HER2-low metastatic breast cancer. Regulatory approval for Enhertu is also under review in Japan and several other countries.⁶

Siemens AG

Siemens AG announced that its Siemens Healthineers segment unveiled its latest MRI scanner designed for mobile use, the Magnetom Viato.Mobile, which features a patient bore of 70 centimetres.⁷

The bore is the hole in which patients lie down inside during the MRI. A traditional MRI has a bore of 60 centimeters, which many users say could feel claustrophobic.

The Magnetom Viato.Mobile is installed in a trailer, providing greater flexibility in deploying imaging. Operation and service of Magnetom Viato.Mobile can be done remotely, allowing it to be used almost anywhere, while experts provide support from another location. This results in fewer staff and means professionals can work from home if need be.

Siemens Healthineers is a segment of Siemens that develops, manufactures, and sells various diagnostic and therapeutic products and services. It also provides clinical consulting services.

LIFE ETF: Investing in the Healthcare Industry

The Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip healthcare companies with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. The LIFE ETF is available in hedged, unhedged, and USD classes.

LIFE ETF Portfolio Strategy and Activity

For the month, Siemens AG made the largest contribution to the Fund, followed by AstraZeneca plc and Novo Nordisk A/S. The largest detractors to performance for the month were Roche Holdings AG and Medtronic PLC. On last rebalance, these securities were added to the portfolio: Siemens AG and Zoetis Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Germany and Britain.

For the latest information on investing in healthcare and updates on related investment products, sign up for our weekly newsletter here.

Sources:

Du, T.,“Charted: Healthcare Spending and Life Expectancy, by Country,” Visual Capitalist, November 13, 2022; https://www.visualcapitalist.com/cp/healthcare-spending-versus-life-expectancy-by-country/.
“Longitudinal analysis of blood markers reveals progressive loss of resilience and predicts human lifespan limit,” Nature Communications, May 2021; https://www.nature.com/articles/s41467-021-23014-1.
“Application of artificial intelligence and machine learning for COVID-19 drug discovery and vaccine design,” Oxford University Press, November 2021; https://pubmed.ncbi.nlm.nih.gov/34410360/.
“AstraZeneca to acquire Neogene Therapeutics, accelerating ambition in Oncology cell therapy,” AstraZeneca plc, November 29, 2022; https://www.astrazeneca.com/media-centre/press-releases/2022/astrazeneca-to-acquire-neogene-therapeutics-accelerating-ambition-in-oncology-cell-therapy.html.
“Enhertu recommended for approval in the EU by CHMP for patients with previously treated HER2-positive advanced gastric cancer,” AstraZeneca plc, November 14, 2022; https://www.astrazeneca.com/media-centre/press-releases/2022/enhertu-recommended-for-approval-in-the-eu-by-chmp-for-patients-with-previously-treated-her2-positive-advanced-gastric-cancer.html.
“Enhertu approved in the US as the first HER2-directed therapy for patients with HER2-low metastatic breast cancer,” AstraZeneca plc, August 6, 2022; https://www.astrazeneca.com/media-centre/press-releases/2022/enhertu-approved-in-the-us-for-her2-low-mbc.html.
“Siemens Healthineers introduces new mobile magnetic resonance imaging scanner Magnetom Viato.Mobile, Siemens AG, November 28, 2022; https://www.siemens-healthineers.com/press/releases/magnetom-viato-mobile.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Updates on Cloud Industry Leader AWS

Posted on December 9, 2022December 18, 2023 by Veronica Carlasuc

Amazon.com Inc.’s cloud computing unit, Amazon Web Services (AWS), is introducing a new version of its Graviton chips, designed to power high-end computing and help in tasks such as weather forecasting and gene sequencing.

In addition, Amazon’s AWS recently announced an “AWS Digital Sovereignty Pledge”.

With this pledge, the cloud computing giant made a promise that customers will have full control over the location of their data within AWS, how it’s accessed, and the ability to encrypt it everywhere.

As part of the pledge, AWS has also vowed to make its cloud stronger against any network disruption and natural disasters.²

In other news, Salesforce Inc., held by the fund, reported that Bret Taylor, the co-CEO of the company, will step down on January 31, 2023. Marc Benioff, the co-founder of the cloud software company will hold the position alone.

Bret Taylor climbed through the ranks at Salesforce, which makes his departure a surprise. Not too long ago, he served as president and chief operating officer. He joined the company when Salesforce purchased his productivity software startup Quip in 2016 and he played a critical role in Salesforce acquiring Slack for $27.1 billion.³

Updates on Specific Cloud Companies

Microsoft Corp.

Microsoft Corp. continues to make strong strides to improve its cloud computing business. In spite of being in battle with the Federal Trade Commission over Activision Blizzard Inc., the company announced the acquisition of Lumenisity Limited.

Lumenisity offers hollow core fiber (HCF) solutions. According to the company, this acquisition will help Microsoft optimize its global cloud infrastructure. For Microsoft’s Cloud Platform and Services customers, it means strict latency and security requirements. This technology could help customers in healthcare, financial services, manufacturing, retail, and government.⁴

DocuSign Inc.

DocuSign Inc., a company that is focused on providing solutions for signing documents electronically, reported stronger-than-expected financial performance and raised its outlook for full-year sales.

Wedbush’s analyst Dan Ives said this is a step in the right direction for the company, but a lot of work is still needed to bring investor confidence back given the probability of a difficult operating environment ahead.

Analysts at Evercore ISI led by Kirk Materne stated that the new CEO initiatives seem to be working, and customer growth is decent. However, the stock price may not move until billings start to grow.⁵

DATA ETF: Investing in the Cloud Computing Industry

DATA ETF Portfolio Strategy and Activity

For the month, SAP SE made the largest contribution to the Fund, followed by Microsoft Corp. and Oracle Corp. The largest detractors to performance for the month were Amazon.com Inc., followed by Zoominfo Technologies Inc., and Crowdstrike Holdings Inc. On the last rebalance, these securities were added to the portfolio: Concentrix Corp. and DocuSign Inc.

Stay updated with the latest information on cloud computing and related industries by signing up for our weekly newsletter.

Sources:

King, I. and Day, M., “Amazon’s New Chip Moves AWS Into High-Performance Computing,” BNN Bloomberg, November 28, 2022; https://www.bnnbloomberg.ca/amazon-s-new-chip-moves-aws-into-high-performance-computing-1.1852171.
Lardinois, F., “AWS announces Digital Sovereignty Pledge,” TechCrunch, November 28, 2022; https://techcrunch.com/2022/11/28/aws-announces-digital-sovereignty-pledge/?guccounter=1.
Novet, J., and Levy, A., “Bret Taylor steps down as co-CEO of Salesforce, leaving Marc Benioff alone at the helm,” CNBC, November 30, 2022; https://www.cnbc.com/2022/11/30/bret-taylor-steps-down-as-co-ceo-of-salesforce-marc-benioff-stays-on-as-ceo.html.
Bary, E., “Microsoft, in FTC crosshairs, announces another acquisition,” Market Watch, December 9, 2022; https://www.marketwatch.com/story/microsoft-in-ftc-crosshairs-announces-another-acquisition-2022-12-09?siteid=yhoof2.
Swint, B., “DocuSign Had a Good Quarter. Most Analysts Still Don’t Rate it a Buy,” Barron’s, December 9, 2022; https://www.barrons.com/articles/docusign-earnings-what-street-says-51670591773?siteid=yhoof2.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Electric Cars Expected to Be More Resistant to Recession

Posted on December 5, 2022December 18, 2023 by Veronica Carlasuc

As recession noise gets louder, businesses in various industries are bracing for rough economic conditions ahead. According to the data, however, electric vehicle makers and ancillary industries could see very little impact.

Electric vehicle sales are coming in strong, and the future looks bright. Li Auto Inc., NIO Inc., and XPeng Inc., all electric vehicle manufacturers based in China, recently reported increased deliveries of their electric vehicles.

While the recession may not be affecting EV sales, the unpredictability of China’s newest COVID-19 restrictions is. Outbreaks are at record-high levels, which has caused significant supply chain issues for automakers, such a VW. With a shortage of components available, it has been difficult to keep plants operating smoothly.¹

Despite uncertainty in China, NIO Inc. has also made big strides in the last month. The company reported 14,178 electric vehicle deliveries in November. This figure was up 41% from October and 9% above the monthly record set by the company back in June of 2022. Year-to-date, deliveries by NIO have amounted to 106,671 electric vehicles.²

NIO also recently announced that it will be working with Tencent, a gaming, social media, and cloud computing giant in China, on autonomous driving and high-definition mapping. This move comes as XPeng and Chinese e-commerce giant Alibaba opened a computing center for training software for driverless cars.³

General Motors Co., on the other hand, says their electric-vehicle program will be profitable by 2025, and forecasts that the annual revenue growth over the next three years will be around 12%, with electric vehicle sales being the primary driver of the growth.

Furthermore, the company expects their electric vehicles to be eligible for consumer tax credits of up to $3,750 per vehicle next year, and the company will start sourcing production of battery materials to qualify for the full $7,500 tax credits.⁴

Polestar Automotive

Polestar Automotive, a Swedish-based electric vehicle maker, reported its first ever gross profit as a public company in the most recent quarter. Its revenue jumped 105% year-over-year.

Through the first three quarters of 2022, Polestar delivered 30,424 electric vehicles globally, and says it’s on track to deliver 50,000 electric cars for the year. The company is also predicting strong sales in the fourth quarter of 2022.

The electric car manufacturer is also planning new product launches in the coming years. For 2023, Polestar is planning to reveal the Polestar 4 SUV. The Polestar 5 Grand Touring Sedan is expected to be revealed in 2024, and the Polestar 6 roadster in 2026.⁵

Aptiv PLC

Aptiv PLC, a company that is focused on designing, manufacturing and selling vehicle components, announced that it has completed the acquisition of an 85% equity stake in Intercable Automotive Solutions from Intercable S.r.l.

Intercable Automotive Solutions is an industry leader in manufacturing high-voltage busbars and interconnection solutions. Busbar is becoming a critical piece of electric vehicles’ electrical architecture. This deal with Aptiv is valued at €595 million and expected to be accretive to earnings per share starting in 2023.⁶

Investing in Auto Innovation with CARS ETF

If you’re looking to invest in electric vehicles and the future of the automobile, consider Canada’s first automobile innovation ETF, Evolve Automobile Innovation Index Fund (TSX Ticker: CARS). CARS ETF invests in global companies that are directly or indirectly involved in developing electric drivetrains, autonomous driving or network connected services for automobiles. Shift your investments into gear with CARS in your portfolio. For more information on this fund, please click here: https://evolveetfs.com/cars/

CARS ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Polestar Automotive made the largest contribution to the Fund, followed by Xpeng Inc. and Li Auto Inc. The largest detractors to performance for the month were Ess Tech Inc., followed by Lucid Group Inc. and Solid Power Inc. On last rebalance, these securities were added to the portfolio: Aptiv PLC, ChargePoint Holdings Inc., EVgo Inc., Polestar Automotive Holding, and SES AI Corp.

For the latest information on investing in cybersecurity and industry updates on related investment products, sign up for our weekly newsletter.

Sources:

“China’s Covid Policies Once Again Upending Car Manufacturing,” Bloomberg, November 28, 2022; https://www.bloomberg.com/news/articles/2022-11-29/china-s-covid-policies-once-again-upending-car-manufacturing.
Root, A. “NIO and Li Auto Just Delivered a Record Number of Cars. That’s Good News for Tesla, “ Barron’s, December 1, 2022; https://www.barrons.com/articles/nio-li-auto-tesla-delivery-numbers-51669894785?tesla=y.
Kharpal, A., “Chinese Tesla rival Nio and giant Tencent partner to work on self-driving tech,” CNBC, November 29, 2022; https://www.cnbc.com/2022/11/29/china-tesla-rival-nio-and-tencent-partner-to-work-on-self-driving-tech.html.
Welch, D., “GM sees sales rising 12% yearly through 2025, mostly from EVs,” BNN Bloomberg, November 17, 2022; https://www.bnnbloomberg.ca/gm-sees-sales-rising-12-yearly-through-2025-mostly-from-evs-1.1848076.
Subramanian, P., “Polestar stock surges after reporting first-ever profit as a public company,” Yahoo! Finance, November 11, 2022; https://finance.yahoo.com/news/polestar-stock-surges-after-reporting-first-ever-profit-as-a-public-company-184110904.html.
“Aptiv Completes the Acquisition of Intercable Automotive Solutions,” Yahoo! Finance, December 1, 2022; https://finance.yahoo.com/news/aptiv-completes-acquisition-intercable-automotive-123000959.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

The World Welcomes It’s 8th Billion Person: How Will That Impact Healthcare?

Posted on December 1, 2022December 15, 2022 by Veronica Carlasuc

Tuesday, November 15^th was declared “Day of 8 Billion” by The United Nations; the day the world’s population hit 8 billion people. The milestone comes just 11 years after the global population hit seven billion people.

While growth is expected to slow slightly over the coming decades, the human population is still projected to reach 8.5 billion by 2030, 9.7 billion by 2050, and peak at close to 10.5 billion during the 2080s. It will hover near that level until 2100.

The changes in population will be felt differently across the globe, with more than half of the projected increase up to 2050 to be concentrated in eight countries: the Democratic Republic of Congo (DRC), Egypt, Ethiopia, India, Nigeria, Pakistan, the Philippines, and Tanzania.

Over the same time frame, 61 countries will face population losses of at least one percent. The countries expected to face the biggest population declines (emigration, falling fertility rates, etc.) of more than 20%, include: Bulgaria, Latvia, Lithuania, Serbia, and Ukraine.

In addition to a rapidly growing global population, life expectancy is also expected to rise, from almost 73 in 2019 to just over 77 in 2050. By 2050, the proportion of those aged 65 years of age and older will jump from 10% in 2022 to 16% in 2050. To put that number into perspective, the number of people 65 and over will roughly double that of children under the age of five and around the same as those under 12.

These demographic changes will present major challenges to developed and developing nations.

Will Global Healthcare Spending Need to Increase?

Despite declines in gross domestic product (GDP) during the pandemic, healthcare spending remained stable in 2020 and 2021. Healthcare spending is defined as all public (funded by taxation or mandatory health insurance) plus all private (voluntary health insurance, out of pocket spending, and private other) spending.

While global healthcare spending was relatively flat in 2020 at USD $8.3 trillion, it grew 5.8% in 2021 to USD $8.8 trillion. That upward trajectory is expected to continue. By 2030, health expenditures will outpace GDP growth in almost every OECD (Organisation for Economic Co-operation and Development) country.

Some of the 38 countries in the OECD include Australia, Canada, Colombia, Denmark, France, Germany, Italy, Japan, Poland, Turkey, the United Kingdom, and the United States.

Healthcare spending per capita will grow at an average annual rate of 2.7% across the OECD from 8.8% in 2018 to 10.2% of GDP by 2030.

What Are Some of the Biggest Global Health Concerns?

On one hand, a global population of eight billion is a testament to the great progress we’ve made in medicine and health systems. On the other, a growing and aging population comes with its own unique health challenges.

Some of the biggest health risks will be diabetes, obesity, and hypertension (high blood pressure).

Between 2021 and 2045, the global expenditure for diabetes is expected to grow from USD $966 billion to just over USD $1 trillion. Other studies suggest the global cost of diabetes will soar to USD $2.5 trillion by 2030.
The global costs of treating obesity-related illnesses will be US $1.2 trillion each year starting in 2025. By 2025, there will be an estimated 2.7 billion overweight and obese people in the world—roughly a third of Earth’s population.
High blood pressureis the leading risk factor for death globally. In the U.S., nearly 1 out of 2 adults (around 108 million) have high blood pressure. That high blood pressure costs the U.S. about $131 to $198 billion each year. In Canada, eight million people, or one in four adults, are affected by hypertension.

As we’re learning, though, many diseases and illnesses are interconnected. The rise of obesity is one of the root causes in the rise of hypertension and diabetes. Hypertension is also a leading cause of stroke and heart disease.

There is also a growing body of evidence that links obesity and 11 different cancers: colon, rectal, pancreatic, ovary, kidney, endometrium, post-menopausal breast, biliary tract, multiple myeloma, esophageal, and bone marrow.

Other more common diseases today are expected to be less prominent in the future. Studies show that millennials are less likely to be smokers, making diseases related to smoking less common.

What Are Some of the Biggest New Drugs on the Market?

To combat some of the biggest global health concerns, researchers and drug companies have been hard at work. In addition, Health Canada, the U.S. Food and Drug Administration (FDA), and other global health agencies are always approving the launch of new drugs. In just 2021 alone, the FDA approved 55 new drugs and the agency has approved even more in 2022.

Some of the most anticipated drugs in 2022 treat everything from Alzheimer’s to diabetes, psoriasis, and lung cancer.

Camzyos: Camzyos (mavacamten) was the centerpiece of Bristol Myers Squibb’s $13.1 billion acquisitionof MyoKardia in 2020. The FDA approved Camzyos capsules to treat adults with hypertrophic cardiomyopathy, a rare disease that occurs when the heart muscle thickens and obstructs blood flow.
Mounjaro: Eli Lily’s Mounjaro (tirzepatide) injection received FDA approval in May, the first and only GIP (glucose-dependent insulinotropic polypeptide) and GLP-1 (glucagon-like peptide-1) receptor agonist for the treatment of adults with type 2 diabetes. Estimated sales for 2026 are pegged at $4.9 billion. As an added plus, while Mounjaro is not indicated for weight loss, it does lead to significant weight reduction.
Sotyku: Bristol Myers Squibb’s Sotyktu (deucravacitinib), an oral treatment for adults with moderate-to-severe plaque psoriasis, received FDA approval in May. Sales from Sotyktu are projected to generate $2.4 billion in sales by 2026.
Hemgenix: On November 23, the FDA approved Hemgenix, a new drug to treat adults with hemophilia B, a genetic bleeding disorder that affects roughly 1 in 40,000 people. Manufactured by CSL Behring, the price for the gene therapy treatment is $3.5 million, making it the most expensive drug in the world.
Lecanemab: One exciting drug that is expected to be approved by the FDA in 2023 is Lecanemab, the first drug shown to improve the symptoms of Alzheimer’s by slowing the disease. Eisai, a Japanese pharmaceutical firm, and Biogen a U.S. biotech, the makers of Lecanemab, have filed for “accelerated approval with the FDA”, which means it could be licensed as early as January 2023.

Healthcare spending has remained remarkably stable at a time when global macroeconomic headwinds are negatively impacting other sectors of the economy. The pandemic was responsible for unleashing broad public, government, and corporate support for healthcare investments.

And private equity and venture capitalists are continuing to increase their investments in healthcare. In fact, in 2021, they invested more than twice what they did in 2014. Again, this enthusiasm can be traced to the pandemic, which showed exactly what the pharmaceutical industry is capable of in a very short period of time.

It also points to an exciting future. Regardless of where we are in the economic cycle, or whether the world comes to a standstill because of a pandemic, people need healthcare, no matter what. That, coupled with an aging population and a life expectancy that has more than doubled over the last century, means overall healthcare spending will remain robust with pharmaceutical companies and drug manufacturers aggressively seeking out the next breakthrough drug.

Investing in Healthcare with LIFE ETF

Managed by an established team of industry veterans with a proven track record of success, Evolve ETFs creates investment products that make a difference. For more information, please visit www.evolveetfs.com or download our one-pager about LIFE ETF.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How the Pandemic Affected Cybersecurity

Posted on November 25, 2022December 9, 2022 by Veronica Carlasuc

It’s been a brutal year for the stock market—especially technology stocks—but certain areas of the tech industry have done better than others: software infrastructure, and in particular, cybersecurity stocks.

While keeping a company’s intellectual property and customer data safe has always been important, security awareness came more into focus during the pandemic as businesses adapted to a new operating model which saw millions of people working from home.

With more working from home, and more business meetings going virtual, companies were forced to develop and provide a remote, cyber-safe working environment. This was especially important when you consider the fact that even before the pandemic, 47% of people working from home fell for phishing scams.

How Did the Pandemic Affect Cyberattacks?

For cybercriminals, the pandemic was an opportunity to ramp up their criminal activities and exploit at-home vulnerabilities. It didn’t take long for cybercriminals to jump into action. Between February and May 2020, more than half a million people were hit by cyber breaches where the personal data of video conferencing users was stolen and sold on the dark web to other cybercriminals.

Part of the problem during 2020 and 2021 was that many businesses continued to allow employees to use their own devices. Moreover, a home working environment does not have the same sophisticated cybersecurity and detection measures that a corporate office does. On top of that, home Wi-Fi networks are a lot easier to attack.

It might be cheaper to allow employees to use their own devices at home, but the long-term ramifications are a lot more costly. In addition to a business’ reputation being hit, the average cost of a data breach resulting from remote work during the pandemic was around $133,000.

It’s a lucrative business for cybercriminals, which explains why cybercrime costs have soared over the last five years and are expected to continue to surge.

Just six years ago, the cost of cybersecurity attacks was around $325 million. In 2017, the number increased to $5 billion, and in 2019, it exploded to $11.5 billion. That’s just the beginning.

From 2020 to 2025, the global cost of cybercrime is projected to hit $10.5 trillion, expanding at a compound annual growth rate (CAGR) of 15%. To put that number into perspective, that’s larger than the annual damages from natural disasters and more profitable than the global trade of all major illegal drugs.

Cyberthreats have also evolved, which shows how vulnerable at-home workers are. Before the pandemic, roughly 20% of cyberattacks used previously unseen malware or methods. During the pandemic, that number rose to 35%. Some of the more sophisticated attacks used a form of machine learning that adapts to its environment and remains hidden.

Companies of every industry are at risk of being attacked, but some are more vulnerable than others. The most susceptible industries to cyberattacks include healthcare, financial services, retail, education, energy and utilities, government, and manufacturing.

Have Cyberattacks Slowed Down in 2022?

With more people returning to their offices, 2022 started out as a promising year for curbing cyberattacks. But after a lull during the first quarter, data breaches experienced significant growth in the second and especially the third quarter.

That doesn’t mean the first quarter of 2022 was uneventful. IBM and the Ponemon Institute looked at 550 global organizations that suffered a data breach in the 12-month period ending in March 2022. The average cost to clean up after the attack was USD$4.35 million. That’s up 2.6% from the previous 12-month period. In Canada, the average cost to the 25 organizations looked at was USD$5.4 million.

During the second quarter, the average number of weekly attacks increased 32% year-over-year. That pales in comparison to the third quarter, where the number of breaches climbed 70% quarter-over-quarter to 108.9 million.

Below are some of the biggest cyberattacks so far in 2022.

November 2022: Cyber Criminals Steal Medibank Data of 9.7 Million Customers

In early November, an unidentified hacking group threatened Medibank, the largest health insurance provider in Australia. The group said it possessed data on 9.7 million current and former customers and that if their demands were not met within 24 hours, they would publish the data. Medibank refused to pay the ransom and the patient information was leaked on the dark web.

September 2022: American Airlines Admits Data Breach

It took a while, but in September, American Airlines said it discovered a data breach in July. The company said the number of those impacted was very small—around 1,700 customers’ and employees’ data were stolen. The breach was a result of a phishing attack.

August 2022: 130+ Companies Hit in Oktapus Phishing Breach

In late August, it was announced that a months-long phishing campaign had compromised the data of at least 130 companies, including Cloudflare, DoorDash, Mailchimp, and Twilio. Targeted individuals were directed to fake authentication pages where they entered their login credentials.

July 2022: Hackers Try To Sell Data of 5.4 Million Twitter Users

On July 21, a hacker said they had the personal data of 5.4 million Twitter users, including phone numbers and email addresses. The asking price for the data was in excess of $30,000.

March 2022: Ronin Network Robbed of $620 Million in Crypto Heist

On March 23, a group of hackers helped themselves to $620 million in cryptocurrency from the Ronin Network. Most of the money was stolen from Axie Infinity, a game that uses cryptocurrency and NFTs.

It is thought the hackers, known as the Lazarus Group, have ties to North Korea. Although, the hermit regime has denied that it had anything to do with the Axie Infinity crypto heist and a 2014 hacking of Sony Pictures.

Cybersecurity Stocks Outperform in Bear Market

Perhaps not surprisingly, cybersecurity stocks have been bucking the stock market sell-off that has seen the tech-heavy Nasdaq fall into bear market territory and the S&P 500 stall in correction territory.

For all of the above reasons, cybersecurity is no longer viewed as a luxury. It’s a necessity. And, as we have seen, whether the economy is doing well, in a pandemic, or facing a recession, cybercriminals are hard at work.

Investing in Cybersecurity with CYBR ETF

If you’re looking to invest in a cybersecurity ETF, consider Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR). CYBR ETF invests in global companies involved in the cybersecurity industry. For more information, visit the fund page here: https://evolveetfs.com/cybr/.

For the latest information on cybersecurity investing and industry updates on related investment products, sign up for our weekly newsletter here.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Not all enhanced yield ETFs created equal, says portfolio manager

Posted on November 24, 2022November 25, 2022 by Veronica Carlasuc

Apple Defies Stock Market Sell-Off

Posted on November 23, 2022November 30, 2022 by Veronica Carlasuc

Technology stocks entered 2022 on a bullish note, with the tech-heavy Nasdaq having hit an all-time record closing high of 16,057.44 on November 19, 2021, and a record intraday high of 16,212.23 a couple days later, on Monday, November 22, 2021.

That momentum failed to materialize. In fact, the Nasdaq has been the worst-performing North American index this year. With just one month to go in the year, the Nasdaq is deep in bear market territory, down 31% over November highs. A bear market is defined as a loss of more than 20% from recent highs.

In comparison, the New York Stock Exchange is down 12% from its January highs. Meanwhile, popular indexes like the S&P 500 are down 11% year-to-date and the Dow Jones Industrial Average has lost just seven percent of its value this year.

Why Are Tech Stocks Experiencing an Oversized Hit?

One big reason tech stocks are experiencing an oversized hit is rising interest rates. During the pandemic, the Federal Reserve and Bank of Canada both slashed their key lending rate to make it cheaper to borrow in an effort to stave off a recession. Low interest rates make it easy to borrow, which is great for some tech stocks that need lots of capital to run their business.

While many early-stage tech stocks were reporting solid revenue growth, their value, and by extension share price, is based on the kind of earnings they expect to report in the future. This dynamic changes in a rising interest rate environment. Not only is it more expensive to borrow but higher rates mean it costs more to carry that debt load, which weighs down on a company’s bottom line.

On top of this, lower interest rates are designed to encourage us to spend, and in turn, juice the economy. Lower interest rates helped energize the economy too much. Which has resulted in decades-high inflation. To curb inflation and discourage borrowing, central banks have been raising their rates.

The Federal Reserve has raised its rates six times this year, from 0.5% to a range of 3.75% to 4.0%, the highest since early 2008. The Bank of Canada, meanwhile, has raised its key lending rate six times as well, jumping from 0.25% to 3.75%.

These actions have had a devastating impact on tech stocks. And not just early-stage companies. Even the FAANG stocks have taken a beating. FAANG is an acronym that refers to a group of big tech companies, including Facebook parent Meta Platforms, Apple, Amazon, Netflix, and Google parent Alphabet.

All of these companies have a history of outpacing the Nasdaq, but it’s been a different story in 2022, with all but one of those stocks lagging the index: Apple. While Apple’s stock may be down 14% this year (but up 7% over the last six months), that’s significantly better than Meta, which, as of this writing, is down 67% in 2022, Amazon, has lost 43% of its value in 2022, Netflix has fallen 52%, and Alphabet has retraced 32%.

Why Is Apple Bucking the Big Tech Sell-Off in 2022?

Despite stubbornly high inflation and rising interest rates, Apple has defied the big meltdown that has plagued the rest of the tech industry. It all comes down to Apple’s products and loyal customer base.

In the September quarter, revenues jumped eight percent year-over-year to a record $90.1 billion, topping Wall Street projections of $88.9 billion. The Cupertino, California-based company posted quarterly records for the Americas, Europe, Greater China, and the rest of Asia-Pacific.

Most importantly, Apple reported an earnings beat of $1.29 per share, ahead of Wall Street consensus of $1.27.

The outlook for Apple remains robust with the company’s services infrastructure as strong as ever:

Active devices hit another record high
iPhone and Mac reported quarterly record for upgrades
There was a double-digit jump in customers moving to iPhones
Sales of Mac computers hit a record high
Almost half of all Mac buyers are new
More than half of all iPad buyers are new
Two-thirds of Apple Watch buyers were new to the device

Given the state of the economy, how is Apple able to report strong sales and earnings growth when other tech titans are reporting weak results? It certainly doesn’t have anything to do with the company’s pricing. Apple is known for charging a premium for its products. And Apple still has to contend with the same kind of supply chain issues all of the other tech companies need to.

The fact is, Apple launches the kinds of products that people love. Customers continue to spend a lot of money on Mac computers and iPhones, with new customers flocking to its iPads and Apple Watches.

This kind of loyal customer base is not lost on Wall Street’s investing giants like Warren Buffett. Berkshire Hathaway, a holding company with a market cap of $677 billion, is the third largest institutional holder of Apple Inc, with 894.8 million shares, worth an estimated $135.4 billion. Apple is also Buffett’s largest holding.

Apple Once Again Becomes the World’s Most Valuable Company

Strong financial results, an equally strong outlook, and cooling inflation data is helping juice Apple’s stock and outpace the broader tech industry. Investor optimism has actually helped Apple overtake Saudi Aramco as the world’s most valuable company, again.

On November 10, Apple’s stock soared nine percent, more than $190 billion in a single day. It was a record one-day gain for a U.S.-listed stock. The one-day move helped Apple’s stock rally to a market cap of $2.34 trillion.

Investor optimism has increased since then. Over the following week, Apple’s market cap continued to climb, and currently stands at $2.36 trillion. It’s not just investors that are bullish on Apple, analysts are too, with nine increasing their earnings revisions over the last 30 days. Analysts are not taking a bearish stance.

Over the next two years, Wall Street expects Apple’s earnings to increase 11% from $6.11 in fiscal 2022 to $6.82 in fiscal 2024.

This bodes well for Apple’s stock in a high interest and inflation market and points to even better times for the company once inflation cools, interest rates start to retrace, and inflationary pressures subside.

Investing in FANGMA with Evolve ETFs

Gain exposure to six tech giants in one ETF. For more information visit the fund page here: https://evolveetfs.com/tech/

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The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

W3B Takeaways: FTX Fallout Leads Conversation

Posted on November 23, 2022November 25, 2022 by Veronica Carlasuc

8 Disruptive Industries Navigating Turbulent Markets

Posted on November 22, 2022December 18, 2023 by Veronica Carlasuc

Automobile Innovation: Steady Demand for EVs

Demand for electric vehicles remains resilient. Even with fears of an economic slowdown, car manufacturers are focusing on keeping production unchanged.

While Tesla Inc. recently cut its full-year growth forecast, the company brushed off worries of a recession and weakening demand. Instead, CEO Elon Musk said that Tesla expects to sell every car it makes and, regardless of whether or not a recession is on the horizon, they are not reducing their production.

Furthermore, Tesla’s board could be pursuing a share buyback in 2023, worth between $5 billion to $10 billion.¹

Cybersecurity: Cyberattacks Persist

Businesses and organizations continue to report data breaches and cyberattacks worldwide. In Australia, Medibank—an insurance company with 3.7 million customers—had a major privacy breach where customers’ data, including names, addresses, birth dates, national health care identification numbers, phone numbers, diagnoses, and treatments, were held for ransom by a cybercriminal.

Cybersecurity Minister, Clare O’Neil, said that it’s concerning that records of medical diagnoses and procedures has also been part of the data breach and deemed it a dog act.

The cybercriminal behind the data breach threatened to sell the data to third parties and identified 1,000 politicians, media personalities, actors, LGBTQ activists, and drug addicts within the data for exposure.²

Cloud Computing: Cloud Expansion

The cloud computing market continues to gain traction as more businesses and organizations are opting for cloud services and cloud solutions.

Recently, Microsoft reported that its Azure cloud business had increased by 35% in the quarter ending in September. Adjusted for currency, the cloud business grew 42%.

Microsoft isn’t the only cloud services company reporting growth. Last month, Amazon.com, Inc. reported that its cloud computing business, Amazon Web Services (AWS), had grown by 27% for the quarter ending in September.

Amazon’s Chief Financial Officer, Brian Olsavsky said that due to current macroeconomic pressures, customers are focusing on controlling cloud-related costs and the company is working to help customers optimize those costs. Similar comments were made by Microsoft, as well.³

E-Gaming: More Active Users

Roblox Corp., an interactive social gaming platform, said that its active daily users (ADUs) increased from 47.3 million in the second quarter of the fiscal year 2021 to 52.2 million in the second quarter of the fiscal year 2022. This represents a 10% increase in ADUs.

Furthermore, the company also provided some insights into the third quarter of fiscal year 2022. It said that for July 2022, its daily active users jumped 26% year-over-year to 58.5 million—a record high. Also, bookings for the month spiked between eight and 10% year-over-year in July to between $243 million and $247 million.⁴

It’s worth noting that parameters like active daily users are critical in measuring the success of a video game or application in the tech industry. A growing active daily users suggests that there’s more interaction, which could ultimately lead to higher revenues.

5G: Momentum Continues

T-Mobile US Inc., held by the fund, saw strong 5G-fuelled growth in the third quarter of this year, and this is making the company shrug off macroeconomic concerns. It expects momentum built in the recent quarter to continue into the next year.

T-Mobile’s 5G footprint increased in the third quarter, its customers growth was ahead of expectations, and it strengthened its 5G-based fixed-wireless access (FWA) service. In addition to this, the carrier continues to release its spectrum resources to feed 5G capacity and coverage needs.

CEO of T-Mobile, Mike Sievert, said that the carrier ended the quarter covering 250 million potential customers with is 5G network.⁵

Robotics & Automation: Tesla’s Optimus

According to a report by Data Bridge Market Research, the global indoor robot market was valued at $11.65 billion in 2021, and it’s expected to increase to $100.37 billion by 2029. This amounts to an impressive compounded annual growth rate of 25.50% between 2022 and 2029.⁶

Indoor robots are robotic systems used in enclosed environments that are independent and do certain tasks. These robots are increasingly being used in industries like defence, retail, domestic, healthcare, and others.

Tesla Inc., for instance, recently launched its humanoid robot, named Optimus, with hopes that this bet on artificial intelligence will reshape the future of physical work.

The robot runs on a Tesla computer chip, a 2.3 kilowatt-hour battery pack, and has Wi-Fi and LTE (long-term evolution) capabilities similar to a cellphone. It also comes with audio and cybersecurity features, and its hands have 11 degrees of freedom.

Once manufactured at scale, Optimus could be sold for less than $20,000.⁷

Fintech: Real-Time Payments

In the fintech sector, real-time payments could be the next big thing. At their core, real-time payments are payments that are made between bank accounts and cleared within seconds, regardless of holidays and weekends. Real-time payments could increase transparency and help consumers and businesses manage their finances better.

Mastercard Inc. is working to improve its real-time payment capabilities. In 2016, the company launched its real-time payment service named PromptPay in Thailand. That year, consumers in the country completed 48 digital transactions per year on average using PromptPay. In 2021, this figure was up to 200 transactions per year on average. PromptPay is gaining traction globally, as well.

Furthermore, Mastercard is developing real-time payment infrastructure for P27 Nordic Payments, a platform owned by Danske Bank, Handelsbanken, Nordea, OP Financial Group, SEB, and Swedbank. This will make payments across four different currencies easier and reduce inefficiencies across borders.⁸

Genomics: Treatment for Alzheimer’s

In recent months, Wall Street focused its attention on Biogen Inc and Eisai after they announced that their potential treatment for Alzheimer’s, Lecanemab, slowed cognitive decline by 27%, compared to a placebo, after an 18-month Phase 3 clinical trial.⁹

Eisai is expected to share additional data on the drug in late November at the Clinical Trials on Alzheimer’s Congress in San Francisco, after which, the drug will be filed for full approval in the U.S. by March of 2023.¹⁰

Biogen, which has a 50/50 profit sharing stake in Lecanemab, is preparing its commercial and manufacturing facilities in Switzerland for launch should the drug be prepared.

Investing in Innovation with EDGE ETF

Is your investment portfolio ready for the future? The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, e-gaming & esports, automobile innovation, 5g, fintech, genomics, and robotics & automation. Give your portfolio an edge.

EDGE ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Evolve Cloud Computing Index Fund made the largest contribution to the Fund, followed by Intuitive Surgical Inc. and Softbank Group Corp. The largest detractor to performance for the month was Marvell Technology Inc. On last rebalance, these securities were added to the portfolio: Danaher Corp., Thermo Fisher Scientific Inc., Fortinet Inc., Marvell Technology Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Japan and Canada.

Stay updated with latest information on investing in innovation and industry updates on related investment products, sign up for our weekly newsletter.

Sources:

Elliott, R., “Tesla Cuts 2022 Vehicle-Delivery Target, but CEO Musk Says Demand Remains Strong,” Wall Street Journal, October 20, 2022; https://www.wsj.com/articles/tesla-tsla-q3-earnings-report-2022-11666139620.
McGuirk, R., “Hacker holds Australian health insurer’s data for ransom,” CP24, October 20, 2022; https://www.cp24.com/world/hacker-holds-australian-health-insurer-s-data-for-ransom-1.6117142.
Savitz, E.J., “Cloud Stocks Fall After Earnings Results From Amazon, Microsoft,” Barron’s, October 28, 2022; https://www.barrons.com/articles/snowflake-stock-price-amazon-microsoft-51666985106?noredirect=y.
“Roblox Stock: Breaking Down Roblox By The Numbers, Here’s What Investors Need To Know,” Forbes, October 27, 2022; https://www.forbes.com/sites/qai/2022/10/27/roblox-stock-breaking-down-roblox-by-the-numbers-heres-what-investors-need-to-know/?sh=e9c28571cc61.
Meyer, D., “T-Mobile 5G Strength Powers Robust Q3,” sdx central, October 28, 2022; https://www.sdxcentral.com/articles/analysis/t-mobile-5g-strength-powers-robust-q3/2022/10/
“Indoor Robots Market to Grow at a Surprising Growth of USD 100.37 Billion with Excellent CAGR of 25.50% by 2029, Growth Factors, Segmentation, Size, Share, Trends and Opportunity Assessment,” Yahoo! Finance, November 10, 2022; https://finance.yahoo.com/news/indoor-robots-market-grow-surprising-060000116.html.
Siddiqui, F., “Elon Musk debuts Tesla robot, Optimus, calling it a ‘fundamental transformation’,” Washington Post, October 1, 2022; https://www.washingtonpost.com/technology/2022/09/30/elon-musk-tesla-bot/.
Hyman, V., “Your real-time guide to real-time payments,” Mastercard, November 9, 2022; https://www.mastercard.com/news/perspectives/2022/real-time-payments-what-is-rtp-and-why-do-we-need-instant-payments/.
“Lecanemab Confirmatory Phase 3 Clarity Ad Study Met Primary Endpoint, Showing Highly Statistically Significant Reduction Of Clinical Decline In Large Global Clinical Study Of 1,795 Participants With Early Alzheimer’s Disease,” Biogen Inc., September 27, 2022; https://investors.biogen.com/news-releases/news-release-details/lecanemab-confirmatory-phase-3-clarity-ad-study-met-primary.
Lee, J., “Biogen and Eisai make plans to take another Alzheimer’s drug to the FDA next year,” MarketWatch, October 26, 2022; https://www.marketwatch.com/story/biogen-and-eisai-make-plans-to-take-another-alzheimers-drug-to-the-fda-11666722397.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Microsoft Teams Up with Meta in the Metaverse

Posted on November 19, 2022December 18, 2023 by Veronica Carlasuc

The Metaverse is still in the early stages of development, not unlike the Myspace era during the early rise of social media. However, some companies have positioned themselves better than others for the future.

Facebook parent company, Meta Platforms, has been a big promoter for growth and development in the metaverse. In addition to actually changing its name to Meta Platforms, the company’s goal is to unlock the massive potential of the metaverse.

To participate in the metaverse users need to be able to interact with it. On October 25, the company began shipping its newest virtual reality (VR) headset, the Meta Quest Pro.¹

Meta Platforms has been making some other exciting moves into the Metaverse space. Meta and Microsoft Corp announced they are partnering to deliver an immersive virtual reality (VR) experience for work and play.²

As part of the venture Microsoft will be bringing some of its biggest apps and games, Teams, Office, Windows, and Xbox Cloud Gaming, to Meta’s Quest VR headsets.

Microsoft CEO, Satya Nadella, said that Microsoft Teams will integrate with Quest devices and that Microsoft will provide a way to stream Windows apps to Meta’s headsets. Microsoft’s streaming game service, Xbox Cloud Gaming, will be integrated into Quest devices sometime within the coming months.

Custom avatars will eventually be part of the experience and Horizon Workrooms (Meta’s VR space for collaboration) will connect with Teams, allowing users to join a Team meeting directly from Workrooms.

As for Xbox Cloud Gaming, on the Quest headsets, it will stream hundreds of games to a 2D VR screen, using existing Xbox controllers.

Autodesk and Epic Games

Autodesk Inc, a provider of 3D design, engineering, and entertainment software and services, recently launched a suite of new capabilities across Autodesk Construction Cloud. The new updates help construction project teams maximize their use of building information modelling (BIM).³

BIM is a highly collaborative interactive process that allows architects, engineers, contractors, and other construction professionals to plan, design, and construct a building within one 3D model.

Autodesk, which has long supported the architecture, engineering, and construction industry with a variety of interactive tools, recently announced a collaboration with Epic Games, the name behind Fortnite, to provide hyper-realistic 3D graphics, accelerating real-time, immersive design capabilities with an initial focus on architecture, engineering, and construction (AEC).⁴

Looking ahead, as members of the Metaverse Standards Forum, Autodesk and Epic will be looking to develop Metaverse-type experiences for customers beyond AEC industries.

eXp World Holdings and Virtual Reality

eXp Realty, the world’s fastest-growing real estate brokerage and a core subsidiary of eXp World Holdings, Inc., announced the launch of eXp Luxury, a luxury real estate program that leverages eXp Realty’s proprietary tools and technology.⁵

The cloud-based brand will help enhance eXp Realty’s customized market capabilities, including targeting advertising placement in its SUCCESS Magazine and premium brand partnerships. The program will also feature certification courses and coaching, masterminds and events, and exclusive access to a council of experienced eXp Luxury agents.

eXp World Holdings’ subsidiary, Virbela, is a virtual platform upon which the enterprise’s Metaverse could be built. Virbela is the first virtual world platform designed specifically to solve the challenges of remote collaboration. Through Virbela, users can build 3D virtual worlds for work, education, games, real estate, and events.⁶

Investing in the Metaverse with MESH ETF

Looking to invest in the metaverse? Consider the Evolve Metaverse ETF (MESH ETF), Canada’s first metaverse ETF. MESH ETF provides investors with an actively managed diversified portfolio of companies involved in the development of the metaverse. To learn more about MESH ETF, please click here: https://evolveetfs.com/mesh/.

MESH ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Roblox Corp made the largest contribution to the Fund, followed by eXp World Holdings Inc. and Autodesk. The largest detractors to performance for the month were Tencent Holdings Ltd, followed by NetEase Inc and Meta Platforms Inc.

Stay updated with latest information on investing in the metaverse and industry updates on related investment products, sign up for our weekly newsletter.

Sources:

Vanian, J., “Meta CEO Mark Zuckerberg debuts Meta Quest Pro VR headset that will cost $1,500,” CNBC, October 11, 2022; https://www.cnbc.com/2022/10/11/mark-zuckerberg-debuts-meta-quest-pro-vr-headset-that-will-cost-1500.html.
Teper, J., “Microsoft and Meta partner to deliver immersive experiences for the future of work and play,” October 11, 2022; https://blogs.microsoft.com/blog/2022/10/11/microsoft-and-meta-partner-to-deliver-immersive-experiences-for-the-future-of-work-and-play/.
“New Model-Based Workflows, Reality Capture and Extended File Support in Autodesk Construction Cloud Make BIM More Valuable to Construction Teams,” Autodesk, Inc., September 27, 2022; https://investors.autodesk.com/news-releases/news-release-details/new-model-based-workflows-reality-capture-and-extended-file.
“Autodesk and Epic Games to Deliver Real-Time, Immersive Design Capabilities to Customers,” Autodesk, Inc, September 27, 2022; https://investors.autodesk.com/news-releases/news-release-details/autodesk-and-epic-games-deliver-real-time-immersive-design.
“The Future of Luxury Real Estate Has Arrived at eXp Realty,” eXp Holdings, Inc., October 13, 2022; https://expworldholdings.com/press-releases/the-future-of-luxury-real-estate-has-arrived-at-exp-realty/.
“Virbela,” Virbela, last accessed November 16, 2022; https://www.virbela.com/.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How Tax-Loss Selling Can Boost Investors’ Portfolios

Posted on November 18, 2022November 18, 2022 by Veronica Carlasuc

If there was a mantra for investing, it would be “buy low, sell high.” After all, that’s the goal, to make money. But that doesn’t always happen. 2022 has been a challenging year for markets with geopolitical tensions, supply chain issues, rising inflation and record central bank rate hikes around the world. Both the S&P 500 and Nasdaq are in bear market territory, meanwhile the Dow Jones is nearly there. A bear market is typically defined as a loss of at least 20% from recent highs.

Fortunately, there’s a way for investors to turn losses from their non-registered investments (eg. stocks, bonds, mutual funds, ETFs) into a tax advantage.

Tax-loss selling (or tax-loss harvesting) is a tax strategy where investors sell an investment trading at a loss to offset capital gain taxes elsewhere in their portfolio. Selling an equity to register a loss might sound counter productive, but it’s an excellent tool that can help minimize your tax burden.

It’s an especially important option to consider as we get closer to the end of the year with investors looking for ways to reduce capital gains taxes.

What Is Tax-Loss Selling?

Tax loss selling is when you sell an investment within a non-registered account for less than the adjusted cost base (ACB). The ACB is the book value you paid for the investment plus any expenses related to the purchase, which can include any fees or commissions.

Selling an investment for less than the ACB results in a capital loss. Investors can use that loss to offset a capital gain within a non-registered account in the current tax year. It’s also possible to carry back tax losses for up to three tax years or carry them forward indefinitely.

What Is an Example of Tax Loss Selling?

The inclusion rate for capital gains in Canada is 50%, which means that you have to include 50% of your capital gains as income on your tax return. This is then taxed at an individual’s marginal tax rate. For example, if an investor makes a $20,000 profit on the sale of a stock, half of that, or $10,000, is taxable income. If the investor is in the 26% tax bracket, the taxes owned on that gain would be $2,600.

In other words, Archie buys 100 shares of a bank stock, ABC Ltd., for $10 per share, resulting in a total investment of $1,000. After a few months, the stock price of ABC Ltd. falls to $5 per share, resulting in a $500 loss. Archie decides to sell his shares and take the $500 loss.

Archie has not necessarily lost conviction in bank stocks, he has just lost conviction in ABC Ltd., so he takes his remaining $500 and invests it in another bank stock, XYZ Inc. It performs well and he sells XYZ Inc. for a $500 gain.

Archie would normally have to pay capital gains taxes on that $500, but because of the $500 he incurred in capital losses from his investment in ABC Ltd., he won’t owe any capital gains on this investment come tax season.

Can Tax-Loss Harvesting Be Used to Offset Losses in Registered Accounts?

The joys of investing in registered accounts like a Tax Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP) means that any capital gains are tax free. However, because you do not pay tax on investable income inside any registered accounts, this means you can’t use capital losses incurred in these accounts to offset gains in other accounts.

What Other Things Should I Know About Tax Loss Selling?

Superficial Loss

When you sell an investment and trigger a capital loss, the superficial loss rule kicks in. According to the rule, investors cannot deduct the capital loss if they buy an identical security within 30 days of the settlement date. The superficial rule also applies to options or a right to buy the security that was sold.

Going back to our previous example, Archie cannot sell ABC Ltd. for a loss and hope to claim the capital loss and then immediately repurchase the same stock at a lower price. The 30-day superficial loss rule is designed to prevent investors from taking advantage of the system in order to lower their income tax.

To that end, affiliates cannot make the purchase either. An affiliate, according to the CRA is:

You and your spouse or common-law partner
You and a corporation that is controlled by you or your spouse or common-law partner
A partnership and a majority interest partner of the partnership
A trust and its majority interest beneficiary (generally, a beneficiary who enjoys a majority of the trust income or capital) or one who is affiliated with such a beneficiary

Instead of waiting 31 days to repurchase JKL, Archie could purchase another security with similar exposure, such as an ETF, immediately after the sale of JKL. Archie could then switch back into JKL after the 30-day period if he wishes.

Year End Deadline

It is important to note that investors who use tax-loss harvesting to reduce their tax obligation for the current tax year need to keep in mind the settlement cycle of the investment instrument they are trading. Typically, most securities settle three business days after a sale is made. You can take advantage of tax-loss selling all year long, but in order to realize any losses, the securities must settle before the year-end.

In summary, it doesn’t matter what tax bracket you’re in, tax-loss selling is a simple and effective tax strategy for helping mitigate your tax burden if used appropriately.

About Evolve ETFs

With over $3.5 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing disruptive innovation ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

For more blogs like this, insight on investing, and updates on related investment products, sign up for our weekly newsletter here.

Disclaimer:

This is for information purposes only and should not be construed as tax advice. Given that each investor’s tax situation is unique, please consult a qualified tax advisor.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Optimisim vs. Skepticism in the Video Game Industry

Posted on November 15, 2022December 18, 2023 by Veronica Carlasuc

Market research firm NewZoo.com forecasts that 3.2 billion people around the world will play online games this year and that the video game market is expected reach $197.0 billion. As more and more people play mobile video games on phones and tablets, the market is growing approximately five percent annually. Currently, mobile video games are the largest segment.

However, with growing fears of a recession and rising inflation, analysts are questioning whether the video game market will remain resilient or whether it could face headwinds. In addition, as China represents about 20% of the gaming market, the crackdown from the Chinese government on video games licenses has only exacerbated the worries.

That said, many analysts are optimistic. The video game market is already larger than the Hollywood and U.S. sports industry combined, and a massive secular growth trend has begun.

A large number of gamers don’t see gaming and esports as discretionary spending, and it’s a staple for their social lives. Comparing the current environment to 2008 and 2009, there could be a rebound just like how there was a rebound after the global financial crisis when gaming spending dropped eight percent.¹

Gaming Companies Continue to Level Up

Roblox Corp.

Drecom Co Ltd.

Drecom Co., a Tokyo-based gaming company, said that their revenue in the first quarter of fiscal year ended on July 28^th was up 10% year-over-year, amounting to 2.93 billion yen.

Drecom Co. also marked the eighth anniversary of its flagship title ONE PIECE Treasure Cruise in the recent quarter, and the title made a stable contribution to the company’s overall earnings.

While there aren’t any major releases planned by the company in the second quarter of fiscal year 2022, sales are expected to be stable over the quarter.

For the second half of the fiscal year 2022, Drecom Co. is planning to introduce three new titles and this is expected to increase sales. Furthermore, development of additional features for some of the titles is getting pushed back from the schedule; however, it’s impact on earnings is expected to be unchanged.³

Investing in Video Games with HERO ETF

Evolve E-Gaming Index ETF (TSX Ticker: HERO), Canada’s first esports and video game exchange-traded fund (ETF), is one way you can access the world’s leading gaming companies in one investment solution.

Hero ETF Portfolio Strategy and Activity

For the month, Roblox Corp. made the largest contribution to the Fund, followed by Electronic Arts Inc. and Take-Two Interactive Software Inc. The largest detractors to performance for the month were Embracer Group Ab. followed by Bilibili Inc. and Netease Inc. On last rebalance, these securities were added to the portfolio: JoyCity Corp., Neptune Co., Drecom Co Ltd., Gumi Inc., and Netronix Inc. By weight, the Fund’s largest geographic exposure was to Japan, followed by the United States and Korea.

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter here.

Sources:

Mayers, A., “Looming recession a tailwind for gaming as consumers look for ‘cheap’ entertainment,” The Globe and Mail, October 17, 2022; https://www.theglobeandmail.com/investing/globe-advisor/advisor-etfs/article-looming-recession-a-tailwind-for-gaming-as-consumers-look-for-cheap/.
“Roblox Stock: Breaking Down Roblox By The Numbers, Here’s What Investors Need To Know,” Forbes, October 27, 2022; https://www.forbes.com/sites/qai/2022/10/27/roblox-stock-breaking-down-roblox-by-the-numbers-heres-what-investors-need-to-know/?sh=e9c28571cc61.
“FY 2022 First Quarter Result Apr 2022 – Jun 2022,” Drecom Co., July 29, 2022; https://drecom.co.jp/en/ir/EN%20Drecom%20%283793%29%20Ver.7%201Q%20FY2023%20Earnings%20View.pdf.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

New Drugs and Treatments Drive Growth in Healthcare

Posted on November 9, 2022December 18, 2023 by Veronica Carlasuc

Healthcare industry companies make news when they report strong financial results. They attract even greater attention when they announce positive test results or approval from the U.S. Food and Drug Administration (FDA), or similar agencies from around the world.

Biogen, which has a 50/50 profit sharing stake in Lecanemab, is preparing its commercial and manufacturing facilities in Switzerland for launch should the drug be prepared.

COMPANY SPECIFIC UPDATES

Bristol-Myers Squibb Co

Bristol-Myers Squibb Co announced positive topline results from its COMMANDS Phase 3 study of its blood disease drug Reblozyl. The Phase 3 study found that Reblozyl helped adult patients with very low, low, or intermediate risk myelodysplastic syndromes (MDS) better than an older anemia treatment.³

The positive results are a sign that Bristol-Myers is looking to expand the use of the drug, which it says could reach sales of $4 billion annually. Reblozyl is actually just one of eight new drugs that Bristol-Myers says will achieve combined sales of $25 billion in 2029.⁴

Gilead Sciences

Gilead Sciences has made a number of significant announcements lately. The company recently reported that its personalized cancer drugs, Yescarta and Tecartus, have been approved for sale in Europe by the European Commission for the treatment of relapsed or refractory acute lymphoblastic leukemia.⁵

In the opening days of November, Gilead announced that the U.S. Food and Drug Administration (FDA) approved the supplemental new drug application for Vemlidy which is used for the treatment of chronic hepatitis B virus Infection in pediatric patients 12 years of age and older.⁶

This approval expands on previous FDA approval of Vemlidy in adults living with this chronic liver disease.

Investing in Healthcare with LIFE ETF

LIFE ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Eli Lily and Company made the largest contribution to the Fund, followed by Bristol-Myers Squibb Co, and Merk & Co. Inc. The largest detractors to performance for the month were Medtronic PLC, followed by CSL LTD, and AstraZeneca PLC. On last rebalance, these securities were added to the portfolio: Gilead Sciences, Inc. and Stryker Corp. By weight, the Fund’s largest geographic exposure was to the United States, followed by Switzerland and Germany.

For the latest information on investing in healthcare and updates on related investment products, sign up for our weekly newsletter here.

Sources:

“Lecanemab Confirmatory Phase 3 Clarity Ad Study Met Primary Endpoint, Showing Highly Statistically Significant Reduction Of Clinical Decline In Large Global Clinical Study Of 1,795 Participants With Early Alzheimer’s Disease,” Biogen Inc., September 27, 2022; https://investors.biogen.com/news-releases/news-release-details/lecanemab-confirmatory-phase-3-clarity-ad-study-met-primary.
Lee, J., “Biogen and Eisai make plans to take another Alzheimer’s drug to the FDA next year,” MarketWatch, October 26, 2022; https://www.marketwatch.com/story/biogen-and-eisai-make-plans-to-take-another-alzheimers-drug-to-the-fda-11666722397.
“Bristol Myers Squibb Announces Positive Topline Results of Phase 3 COMMANDS Trial,” Bristol Myers Squibb, October 31, 2022; https://news.bms.com/news/corporate-financial/2022/Bristol-Myers-Squibb-Announces-Positive-Topline-Results-of-Phase-3-COMMANDS-Trial/default.aspx.
“JP Morgan Presentation January 10, 2022,” Bristol Myers Squibb, last accessed November 4, 2022; https://s21.q4cdn.com/104148044/files/doc_presentations/2022/Bristol-Myers-Squibb-JPM-2022-Presentation.pdf.
“Kite’s CAR T-cell Therapy Yescarta® Granted European Marketing Authorization for the Treatment of Relapsed or Refractory Follicular Lymphoma,” Gilead Sciences, Inc., June 28, 2022; https://www.gilead.com/news-and-press/press-room/press-releases/2022/6/kites-car-t-cell-therapy-yescarta-granted-european-marketing-authorization-for-the-treatment-of-relapsed-or-refractory-follicular-lymphoma.
“U.S. Food and Drug Administration Approves Vemlidy® (tenofovir alafenamide) for Treatment of Chronic Hepatitis B Virus Infection in Pediatric Patients,” Gilead Sciences, Inc., November 2, 2022; https://www.gilead.com/news-and-press/press-room/press-releases/2022/11/us-food-and-drug-administration-approves-vemlidy-tenofovir-alafenamide-for-treatment-of-chronic-hepatitis-b-virus-infection-in-pediatric-patients.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Recent Cyberattacks Targeted Personal Medical Records and Facebook User Data

Posted on November 7, 2022December 18, 2023 by Veronica Carlasuc

Not a day goes by it seems without cybersecurity-related issues. Businesses and organizations continue to report data breaches and cyberattacks worldwide.

Meta Platforms Inc., for example, recently revealed that roughly one million Facebook users might have had their accounts compromised due to issues with apps downloaded from Apple Inc.’s and Alphabet Inc.’s app stores.

The company identified over 400 malicious iOS and Android apps this year that targeted users to steal their login information. At their core, these apps look as if they are photo editors, mobile games, or health trackers, but instead are used to steal user information.

Apple said 45 of the 400 apps identified were on its App Store and have since been removed. Alphabet has also removed the malicious apps.¹

In Australia, Medibank—an insurance company with 3.7 million customers—had a major privacy breach where customers’ data, including names, addresses, birth dates, national health care identification numbers, phone numbers, diagnoses, and treatments, were held for ransom by a cybercriminal.

Cybersecurity Minister, Clare O’Neil, said that it’s concerning that records of medical diagnoses and procedures has also been part of the data breach and deemed it a dog act.

In Canada, cyber frauds are also on the rise. According to a report by the Better Business Bureau (BBB), online scams have increased 87% in Canada since 2015. The report said that 55% of more than 300,000 scams reported to the BBB since 2015 took place online, and 75% of those scams were unfortunately successful, resulting in loss of money.³

While cyberattacks and cybersecurity-related issues grow, mergers and acquisitions activities could also increase. Vista Equity Partners, a private equity firm run by billionaire Robert Smith, offered to buy cybersecurity software firm KnowBe4 Inc. for $24 per share in cash.

KnowBe4 Inc. offers security awareness training that teaches employees how to fend off malware, phishing, and other cybersecurity-related threats. It is also held by the fund. Vista Equity Partners’ offer gives the company a market value of $3.9 billion.⁴

COMPANY SPECIFIC UPDATES

ForgeRock Inc. Acquisition

ForgeRock Inc., a cybersecurity company focused on providing digital identity platforms globally, was recently in talks with private equity firm Thoma Bravo to be acquired for $2.3 billion.

ForgeRock would be the firm’s third purchase in the cybersecurity space.

Chip Virnig, a partner at Thoma Bravo, said that identity-centric cybersecurity solutions are critical for businesses when it comes to digital transformation and ForgeRock’s solutions combine both the advanced security and customer usability needed in the market.⁵

Check Point Software Technologies Ltd. Profitability

Check Point Software Technologies Ltd. is a leading provider of cybersecurity solutions around malware, ransomware, and other threats. Recently, the company reported solid financial performance for the third quarter of 2022.

While Check Point Software Technologies’ revenue increased and profitability improved during the third quarter of 2022, it also expanded its infinity platform by introducing a cybersecurity solution called Horizon. This cybersecurity solution is focused on improving defenses across networks, the cloud, and endpoints to deter any cyberattacks.⁶

Investing in the Cybersecurity Industry with CYBR ETF

If you’re looking to invest in cybersecurity, consider Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR). CYBR ETF invests in global companies involved in the cybersecurity industry. For more information, visit the fund page here: https://evolveetfs.com/cybr/.

CYBR ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Booz Allen Hamilton Holdings made the largest contribution to the Fund, followed by Fortinet Inc. and Check Point Software Tech. The largest detractors to performance for the month were SentinelOne Inc., followed by Zscaler Inc. and GDS Holdings Ltd. By weight, the Fund’s largest geographic exposure was to the United States, followed by Israel and Japan.

For the latest information on investing in cybersecurity and industry updates on related investment products, sign up for our weekly newsletter.

Sources:

Gillum, J., “Facebook Is Warning 1 Million Users About Stolen Usernames, Passwords,” BNN Bloomberg, October 7, 2022; https://www.bnnbloomberg.ca/facebook-is-warning-1-million-users-about-stolen-usernames-passwords-1.1829471.
McGuirk, R., “Hacker holds Australian health insurer’s data for ransom,” CP24, October 20, 2022; https://www.cp24.com/world/hacker-holds-australian-health-insurer-s-data-for-ransom-1.6117142.
Donnini, A., “October is Cyber Security Awareness Month. How secure are you?” CBC, October 11, 2022; https://www.cbc.ca/news/canada/london/cyber-security-awareness-month-1.6612068.
Fatunde, M., “Vista Equity Makes Offer for Software Security Firm KnowBe4,” BNN Bloomberg, September 19, 2022; https://www.bnnbloomberg.ca/vista-equity-makes-offer-for-software-security-firm-knowbe4-1.1820735.
Miller, R., “Thoma Bravo buys third identity company this year with $2.3B ForgeRock acquisition,” Techcrunch, October 11, 2022; https://techcrunch.com/2022/10/11/thoma-bravo-buys-third-identity-company-this-year-with-2-3b-forgerock-acquisition.
“Check Point Software Technologies Reports 2022 Third Quarter Financial Results,” Yahoo! Finance, October 27, 2022; https://finance.yahoo.com/news/check-point-software-technologies-reports-090000943.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Electric Car Manufacturers Keep Up With Production Despite Challenges

Posted on November 3, 2022December 18, 2023 by Veronica Carlasuc

Demand for electric vehicles remains resilient. Even with fears of an economic slowdown, car manufacturers are focusing on keeping production unchanged.

Furthermore, Tesla’s board could be pursuing a share buyback in 2023, worth between $5 billion to $10 billion.¹

Rivian Automotive, Inc. is recalling more than 12,000 vehicles to double-check a fastener in the vehicles’ steering assembly that was incorrectly tightened. According to the company, if the fastener isn’t tight, it could impact the alignment of the front wheels and potentially cause vibration and noise, which could affect the steering. In rare cases, the fastener could completely loosen, and could mean loss of steering control and possibly a crash.

The recall by the electric car maker includes all the Rivian R1T pickup trucks and R1S SUVs made through September 2021. About one percent of the company’s EDV vans made for Amazon could also have the similar defect.

Rivian Automotive started production in the fall of 2021 and has built 15,300 vehicles since then. It has set a goal to produce 25,000 vehicles by the end of the year.²

Over the past year or so, automakers have struggled with production and deliveries of vehicles due to semiconductor chip shortages. There’s some light at the end of the tunnel: the chip delivery times decreased by four days in September—signifying that supply shortages could be easing.

The gap between when a chip is ordered and when it is delivered, referred to as lead time, averaged 26.3 weeks, according to research by Susquehanna Financial Group. This was down from 27 weeks in the previous month.³

While chip shortages were just one factor causing issues for electric vehicle makers, another problem manufacturers have encountered in recent months is the rising cost of basic materials needed to build cars and batteries.

In an attempt to ease the strain, the Biden administration is awarding $2.8 billion in grants for projects to expand U.S. manufacturing of batteries for electric vehicles and domestic mineral production.

The grants will help manufacturing and processing companies in at least 12 states when it comes to extracting and processing more lithium, graphite, nickel, and other materials needed to make batteries. According to the Department of Energy, these projects will develop enough lithium to supply two million electric vehicles per year, enough graphite for about 1.2 electric vehicles per year, and enough nickel for approximately 400,000 electric vehicles per year.⁴

UPDATES ON ELECTRIC CAR COMPONENTS AND BATTERIES

Microvast Holding Inc.

Microvast Holdings Inc. recently said that it will build a separator facility with the ability to supply 19 gigawatt-hour (GWh) of electric vehicle batteries, in addition to its already existing two gigawatt-hour battery plant in Clarksville, Tennessee.

Separators are a key item in traditional, advanced, and next-gen Li-ion batteries and are an essential component for the advancement of electric vehicle batteries.⁵

CTS Corp.

CTS Corp. is a manufacturer and seller of sensors, actuators, and connectivity components in North America, Europe, and Asia. Recently, the company reported strong financial performance for the third quarter—revenue increased by 24%.

Regarding the company’s financial performance, the CEO of the company, Kieran O’Sullivan, said that its diversification in the non-transportation end markets is helping the company keep financial performance strong in the current economic environment.

CTS also provided a rosy outlook for 2022 and, thanks to its recent acquisition of Ferroperm, the company expects sales to be between $585 million and $595 million, updated from a forecast of between $570 million and $600 million.⁶

CARS ETF: Investing in Future Cars, Driving Our World Forward

One way to invest in a diverse portfolio of companies involved in developing electric drivetrains, autonomous driving, and network-connected services for automobiles is through Evolve’s CARS ETF. Evolve Automobile Innovation Index Fund (TSX Ticker: CARS) primarily invests in equity securities of companies working on the future of electric vehicles. Shift your investments into gear, with CARS in your portfolio. For more information, visit the fund page here: https://evolveetfs.com/cars/.

CARS ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Microvast Holdings Inc. made the largest contribution to the Fund, followed by Ses Ai Corp and Visteon Corp. The largest detractors to performance for the month were Li Auto Inc., followed by Nio Inc. and Energy Vault Holdings Inc. On last rebalance, these securities were added to the portfolio: CTS Corp. By weight, the Fund’s largest geographic exposure was to the United States, followed by Germany and China.

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter here.

Sources:

Elliott, R., “Tesla Cuts 2022 Vehicle-Delivery Target, but CEO Musk Says Demand Remains Strong,” Wall Street Journal, October 20, 2022; https://www.wsj.com/articles/tesla-tsla-q3-earnings-report-2022-11666139620.
Rosevear, J., “Rivian shares slumped after the company announced a big recall,” CNBC, October 10, 2022; https://www.cnbc.com/2022/10/10/rivian-shares-after-the-company-announced-a-big-recall.html.
Turner, N., “Chip Delivery Times Shrink in Sign That Supply Crunch Is Easing,” BNN Bloomberg, October 17, 2022; https://www.bnnbloomberg.ca/chip-delivery-times-shrink-in-sign-that-supply-crunch-is-easing-1.1833667.
Newburger, E., “Biden awards $2.8 billion for projects to boost electric vehicle battery manufacturing,” CNCB, October 19, 2022; https://www.cnbc.com/2022/10/19/biden-awards-2point8-billion-for-electric-vehicle-battery-manufacturing-.html.
Khederian, H., “Why Microvast Shares Are Exploding Higher Today,” Benzinga, October 19, 2022; https://www.benzinga.com/markets/penny-stocks/22/10/29330497/why-microvast-shares-are-exploding-higher-today.
“CTS Announces Third Quarter 2022 Results,” CTS Corp., October 26, 2022; https://investors.ctscorp.com/news-events/news/news-details/2022/CTS-Announces-Third-Quarter-2022-Results/default.aspx.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Azure and AWS Expand Cloud While Markets Contract

Posted on November 1, 2022December 18, 2023 by Veronica Carlasuc

The cloud computing market continues to gain traction as more businesses and organizations are opting for cloud services and cloud solutions.

On October 20, global bank UBS and Microsoft Corporation announced an expansion of their partnership to accelerate UBS’s public cloud footprint over the next five years. With this expansion, UBS plans to have over 50% of its applications and critical workloads running on Microsoft Azure, solidifying Microsoft as the bank’s primary cloud services provider.

In 2018, UBS outlined its cloud strategy and partnered with Microsoft with plans to bring one-third of its application to public cloud within four years. This target was achieved in February 2021.¹

Recently, Microsoft reported that its Azure cloud business had increased by 35% in the quarter ending in September. Adjusted for currency, the cloud business grew 42%.

Oracle Corp.

Oracle Corp. is a leading cloud services provider. Recently, the company announced that it has been getting a lot of traction and is seeing growth rates the company hasn’t witnessed in over a decade.

The company grew eight percent organically in the quarter ending in August and it expected to grow double digits organically in the near future.

Regarding the fear of economic slowdown, the company is being vigilant and careful about expenses. However, if there was a slowdown, the company would likely see it.³

Nutanix Inc.

Nutanix was recently named as a Visionary at the Gartner October 2022 Magic Quadrant for Distributed File Systems and Objects Storage. This was the second consecutive year that Nutanix has been recognized with this title.

At its core, Nutanix believes that new applications provide a competitive advantage to customers who don’t have time to plan, manage, and secure separate block, file, and object platforms. The recognition by Gartner suggest that the company’s products are consistent, challenge storage norms, and help high-capacity storage users.⁴

Investing in the Cloud with Evolve ETFs

Cloud Computing is transforming the global economy. Over the past decade, the cloud has fundamentally changed the way businesses and individuals access data. From physical servers to portable drives, the cloud has helped eliminate the need to store information on-premise. If you’re interested in investing in cloud, consider a cloud computing ETF.

Evolve Cloud Computing Index Fund (DATA ETF), Canada’s first cloud computing ETF, invests primarily in equity securities of companies located domestically or internationally that have business operations in the field of cloud computing. To learn more about DATA ETF, visit the fund page here: https://evolveetfs.com/data/

DATA ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Oracle Corp. made the largest contribution to the Fund, followed by SAP SE and Salesforce Inc. The largest detractors to performance for the month were Datadog Inc., followed by Snowflake Inc. and Amazon.Com Inc. On last rebalance, these securities were added to the portfolio: Dropbox Inc., Fortinet Inc, and Nutanix Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Germany and Israel.

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter here.

Sources:

“UBS and Microsoft announce landmark expansion of cloud partnership,” Microsoft Corporation, October 20, 2022; https://news.microsoft.com/2022/10/20/ubs-and-microsoft-announce-landmark-expansion-of-cloud-partnership/.
Savitz, E.J., “Cloud Stocks Fall After Earnings Results From Amazon, Microsoft,” Barron’s, October 28, 2022; https://www.barrons.com/articles/snowflake-stock-price-amazon-microsoft-51666985106?noredirect=y.
Savitz, E.J., “Oracle’s Stock Looks Cheap Again. ‘We’ve Got a Plan,’ CEO Says,” Barron’s, October 17, 2022; https://www.barrons.com/articles/oracle-stock-price-buy-safra-catz-51665779058?noredirect=y.
“Nutanix is Named a Visionary in the 2022 Gartner® Magic Quadrant™ for Distributed File Systems and Objects Storage for the Second Year,” Yahoo! Finance, October 28, 2022; https://finance.yahoo.com/news/nutanix-named-visionary-2022-gartner-150000659.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Six of the Scariest Days on Wall Street Over the Past 1,000 Days

Posted on October 28, 2022October 28, 2022 by Veronica Carlasuc

Wall Street was having the time of its life heading into 2020, with the S&P 500 advancing roughly 29% in 2019— almost triple the historical average return of the stock market.

That momentum carried into 2020 with the Dow Jones Industrial Average hitting a record close of 29,551 on February 12. A week later, on February 19, the S&P 500 hit a record closing high of 3,386. That same day, the tech-heavy Nasdaq closed at a record 9,817.

And the outlook for the remainder of 2020 remained bullish.

Suffice to say, in early February 2020 no one saw what was just over the horizon. Over the last 1,000 days, investors have experienced unprecedented gains and losses, resulting in one of the most volatile periods in history.

The single-day losses have far outpaced any single-day gains, which has added to growing investor pessimism and anxiety. And by all accounts, it looks like there will be more pain over the coming months.

In honour of Halloween, here are six of the scariest days that have occurred on Wall Street over the last 1,000 days.

March 12, 2020

S&P 500 -9.51%
Dow Jones Industrial Average -9.99%
Nasdaq -9.43%

March 12th was a historic day for Wall Street, but one many investors would rather forget. Stocks plunged as fears about COVID-19 accelerated. The S&P 500 closed the day down 9.51%, its worst day since October 19, 1987 (Black Monday), when it lost 20.47%.

The Dow Jones closed the day down 9.99%, for its worst percentage decline since Black Monday, when it lost 22.61%. Not to be outdone, the Nasdaq declined 9.43%, for its worst day since April 2000, just before the dot-com bubble burst.

March 12th was also the day the longest bull-market on record came to an end, with the S&P 500 falling into bear market territory. The index hit a pandemic low on March 23, a full 35% below its high in February 19, 2020.

To combat the pandemic and prevent an economic collapse the Federal Reserve sent its key lending rate to record lows. This helped juice the stock market. By August, the shortest bear market in history was over and the S&P 500 was back in record territory. But, as we have seen, it hasn’t been smooth sailing.

March 16, 2020

S&P 500 -12%
Dow Jones Industrials -12.9%
Nasdaq -12.3%

March 16th was when the pandemic became very real for Wall Street, with investors realizing COVID-19 was going to upend the economy. The S&P 500 fell seven percent shortly after opening, which triggered circuit breakers and halted trading for 15 minutes. It was the third circuit breaker halt that month after March 9th and 12th.

By the end of the day, the S&P had plunged 12%, its third biggest percentage loss; the Dow Industrials fell 12.9%, the second biggest percentage loss since WWII, and the Nasdaq experienced its largest single-day percentage loss of 12.3%.

November 26, 2021

Dow Jones Industrial Average -2.53%
S&P 500 -2.27%
Nasdaq -2.23%

On November 26th, U.S. stocks slid as word of a new variant of COVID-19 was found in South Africa, sparking concerns that a new outbreak could underscore the then fragile economic recovery.

The one-day sell-off represented the worst post-Thanksgiving performance for the S&P 500 since 1941, the same year President Roosevelt signed a bill establishing the fourth Thursday in November as a national holiday.

May 18, 2022

S&P 500 -4.04%
Dow Jones Industrial Average -3.6%
Nasdaq -4.7%

The S&P 500 inched closer to bear market territory on May 18th after tumbling 4.04%. This put the index down 18.5% from its January highs. The sharp sell-off came on fears that the Federal Reserve’s aggressive rate hikes to tame runaway inflation would send the U.S. into a recession.

The day before, Federal Reserve Chair Jerome Powell said “there won’t be any hesitation” to bring down inflation.

And there was some evidence to support these fears. On May 18th, both Target Corporation (NYSE:TGT) and Walmart Inc (NYSE:WMT), bellwethers of consumer spending, missed on their quarterly earnings estimates and provided weak guidance.

June 13, 2022

S&P 500 -3.88%
Dow Jones Industrial Average -2.7%
Nasdaq -3.5%

June 13th was the fifth consecutive trading day in which the S&P 500 had fallen lower, with the index slipping deeper into bear market territory. A bear market is defined as a loss of 20% or more from its most recent record highs.

The decline in equities came after the Department of Labor reported that the May CPI rose 8.6% on an annual basis, the fastest clip since December 1981. Inflation was also up 1.0% on a monthly basis, higher than analyst estimates of 0.7%.

The worse-than-expected inflation data signaled more aggressive rate hikes from the Federal Reserve, a move that could tip the country into a recession.

September 13, 2022

S&P 500 -4.3%
Dow Jones -3.9%
Nasdaq -5.2%

The broader stock market took a big hit on September 13th after a key inflation report came out hotter than expected. During the month of August, the consumer price index (CPI), otherwise defined as inflation, increased 0.1% for the month and 8.3% on an annual basis.

This was lower than July’s 8.5% reading but higher than the 8.1% forecast. On a month-over-month basis, economists were expecting inflation to decline 0.1%.

The stronger than expected data hurt investor optimism and dashed hopes that cooling prices would result in a less hawkish Federal Reserve and future rate hikes. Just five stocks on the entire S&P 500 finished the day in positive territory.

The big one-day drop came after four straight positive sessions, with investors seemingly believing inflation had peaked. The August data showed otherwise.

Ongoing Volatility Could Lead To Big Daily Losses in 2023

In 2022, the broader markets slid back into bear market territory and while investors may experience periods of optimism, chances are good the stock market hasn’t bottomed.

If inflation isn’t under control and interest rates aren’t going down, the stock market has no reason to rebound. This could be an indication that scarier days are upon us.

Updated COVID-19 Vaccine Gives Moderna & Pfizer A Boost

Posted on October 26, 2022November 4, 2022 by Veronica Carlasuc

U.S. President Joe Biden may have said in a recent “60 Minutes” interview that the pandemic is over, but the fact is, just under 400 Americans are still dying of COVID-19 each day. That number is far below the number of daily fatalities recorded during the January 2021 peak, where 3,400 Americans died of COVID-19.¹

Still, the seven-day average daily deaths of around 375 per day is well above the 200 deaths per day that occurred in the spring. The stubbornly higher death rate, coupled with the potential threat of a resurgence of COVID-19, has fuelled the call for Americans to get vaccinated (or boosted) as we head into the autumn and winter months.

To that end, the U.S. Food and Drug Administration (FDA) authorized COVID-19 booster shots that target the omicron BA.5 variant. This is the first time the FDA has authorized an updated vaccine formula since the shots started in December 2020.

The U.S. has so far secured 171 million doses of Moderna’s and Pfizer’s updated shots. Moderna’s updated vaccine is authorized for adults ages 18 and older while Pfizer’s new booster is authorized for people ages 12 and older.

Eli Lilly & Co. Fast Tracking New Drug

Eli Lilly & Co. announced it was granted Fast Track designation for tirzepatide, a drug designed to treat adults with obesity or overweight with weight-related comorbidities. The FDA grants Fast Track designation in order to expediate the review of drugs to treat serious conditions and fill an unmet medical need. The goal is to get new drugs to patients as quickly as possible.²

The company expects to initiate a rolling submission of a new drug application (NDA) for tirzepatide this year. The rolling submission, which is expected to complete by the end of April 2023, allows Eli Lilly to submit completed sections of an application for review by the FDA, rather than wait until all sections are completed.

Zoetis Inc Acquiring Health Companies

Zoetis Inc has recently announced a number of strategic acquisitions. In late September, it completed the acquisition of Jurox, a privately held animal health company that develops, manufactures and markets veterinary medicine for treating livestock and companion animals.³

In early September, Zoetis acquired NewMetrica, a Scotland-based company that has developed digital instruments that are designed to measure the health-related quality of life in non-verbal species as a strategic addition to their companion animal portfolio.⁴

For example, the company’s VetMetrica measures how an animal “feels” about its circumstances from its individual perspective.

The benefits of NewMetrica’s digital instruments have been validated through scientific publications and the U.S. FDA.

Investing in Global Healthcare with LIFE ETF

One way to simplify investing in the cutting-edge healthcare industry is through an ETF. A healthcare ETF offers a diversified portfolio of holdings in healthcare stocks. ETFs ensure that your risk is diversified, but that you are still invested in blue-chip names that you trust.

Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip companies in the healthcare industry, with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. LIFE ETF is available in hedged, unhedged and USD classes, as well as mutual fund versions.

For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

LIFE ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Eli Lilly & Co. made the largest contribution to the Fund, followed by Bristol-Myers Squibb Co, and Merck & Co. Inc. The largest detractors to performance for the month were Medtronic PLC, followed by CSL LTD, and AstraZeneca PLC. By weight, the Fund’s largest geographic exposure was to the United States, followed by Switzerland and Germany.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

Kimball, S., “FDA authorizes Covid booster shots that target omicron BA.5 variant,” CNBC, August 31, 2022; https://www.cnbc.com/2022/08/31/fda-authorizes-covid-booster-shots-that-target-omicron-bapoint5-variant-.html.
“Lilly receives U.S. FDA Fast Track designation for tirzepatide for the treatment of adults with obesity, or overweight with weight-related comorbidities,” Eli Lilly and Company, October 6, 2022; https://investor.lilly.com/news-releases/news-release-details/lilly-receives-us-fda-fast-track-designation-tirzepatide.
“Zoetis Announces the Completion of its Acquisition of Jurox, a Leading Provider of Livestock and Companion Animal Products,” Zoetis Inc., September 30, 2022; https://news.zoetis.com/press-releases/press-release-details/2022/Zoetis-Announces-the-Completion-of-its-Acquisition-of-Jurox-a-Leading-Provider-of-Livestock-and-Companion-Animal-Products/default.aspx.
“Zoetis Acquires Newmetrica, Adding Health-related Quality of Life Instruments to Companion Animal Portfolio,” Zoetis Inc., September 6, 2022; https://news.zoetis.com/press-releases/press-release-details/2022/Zoetis-acquires-NewMetrica–adding-health-related-quality-of-life-instruments-to-companion-animal-portfolio/default.aspx.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Why Choose Cash Over Short-Term Bonds?

Posted on October 24, 2022December 18, 2023 by Veronica Carlasuc

We’ve just entered the fourth quarter of 2022 and already it’s shaping up to be the worst year for stocks since 1969 and the worst year for bonds ever. The S&P 500 is in a bear market, down 23% year-to-date while the Bloomberg U.S. Aggregate Bond Index, which is the most widely used benchmark for the investment-grade U.S. bond market, has tumbled nearly 16%.

If both indexes close out 2022 in the red, it will be the first time that has happened since 1969. That’s not how a balanced portfolio made up of stocks and bonds is supposed to work. In a so-called normal year, bonds and stocks have an inverse relationship. Typically when stocks tumble, bonds act as a stabilizer.

That’s not happening in 2022. Which means investors don’t have a lot of places to park their money.

What’s Happening to the Bond Market?

Historically, for both stocks and bonds to crater in the same year something major needs to be going on. For example, in 1941 the broader markets took a hit when the U.S. entered World War II.

Soaring inflation in the mid-1960s forced the U.S. Federal Reserve to aggressively hike its interest rates in an effort to cool the economy. It worked. In 1969 as the economy tipped into a recession, and stocks and bonds ended the year in negative territory.

There’s an eerie similarity between what happened in 1969 and what’s going on in 2022. During the 2020 pandemic, the Federal Reserve, and other central banks around the world, artificially lowered their interest rates to near zero. Lower interest rates make it cheaper to borrow, which in theory, prevented the U.S. economy from crashing.

While artificially low interest rates make it cheap to borrow money, they also gut investing and retirement portfolios. Especially those that rely on fixed income investments like bonds and treasuries.

In effect, the Federal Reserve and other central banks effectively removed income from income investing. With inflation soaring, central banks need to play catch up, which has resulted in unprecedented rate hikes. And that’s been bad news for short-term bonds.

Why does that matter?

Bonds and other fixed income securities are supposed to be a safer investment for those seeking to limit the risks associated with the stock market. With a global recession expected in 2023, investors have been seeking shelter from stock market volatility. But with bond yields rising and prices falling, investors are feeling the punch.

How Do Bonds Work?

The idea of investing in bonds seems, on the surface, pretty straight forward. But the fact is, bonds and bond pricing can be very confusing.

First, it’s important to understand that bond prices and yields have an inverse relationship.. The yield is tied to the bond price; when bond prices rise, the yield falls and when bond prices fall, the yield rises.

A typical bond has a face (or par) value of $1,000, a coupon rate, and a maturity date. The coupon rate is just the fixed annual rate (interest rate) that a guaranteed-income investment, like a bond, pays the owner of the bond.

If you buy one $1,000 bond with a two-percent coupon rate that matures in 10-years, you will receive two percent interest on the $1,000 bond twice a year, for 10-years. After the 10-years, you sell the bond back for $1,000 and keep the interest you’ve accumulated during that time.

It’s the buying and selling of bonds on the secondary market that gets confusing.

Here, the par value of the bond can change due to supply and demand dynamics. This is especially true in an environment where interest rates are rising or plunging.

If you owned a 10-year bond with an interest rate of two percent and the Federal Reserve raises its rates, bond yields have to rise to keep pace. If new 10-year bonds have an interest rate of four percent, you’ll want the bond that pays the higher coupon rate.

To get the bond with four percent you’ll need to sell the two percent bond for less than its par value. If you hold onto that four percent bond until it matures, you’ll earn four percent plus the difference between the $1,000 face value and the purchase price. The combined amount should come out to around four percent, which is the new bond rate.

This scenario holds true if bond yields go lower. In the above scenario, the holder of the four percent bond could sell it for above the face value.

Should I Invest in Short-Term Bonds?

Bonds are having a bad year, but they should still hold a place in your portfolio, especially if you have a longer investing timeline. The type of bond to consider is what might change. With interest rates on the rise, bond prices fall, which negatively impacts investors’ returns.

When there is ongoing uncertainty, investors turn their attention to long-term bonds because they get a specific return over a longer period of time. This results in an inverted yield curve, which is where yields are higher for short-term bonds than longer-term bonds.

Because of uncertainty and volatility, investors also tend to avoid the stock market and instead pay attention to bonds, where they are guaranteed a specific return with little downside risk to the principal.

What Are Some Alternatives to Short-Term Bonds?

If you are a short-term investor or are seeking a reliable income stream, there are alternatives. In fact, soaring interest rates and falling bond prices has created a great opportunity for investors to rebalance their portfolio with better fixed-income strategies.

This could include:

Moving to a more aggressive portfolio mix of stocks and bonds; instead of 60-40, move to 70-30
Short-term bond funds, in particular, those that hold corporate bonds instead of those that use government debt
A cash alternative exchange-traded fund (ETF), also known as high interest savings funds, do not hold bonds, instead, the assets are placed in bank savings accounts with higher rates of returns than what retail customers receive

The Bank of Canada and U.S. Federal Reserve have both said additional rate hikes are coming and are expected to remain elevated well into 2023. Central banks will only reduce their interest rates when inflation starts to fall. Investors looking for above-average gains and below market volatility may consider cash alternatives to short-term bonds.

Looking for Cash Alternative Investments?

Cash has always been an important component of a well-diversified portfolio. The cash portion of a portfolio helps preserve capital during market downturns and may act as a temporary hold until new investment opportunities become available. Evolve’s cash solutions can help preserve capital and liquidity by investing in high-interest deposit accounts with some of Canada’s big six banks. Maximize monthly income with high-interest savings ETFs.

High Interest Savings Account Fund (HISA ETF) offers daily liquidity and an attractive 4.24% yield* in Canadian dollars. To learn more about investing in HISA ETF, click here: https://evolveetfs.com/hisa/

US High Interest Savings Account Fund (HISU ETF) offers daily liquidity and an attractive 4.20% yield* in U.S. dollars. To learn more about investing in HISU ETF, click here: https://evolveetfs.com/hisu/

For more blogs like this, insights on investing and investment products, sign up for our weekly newsletter here.

*Yields are gross of MER, effective November 3, 2022. Rates may be changed at any time. Source: Bloomberg. See prospectus for further details.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Demand for Electric Vehicles Remain Robust

Posted on October 20, 2022December 18, 2023 by Veronica Carlasuc

Electric vehicles remain in high demand, which is evident by the recent delivery and production figures carmakers have been reporting.

Tesla Inc., the world’s leading manufacturer of electric vehicles (EVs), said that it delivered 343,000 EVs in the third quarter of 2022. Total EV production amounted to 365,000 units. The company also said that it produced 19,935 Model S and Model X vehicles and 345,988 of its Model 3 and Model Y vehicles.¹

Furthermore, Tesla is planning to double its EV sales in Germany and sell 80,000 units for 2022. In 2021, the company sold just 39,714 in Germany. It’s worth noting that Tesla recently built its first European Gigafactory in Gruenheide, a city near Berlin, which opened in March 2022.²

In China, one of the largest markets for EVs, automakers have suffered due to the declining Chinese economy, issues around supply chain, and lockdowns due to COVID-19 outbreaks in major cities. However, EV sales remain robust and carmakers in the country remain resilient.

Li Auto Inc delivered 4,571 vehicles in August. Meanwhile, Xpeng Inc., also held by the fund, delivered 9,578 vehicles in August. Year-over-year, deliveries were up 33% for Xpeng Inc.

BYD Co Ltd., a Chinese manufacturer of automotive products, announced that it will be setting up an electric vehicle production facility in Thailand and aims to produce 150,000 passenger cars per year starting in 2024. The facility will be located in the eastern province of Rayong, and this project will be worth $491.49 million.³

Rivian Automotive’s Electric Trucks & Vans

Rivian Automotive, Inc. is a California-based manufacturer of electric vehicles. Recently, it was certified and registered by Transport Canada to sell its trucks and SUVs in Canada. The Canadian regulators certified and listed Rivian’s R1T (Truck OEM) and R1S (MPV) on the Preclearance List of Recognized Vehicle Importers.

There’s a market for electric trucks in Canada. Since Ford’s F-150 Lightning and Hummer EVs are already on the road, Rivian Automotive’s electric trucks could cater to that market and provide buyers with more choices.⁴

Mercedes-Benz Vans and Rivian also recently announced that they will begin a new joint venture for electric van production. The two automakers will be constructing an electric-only factory that will focus on building vans that are for Rivian and Mercedes-Benz.

Rivian is also working with Amazon to build a 100,000-unit fleet of Electric Delivery Vans (EDV) by 2030.⁵

EVgo & GM’s Charging Stations

EVgo, Inc., a fast-charging network provider in the U.S., announced its financial performance for the most recent quarter. The company added 67,000 new customer accounts during the second quarter of 2022, bringing their total customer accounts to 444,000. Customer accounts increased 60% year-over-year.

In July 2022, EVgo announced an agreement with GM and the Pilot Company that will result in 2,000 new stalls at up to 500 sites across the U.S. over the next few years. EVgo will be responsible for procuring, designing, installing, operating, and maintaining the charging stations.

EVgo also launched the Autocharge+ functionality during the second quarter, which essentially simplifies and accelerates the charging experience for customers.⁶

Investing in Electric Cars with CARS ETF

The auto industry is poised to undergo the biggest transformation in a lifetime. With the automobile industry racing towards autonomous driving and electrification, there is a growing demand and opportunity to invest in this industry.

The Evolve Automobile Innovation Index Fund (TSX Ticker: CARS), CARS ETF, is Canada’s first automobile innovation ETF. CARS ETF takes a diversified approach to invest in the supply chains behind autonomous, connected, electric, and shared vehicles. The fund has a portfolio of companies involved in the development of electric cars, self-driving cars, and automobile innovation. These include some of the world’s leading manufacturers and automobile companies. CARS ETF is a great way to gain access to the future of the automobile and shift your investments into gear.

For more information on the Evolve Automobile Innovation Index Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact info@evolveetfs.com.

CARS ETF Portfolio Strategy and Activity

For the month, SES AI Corp. made the largest contribution to the Fund, followed by Vitesco Technologies Group, and Rivian Automotive Inc. The largest detractors to performance for the month were Ceres Power Holdings Plc, followed by ITM Power Plc. and Canoo Inc. By weight, the Fund’s largest geographic exposure was to United States, followed by Germany and China.

For more blogs like this, insight on investing and investment products, sign up for our weekly newsletter here.

Sources:

Kolodny, L., “Tesla delivered 343,000 vehicles in the third quarter of 2022,” CNBC, October 2, 2022; https://www.cnbc.com/2022/10/02/tesla-tsla-q3-2022-vehicle-delivery-and-production-numbers.html.
“Tesla aims to double vehicle sales in Germany in 2022, Automobilwoche reports,” Reuters, September 18, 2022; https://www.reuters.com/business/autos-transportation/tesla-aims-double-vehicle-sales-germany-2022-automobilwoche-2022-09-18/.
Setboonsarng, C., “China’s BYD to start EV production in Thailand by 2024,” Reuters, September 8, 2022; https://www.reuters.com/business/autos-transportation/chinas-byd-set-up-ev-plant-thailand-2022-09-08/.
Kana, J., “Rivian gets approval to market EV trucks in Canada,” Driving.ca, September 30, 2022; https://driving.ca/auto-news/news/rivian-gets-approval-to-market-ev-trucks-in-canada.
Miller, C., “Rivian and Mercedes Agree to Launch Joint Venture for Electric Vans,” Car and Driver, September 9, 2022; https://www.caranddriver.com/news/a41136076/rivian-and-mercedes-joint-venture-electric-vans/.
Yahoo! Finance, August 9, 2022; https://finance.yahoo.com/news/evgo-inc-reports-second-quarter-110000812.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cybersecurity, A Growing Priority for Businesses

Posted on October 17, 2022December 18, 2023 by Veronica Carlasuc

A recession could be looming. As economic uncertainty prevails, businesses generally cut back on spending. However, the demand for cybersecurity products and services remains strong despite economic concerns beginning to negatively impact other parts of the tech sector. This has led to the belief that the cybersecurity industry may be recession resilient.

For example, in late August, Cisco Systems Inc., a networking and communications giant, revealed that its security business accelerated faster than any other segment and increased $100 million above what analysts were expecting. The company’s CEO, Chuck Robbins, announced that it will be staffing up its security segment and raising its prices to keep up with rising costs.¹

Cybersecurity spending is on the rise as more businesses are prioritizing cybersecurity. Cybersecurity incidents can shut down businesses for an exorbitant amount of time, create immense financial disruptions, and impact customer loyalty.

According to a survey conducted by Travelers Co., 59% of businesses are worried about cyberthreats and 57% of businesses are concerned about economic uncertainty. One of the main reasons why cybersecurity is a top concern for businesses is because more small businesses are becoming targets of cyber criminals. A recent report by Hiscox states that companies with an annual revenue between $100,000 to $500,000 are just as likely to be targeted as companies with an annual revenue between $1.0 million and $9.0 million.

Ransomware attacks are also increasing. The report states that 19% of the responding businesses reported ransomware attacks—up from 16% a year ago. Of those businesses targeted by ransomware attacks, two-thirds of them paid the attackers.²

Zscaler’s Positive Outlook

Zscaler, Inc. continues to see solid demand for its flagship Zero Trust Exchange platform. The CEO of the company, Jay Chaudhry, said in an earnings release that demand remains decent despite macroeconomic headwinds.

While Zscaler provides a rosy outlook, analysts are giving rave reviews to the company. According to Andrew Nowinski, an analyst at Wells Fargo, the recent financial results stood out among other cybersecurity firms and had the strongest guidance. It’s believed that Zscaler is purpose-built for exactly the type of economic environment currently in place. It can simplify cybersecurity infrastructure for its clients and, at the same time, lower costs.³

IronNet’s New Cybersecurity Solution

IronNet, Inc., a solutions provider for cyberattacks, recently launched a new solution named IronRadar. This solution is designed to automatically update customers’ cybersecurity tools with malicious indicators for adversary infrastructure. It had a 98% accuracy during the six months of testing.

IronRadar fingerprints a server using an innovative process and establishes if it’s a command and control (C2) server while the servers are being stood up. This could take place even before the cyberattack is initiated. At its core, IronRadar enhances data and updates proactively to block adversarial infrastructure.⁴

Investing in the Cybersecurity Industry with CYBR ETF

CYBR ETF Portfolio Strategy and Activity

For the month, Zscaler Inc. made the largest contribution to the Fund, followed by Fortinet Inc., and Cyberark Software Ltd. The largest detractors to performance for the month were Gds Holdings Ltd., followed by Darktrace Plc and Okta Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Israel and Canada.

For the latest information on cybersecurity investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

Novet, J., “Why cybersecurity stocks are beating the market,” CNBC, September 1, 2022; https://www.cnbc.com/2022/09/01/cybersecurity-stocks-are-beating-the-market-in-a-volatile-economy.html.
Gosselin, K., “Cyberattacks a top concern across all business sizes, economic uncertainty a close second, new survey shows,” TechXplore, September 27, 2022; https://techxplore.com/news/2022-09-cyberattacks-business-sizes-economic-uncertainty.html.
Krause, R., “Zscaler Results Top Wall Street Estimates, Thanks To Cloud Growth,” Investor’s Business Daily, September 9, 2022; https://www.investors.com/news/technology/zscaler-stock-zscaler-earnings-zs-stock-q22022.
“IronNet Launches IronRadar to Automatically Block Adversary Infrastructure,” IronNet Inc., September 29, 2022; https://ir.ironnet.com/news-events/press-releases/detail/69/ironnet-launches-ironradar-to-automatically-block-adversary.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Looming recession a tailwind for gaming as consumers look for ‘cheap’ entertainment

Posted on October 17, 2022February 16, 2024 by Evolve ETFs

The Sun Peaks Between the Clouds in Stormy Markets

Posted on October 15, 2022December 18, 2023 by Veronica Carlasuc

The cloud computing market continues to grow with cloud services and solutions providers announcing large investments and expansion.

Alibaba Group Holdings, Inc., a Chinese e-commerce giant with a cloud computing presence, announced an investment of $1.0 billion over the next three years to support customers using its cloud services and solutions. According to Gartner, a technology research and consulting firm, Alibaba is the third-largest cloud computing provider behind Microsoft Corporation and Amazon.com Inc’s Amazon Web Services (AWS).

The investment will primarily consist of financial and non-financial incentives to help its customers localize their cloud computing needs. Alibaba’s management sees cloud computing as an important component of the business, and it could provide future growth and profitability.

Recently, due to a slowdown in the Chinese economy, Alibaba’s cloud computing business has slowed down. However, the company is trying to increase its presence outside of China. Over the past few years, the company has opened data centers in Singapore and Thailand.¹

Alphabet Inc’s Google announced that it will set up its first cloud region—which is a cluster of data centers—in Greece. This will contribute $2.13 billion to Greece’s economy and create 20,000 jobs by 2030. Greece’s cloud region will provide storage and cloud computing services for Google customers. It will let organizations better use their data, enhance security, and improve low latency.

Google announced its cloud region in Greece just two years after Microsoft announced its plans to set up data centers in the country. Meanwhile, Amazon’s cloud computing business unit opened its first office in Greece last year.²

Paylocity Holding Corporation

Paylocity Holding Corporation, a provider of cloud-based payroll and human capital management software solutions for medium-sized organizations in the U.S., announced its revenue for the fiscal year 2022 ended on June 30 surged 34% year-over-year.

Regarding business conditions, the Co-CEO of the company, Steve Beauchamp, said that the company’s software solutions continue to resonate with customers and there’s been a significant increase in product utilization.³

Concentrix Corporation

Concentrix Corporation, focused on providing customer experience solutions and technology, was awarded a Leader position for Customer Experience Management (CXM).

This position was awarded to Concentrix for the seventh year in a row by Everest Group—a global research firm focused on strategic IT, engineering services, business services, and sourcing.⁴

Concentrix also recently announced its financial results for its third quarter of fiscal 2022 ended on August 31. Chris Caldwell, the president and the CEO of the company, said that Concentrix is seeing strong revenue growth and profit. In addition to this, he said that the company has seen strong new business signings in recent quarters and closed two large deals that will continue to provide an edge to the company over the long term.⁵

Investing in Cloud Computing with DATA ETF

DATA ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Zscaler Inc. made the largest contribution to the Fund, followed by Citrix Systems Inc., and Paylocity Holding Corp. The largest detractors to performance for the month were Servicenow Inc., followed by Amazon.Com Inc., and Oracle Corp. On last rebalance, these securities were added to the portfolio: Concentrix Corp. and DocuSign Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Germany and Israel.

Stay updated with the latest information on cloud computing and related industries by signing up for our weekly newsletter.

Sources:

Kharpal, A., “Alibaba pledges $1 billion to cloud computing customers to reignite growth,” CNBC, September 22, 2022; https://www.cnbc.com/2022/09/23/alibaba-pledges-1-billion-to-cloud-computing-customers-to-reignite-growth.html.
Google to build its first cloud region in Greece,” Financial Post, September 29, 2022; https://financialpost.com/pmn/business-pmn/google-to-build-its-first-cloud-region-in-greece,
“Paylocity Announces Fourth Quarter and Full Fiscal Year 2022 Financial Results,” Paylocity Holdings Corporation, August 4, 2022; https://investors.paylocity.com/news-releases/news-release-details/paylocity-announces-fourth-quarter-and-full-fiscal-year-2022.
“Concentrix Earns Another Leader Recognition in Highly Competitive Customer Experience Management Market,” Concentrix Corporation, September 8, 2022; https://concentrix.gcs-web.com/news-releases/news-release-details/concentrix-earns-another-leader-recognition-highly-competitive.
“Concentrix Reports Third Quarter 2022 Results,” Concentrix Corporation, September 28, 2022; https://concentrix.gcs-web.com/news-releases/news-release-details/concentrix-reports-third-quarter-2022-results.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Innovation Persists in These Industries Despite Looming Recession

Posted on October 13, 2022December 18, 2023 by Veronica Carlasuc

Automobile Innovation: Dealing with Demand for Electric Vehicles

Electric vehicles remain in high demand, which is evident by the recent delivery and production figures carmakers have been reporting.

Cybersecurity: Showing Recession Resilience

Cloud Computing: Expanding to Greece

E-Gaming: Releasing New Video Games

Recently at the Tokyo Game Show, Sony Group Corp. and Nintendo Co Ltd. (held by the fund) said that 2023 will be one of the biggest years for game releases. As games have been delayed, it has impacted sales at gaming companies. But gamers can expect several new releases from some of the biggest video game publishers.

Nintendo is planning to release Zelda: Tears of the Kingdom, Fire Emblem: Engage, and Pikmin 4. Sony’s video game lineup for 2023 includes Hogwarts Legacy, Marvel’s Spider-Man 2, Final Fantasy XVI, Stellar Blade, and Synduality. Sony’s new virtual reality system, dubbed PSVR2, is also expected to be released in early 2023 and reports indicate that there are more than 20 games for that system.

Other new video game releases include Diablo IV from Activision Blizzard Inc., Street Fighter VI from Capcom Co. Ltd., and Forspoken from Square Enix Holdings Co Ltd.⁵

5G: Connecting with Robotics

T-Mobile Inc. recently announced that it is working with InDro Robotics, a Canadian air and ground robotics research and development firm, using T-Mobil’s 5G to remotely connect InDro Robotics’ ground-based industrial inspection robots, testing security, and inspection capabilities at electrical substations.

InDro Robotics’ Sentinel was selected by the Electric Power Research Institute (EPRI) for its ability to provide 24-hour substation asset inspection and security monitoring. The ground-roving robot performed well. While using the 5G routed connected to T-Mobile’s networking, it was able to do surveillance and relay data back to the maintenance team that operated the robot remotely in real time.⁶

Robotics Automation: Unveiling Tesla’s Optimus

On Friday, September 30, Tesla Inc. unveiled Optimus, a prototype humanoid robot, as the automaker bets on artificial intelligence, automation, and how it could impact physical work.

At the unveiling, the robot running on Tesla’s full self-driving computer, walked on the stage and displayed a wide range of motion such as waving and pumping its arms in the air. Although the robot had visible wiring and moved slowly, CEO of Tesla, Elon Musk, said that he would like the robot to be manufactured at scale, the price to be less than $20,000, and the robot to have core physical capabilities such as moving fingers independently and opposable thumbs to operate tools.⁷

Fintech: Simplifying Accounting with Quickbooks

Intuit Inc, a provider of financial management and compliance products and services for accounting professionals and small business, and held by the fund, launched QuickBooks Online Advanced in the U.K. This is an innovative cloud-based offering for accounting professionals and small businesses.

This solution was designed for when operations and bookkeeping becomes more complex at organizations. It includes features like customized reports, data controls, and data restoration.

Nick Williams, U.K. Product Director at Intuit QuickBooks, said that small businesses had a very tough time during the pandemic, and with the cost of living increasing, it only adds pressure on them. With QuickBooks Online Advanced accountants can improve their processes and streamline their finances.⁸

Genomics: Fast Tracking Tirzepatide

Eli Lilly & Co. announced it was granted Fast Track designation for Tirzepatide, a drug designed to treat adults with obesity or overweight with weight-related comorbidities. The FDA grants Fast Track designation in order to expediate the review of drugs to treat serious conditions and fill an unmet medical need. The goal is to get new drugs to patients as quickly as possible.

The company expects to initiate a rolling submission of a new drug application (NDA) for Tirzepatide this year. The rolling submission, which is expected to complete by the end of April 2023, allows Eli Lilly to submit completed sections of an application for review by the FDA, rather than wait until all sections are completed.⁹

EDGE ETF: Diversified Investing in Innovation

Disruptive innovation gives your portfolio an edge by ensuring you keep up with trends and developments in a quickly changing world, giving you exposure to high-growth industries.

Portfolio Strategy and Activity

For the month, Bristol-Myers Squibb Co. made the largest contribution to the Fund, followed by KDDI Corp, and Argenx SE. On last rebalance, these securities were added to the portfolio: FANUC Corp, Argenx SE, Waters Corp, and Block Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Japan and Canada.

Stay updated with latest information on investing in innovation and industry updates on related investment products, sign up for our weekly newsletter.

Sources:

Kolodny, L., “Tesla delivered 343,000 vehicles in the third quarter of 2022,” CNBC, October 2, 2022; https://www.cnbc.com/2022/10/02/tesla-tsla-q3-2022-vehicle-delivery-and-production-numbers.html.
“Tesla aims to double vehicle sales in Germany in 2022, Automobilwoche reports,” Reuters, September 18, 2022; https://www.reuters.com/business/autos-transportation/tesla-aims-double-vehicle-sales-germany-2022-automobilwoche-2022-09-18/.
Novet, J., “Why cybersecurity stocks are beating the market,” CNBC, September 1, 2022; https://www.cnbc.com/2022/09/01/cybersecurity-stocks-are-beating-the-market-in-a-volatile-economy.html.
Google to build its first cloud region in Greece,” Financial Post, September 29, 2022; https://financialpost.com/pmn/business-pmn/google-to-build-its-first-cloud-region-in-greece.
D’Anastasio, C., “A Video Game Pile-Up Next Year Doesn’t Guarantee a Sales Boom,” Bloomberg, September 16, 2022; https://www.bloomberg.com/news/newsletters/2022-09-16/game-releases-from-zelda-to-hogwarts-next-year-may-not-lead-to-higher-sales.
“T-Mobile 5G Powers Inspection Robot from InDro Robotics,” Business Wire, September 26, 2022; https://www.businesswire.com/news/home/20220925005071/en/.
Siddiqui, F., “Elon Musk debuts Tesla robot, Optimus, calling it a ‘fundamental transformation’,” Washington Post, October 1, 2022; https://www.washingtonpost.com/technology/2022/09/30/elon-musk-tesla-bot/.
“Launch of ‘QuickBooks Online Advanced’ aims to empower accountants and accelerate small business growth,” Yahoo! Finance, September 28, 2022; https://finance.yahoo.com/news/launch-quickbooks-online-advanced-aims-080000880.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

The Most Anticipated Video Game Releases Are Finally Coming Soon

Posted on October 11, 2022December 18, 2023 by Veronica Carlasuc

The video game world has been desperate for new game releases for a few years, but things could look a lot different going into 2023 and 2024 as a bunch of new titles and sequels are expected. Over the past few years, lots of highly anticipated games were delayed.

Nintendo and Sony

Activision Blizzard and Capcom Co. Ltd.

Other new video game releases include Diablo IV from Activision Blizzard Inc., Street Fighter VI from Capcom Co. Ltd., and Forspoken from Square Enix Holdings Co Ltd.¹

Take-Two Interactive Software Inc.

Take-Two Interactive Software Inc.’s flagship label, Grand Theft Auto VI was in the headlines recently after a series of leaked videos showed an early build of the game. This was worrisome since Grand Theft Auto VI is one of the most financially successful games for the company and drives millions of dollars of revenue each year.

Grand Theft Auto VI will be released in the fiscal year 2025, which begins in April 2024 for Take-Two Interactive Software.²

Roblox Corp.

Lastly, Roblox Corp., a virtual gaming platform creator, announced that it plans to introduce immersive ads to its virtual worlds. The CEO of the company said that Roblox has been dreaming about these ads for 15 years.

In the past, Roblox has had rewarding partnerships with brands like Ralph Lauren and Chipotle, and has offered users branded games, virtual concerts, and items. However, with immersive ads, the company plans to have players interact with advertisements inside of games.³

CD Projekt S.A.’s New Releases

CD Projekt S.A., Poland’s biggest computer video game studio, pulled through stronger than expected earnings in 2021. This comes as the company’s flagship and significantly anticipated game Cyberpunk 2077 didn’t do so well.

Cyberpunk 2077 was released in late 2020 and cost the company 1.2 billion-zloty (CAD $335.8 million). Initially, there were many client complaints and glitches in the game. Furthermore, the game was also suspended from Sony’s PlayStation store. It’s worth noting that the company has since fixed most of the issues.

CD Projekt S.A. is also planning the release of Witcher 3: Wild Hunt. This game is in its early stage but recently ran into problems according to its 2022 plans.⁴

Playstudios’s Acquisition of Brainium

PLAYSTUDIOS, Inc, a developer and publisher of free-to-play casual video games for mobile and social platforms, announced the acquisition of Brainium for $70 million in cash, with a few conditions.

Branium is one of the long-standing publishers of casual games like Solitaire, Spider Solitaire, Sudoku, and Mahjong. With this acquisition, PLAYSTUDIOS’s game portfolio would increase and double its average daily active user count.

Jason Hahn, EVP of Corporate and Business Development of PLAYSTUDIOS said that this acquisition “checks all the boxes on our growth strategy.”⁵

Investing in Video Games with HERO ETF

HERO ETF Portfolio Strategy and Activity

For the month, Nintendo Co Ltd. made the largest contribution to the Fund, followed by CD Projekt S.A. and Square Enix Holdings Co Ltd. The largest detractors to performance for the month were Electronic Arts Inc., followed by Bilibili Inc., and Netease Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Japan and China.

For the latest information on investing in video games and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

D’Anastasio, C., “A Video Game Pile-Up Next Year Doesn’t Guarantee a Sales Boom,” Bloomberg, September 16, 2022; https://www.bloomberg.com/news/newsletters/2022-09-16/game-releases-from-zelda-to-hogwarts-next-year-may-not-lead-to-higher-sales.
Smith, C., “Take-Two Stock Fell Hard After the Next Grand Theft Auto Was Leaked. Why It’s Already Recovered.,” Barron’s, September 9, 2022; https://www.barrons.com/articles/grand-theft-auto-vi-take-two-stock-51663615604?noredirect=y.
D’Anastasio, C., “Roblox Jumps on Plan to Introduce Immersive Ads in Games,” BNN Bloomberg, September 9, 2022; https://www.bnnbloomberg.ca/roblox-jumps-on-plan-to-introduce-immersive-ads-in-games-1.1816895.
Martewicz, M., “CD Projekt Beats Estimates as Cyberpunk-Tainted Year Wraps Up,” Bloomberg, April 14, 2022; https://www.bloomberg.com/news/articles/2022-04-14/cd-projekt-beats-estimates-as-cyberpunk-tainted-year-wraps-up.
“PLAYSTUDIOS Acquires Mobile Casual Game Studio Brainium, Adding a Rich Suite of Popular Games to the Company’s Portfolio,” Yahoo! Finance, October 13, 2022; https://finance.yahoo.com/news/playstudios-acquires-mobile-casual-game-104500630.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How Much Do Canadians and Americans Have in Savings?

Posted on October 7, 2022October 31, 2022 by Veronica Carlasuc

With the S&P 500 hitting new lows for 2022 and the Dow Jones Industrial Average falling into a bear market, pessimistic investors are hoarding cash. In fact, Canadians built up a record amount of savings during the pandemic. According to national economic data, accumulated savings from the first quarter of 2020 to the second quarter of 2021 was around $300 billion (13% of GDP).

Why Did Canadians Save So Much During the Pandemic?

Before the pandemic, the savings rate—Canada’s total savings as a percentage of disposable income—had been declining for years. The pandemic reversed that trajectory thanks to financial assistance from the federal government and a substantial drop in consumer spending.

It’s worth noting that Canadians lost an average of $1,600 in labour income in 2020. But the loss of disposable household income was more than offset by government support programs. In aggregate, the direct fiscal stimulus provided by the government amounted to about $3,400 per Canadian aged 15 or older. In addition, due to COVID-19 fears and lockdown measures, Canadians also spent around $4,000 less in 2020.

As a result, household net savings totalled around $13,105 per household in 2020 and $9,972 in 2021. That’s a little over $300 billion.

How Much of the $300 Billion Remains?

To say Canadians are sitting on a $300 billion windfall waiting to juice the economy, would be a little misleading. There’s a big difference between excess savings (savings that are above and beyond what consumers would have typically saved before the pandemic) and available cash.

The amount of available cash is much smaller than excess savings. Statistics Canada calculates savings before large assets like homes, renovations, and mutual funds, all areas that Canadians spent on over the last two years.

How much of that $300 billion is left after that? Analysts at CIBC Capital Markets estimate that there is around $90 billion in excess deposits. That might sound like a lot, but it covers just one and a half months’ worth of retail spending in Canada.

And, because of high inflation and rising interest rates, more and more of that will go to paying down debt. Despite the influx of cash and growing savings, household debt ballooned during the pandemic. While Canadians paid down some debt, mortgage debt on real estate more than doubled in 2021 from 2019.

Are Household Debt Levels Climbing?

According to Statistics Canada, household debt is climbing again. In the second quarter of 2022, household debt as a proportion of income hit a record 181.7%, up from 179.7% in the first quarter. That means Canadian households have $1.82 in debt for every dollar of disposable income.

Higher household debt ratios are a negative economic indicator since that debt is borrowed on future income and economic activity. Household debt is mostly mortgage debt but it also includes items like credit card debt. Keep in mind, 181.7% is just an average; only one third of Canadian households have a mortgage.

The problem with a high household debt ratio is that it reduces a household’s ability to respond to economic shocks. Having an emergency fund or home equity line of credit (HELOC) can help mitigate risks but tapping into it to buy a hot tub and then having to pay it back when you need emergency funds can compound risks.

How Does Inflation Erode Savings?

Runaway inflation is also having a huge impact on savings. In an effort to avoid an economic meltdown during the 2020 pandemic, the Bank of Canada, U.S. Federal Reserve, and other central banks, cut their key overnight lending rates to historic lows. Low interest rates make it easier for businesses and individuals to borrow, which in theory, helps support economic growth.

Since Canadians and Americans took out or renewed mortgages or loans at near-zero interest rates, the cost of serving that debt during the pandemic was manageable. But with interest rates rising fast, a larger share of disposable income is being used to cover that interest.

To service that growing debt, roughly 7.3 million Canadians over the age of 18 have taken out loans or used their credit cards to keep up with inflation. And more than half (53%) of Canadians say they can’t keep up with rising inflation, especially with the price of food, gasoline, and energy.

Moreover, when asked in February 2022, half (51%) of Canadians said they wouldn’t be able to cover an unexpected $1,000 expense. Because of inflation, approximately 15% say they wouldn’t be able to pay for an unexpected bill regardless of the amount.

How Has Inflation Affected Spending in the U.S.?

The same kind of dynamics are happening in the U.S. During the pandemic Americans socked away an estimated $2.5 trillion in extra savings. But that nest egg is dwindling fast as Americans used their cash to combat the worst inflationary environment in over 40 years.

According to one report, two-thirds (67%) of Americans say they are using the money saved up during the pandemic to meet their daily needs.

In addition to rising inflation, wages are not keeping pace. From May 2021 to May 2022, real wages adjusted for inflation fell 3.0%, widening the gap between earnings and the cost of living. To deal with rising costs:

8% of Americans have completely emptied their savings.
23% have depleted a substantial amount they’d saved
36% have spent a small amount from their savings

Not surprisingly, consumer debt is rising in the U.S. and savings are falling. Between the fourth quarter of 2021 and the first quarter of 2022, U.S. consumer debt rose by $266 billion. And that number continues to rise as more and more Americans tap their savings to make ends meet.

Through the week ending on September 21, cash had inflows of $30.3 billion while global equity funds saw outflows of $7.8 billion. Bond funds, meanwhile, lost $6.9 billion and gold lost $400 million.

With inflation still at 40-year highs and interest rates on the rise, more analysts are suggesting the U.S. and Canada are heading for a recession. Cash and commodities are expected to continue to outperform bonds and stocks, meaning savings will become a lot more important.

Canadians and Americans Are Seeing Their Savings Deplete

With inflation topping eight percent, anyone with money is seeing their savings evaporate. It’s a different story than 1981 when inflation topped more than 12% and banks were paying out more than 19% in interest. Even in the early 1990s, when inflation was at 5%, banks were paying more than 9% in interest.

The reason? Banks don’t need to pay more interest on accounts unless they have to. And there’s not a lot of incentive to do that right now; lower interest means more profits for banks.

All Canadians hope to retire in comfort, but few are taking the steps necessary to save enough to make it viable. Some don’t have enough money saved, others are seeing their savings depleted by rising inflation, and some don’t make enough to save a significant amount of money. Even some high earners are not prepared for retirement.

When it comes to creating a path to saving, it’s important to have a clear goal and know how much you need to save. It’s also wise to begin saving as early as possible. One way to maximize your monthly income and achieve your retirement goals is by investing in a high-interest savings exchange-traded fund (ETF) and fixed income ETFs.

About Evolve ETFs

With over $3 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing disruptive innovation ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

For more blogs like this, insights on investing, and updates on related investment products, sign up for our weekly newsletter here.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

5 of the Top Cybersecurity Breaches of 2022

Posted on October 5, 2022October 6, 2022 by Veronica Carlasuc

Cybersecurity Awareness Month takes place every October to help businesses and individuals stay secure online by understanding the risks associated with malware, phishing, ransomware, and cyberattacks. This includes how to identify, prevent, and fight data breaches.

Most people think they’re computer savvy and cannot fall for cyber scams, but the fact is, even tech experts fall for phishing attempts. Each year, more and more people and businesses get scammed online, and it’s costing us billions of dollars.

The Cost of Cyberattacks

In 2022 the average cost of a data breach hit an all-time high of $4.4 million, up 2.6% from 2021 and a 13% increase from 2020. The damage from data breaches varies from industry to industry. For example, the average data breach in healthcare hit $10.10 million in 2022, the highest for any industry. The second highest industry was finance, averaging $5.97 million, followed by data breaches in critical infrastructure businesses at $4.82 million.

Cyber criminals also know the best geographical targets for making the most money. The top five countries and regions with the highest average cost of a data breach are the U.S. at $9.44 million, the Middle East ($7.46 million), Canada ($5.64 million), the UK ($5.05 million), and Germany ($4.85 million).

Canada continues to be a top magnet for cyber criminals with companies in the financial sector paying the biggest cost for data breaches at $520 per record. Canadian tech companies paid an average $433 per record, followed by the service industry at $362 per record. The national average across all sectors was $298 per record.

But there’s more to cybercrimes than cost.

Online attacks often lead to the theft of a customer’s sensitive, critical information. Data breaches can also ruin a company’s reputation. A survey by Forbes found that 46% of businesses suffered reputational damage from a data breach and 19% of organizations suffered both reputation and brand damage as a result of a third-party data breach. That’s almost half of all businesses surveyed.

Companies That Experienced Cyberattacks in 2022

From cryptocurrency thefts to telecom giants, ride share companies, and state-funded attacks, 2022 has been one for the record books, and it’s not over yet.

Marquard & Bahls

In late January, hackers took down German energy giant Marquard & Bahls. A ransomware program forced the closure of up to 2,300 gas stations across Germany. Shell, one of the world’s biggest oil suppliers, had to re-route its supplies to alternative supply depots.

Initially, experts said the attacks came from BlackHat, a Russian group that has targeted oil pipelines. The country’s Interior Ministry said there was no data to prove that cyberattacks are linked to Russia.

Crypto.com

Blockchain is touted as being one of the most secure forms for processing transactions, but they are susceptible to data breaches, especially from the inside.

In January, an attack at Crypto.com, one of the world’s largest cryptocurrency exchanges, targeted 483 people’s cryptocurrency wallets, walking away with $18 million in Bitcoin, $15 million in Ethereum, and $66,200 in other cryptocurrencies.

The company initially downplayed the data breach, calling it “an incident” saying “no customers experienced a loss of funds,” but eventually, it admitted money had indeed been stolen.

GiveSendGo

Cyber criminals didn’t show Christian fundraising site GiveSendGo any love in February. The site was targeted a number of times that month. On February 13, a hacker leaked a file containing the personal information, including names, donation amounts, and limited credit card data, of more than 92,000 people who donated money to the Freedom Convoy—a truckers protest that was opposed to COVID-19 vaccine mandates and restrictions that shut down Ottawa for three weeks.

Two days later, a bigger leak revealed the entire donor history of every single person who had ever used GiveSendGo, as well as limited credit card data.

Later in the month, GiveSendGo’s “Adopt a Trucker” campaign had its donor data leaked. On top of that, the campaign’s founder had his emails hacked and leaked.

Microsoft Corp

Even a software giant like Microsoft Corp can become a victim of cybercrime. In March 2022, Microsoft was targeted by LAPSUS$, a hacking group that had previously targeted Nvidia, Cisco, Samsung, T-Mobile, Okta Inc, Ubisoft, and Impresa.

The hackers gained access to Microsoft’s systems on March 20 and posted a screenshot on their Telegram channel saying they had hacked Microsoft and compromised Cortana, Bing, and several other products.

It took two days for Microsoft to contain the breach. While the hackers did steal some material, the company said only one account was compromised and no customer data was stolen.

Uber Technologies, Inc

Ride share company Uber was hacked in mid-September by LAPSUS$. The company only found out after the hacker announced the attack on its Slack organization, saying: “I am a hacker and Uber has suffered a data break.” The company responded by shutting down its internal messaging service.

The hacker, an 18-year-old using the alias Tea Pot, said he gained access to the company’s data by sending a text message to an Uber worker claiming to be an Uber IT employee. He then persuaded the worker to give him their password. The information stolen from the breach was then sold on the dark web.

The same hacker claims to have also breached video game maker Rockstar Games and downloaded early footage for Grand Theft Auto VI.

The Future of Cyberattacks

Despite our best efforts to thwart data breaches, cybercrimes will continue to damage organizations at a torrid pace. By 2025, cybercrime is projected to cost the global economy $10.5 trillion annually, up from $4 trillion in 2015.

To put that number into perspective, if cybercrime was a country, it would be the third largest economy in the world, behind only the U.S. and China. Canada’s annual GDP is a mere $1.5 trillion, making it the ninth-largest economy in the world.

With cybersecurity spending on the part of government entities, corporations, and individuals on the rise, cybersecurity stocks could be some of the biggest winners over the coming years.

Investing in the Cybersecurity Industry with CYBR ETF

If you’re looking to invest in a cybersecurity ETF, consider Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR). CYBR ETF invests in global companies involved in the cybersecurity industry. For more information, visit the fund page here: https://evolveetfs.com/product/cybr/.

For the latest information on investing in cybersecurity and industry updates on related investment products, sign up for our weekly newsletter.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Infographic: Quick Facts About Cybersecurity

Posted on October 3, 2022October 6, 2022 by Veronica Carlasuc

October is Cybersecurity Awareness Month. To help you better understand how the cybersecurity threatscape has evolved since pandemic lockdowns began in 2020, we have created the infographic below:

The contents of this piece are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Moderna, Pfizer and the Updated Vaccine

Posted on September 30, 2022October 21, 2022 by Veronica Carlasuc

Every season plays out differently, but once summer fades, people start to think about flu season and when to get their shots. This year is no different. If anything, without pandemic restrictions and the roll-out of new COVID-19 booster shots, it’s expected to be busier than normal.

The U.K. became the first county to pass a modified COVID-19 vaccine, which targets the Omicron variant. Other countries, including Canada and Australia, are expected to follow suit.¹In the U.S., the Food and Drug Administration (FDA) authorized COVID-19 booster shots that target the Omicron BA.5 subvariant as the country prepares for another expected surge of infections this fall and winter.

It marks the first time the FDA has authorized an updated vaccine since the original shots became available in December 2020. The U.S. has, so far, secured 171 million doses of Moderna’s and Pfizer’s updated vaccines.²

Moderna and Pfizer have peacefully dominated the COVID-19 vaccine market, but that truce has come to an end. Moderna recently filed a patent infringement lawsuit against Pfizer and its partner BioNTech in the U.S. and Germany for patents Moderna says it filed between 2010 and 2016.³

Moderna is looking to protect the innovative mRNA technology it pioneered and patented in the decade leading up to the pandemic, allowing it to develop its own COVID-19 vaccine, Spikevax, in “record time.”

Roche Holdings Ltd

Roche Holdings Ltd. recently launched its Digital LightCycler Systems, a digital polymerase chain reaction system that helps clinical researchers better understand the nature of a patient’s cancer, infection, or genetic disease and lead to early diagnosis and treatment strategies.

The Digital LightCycler Systems will be available in 15 countries in 2022, with plans to launch in additional countries in the near future.⁴

Roche also announced the launch of the Elecsys IGRA SARS-CoV-2, a new diagnostic test designed to better understand the immune response to SARS-CoV-2 infection or vaccination.⁵

Siemens AG

Siemens AG is a special industrial machinery giant whose Siemens Healthineers segment develops, manufactures, and sells various diagnostic and therapeutic products and services. It also provides clinical consulting services.

The Munich, Germany-based company announced recently that its Deep Resolve Magnetic Resonance Imaging (MRI) system, powered by Artificial Intelligence (AI), allows users to accelerate MRI scans by up to 70%.⁶

The quality of MRI imaging is defined by the trade-off between scan time, image noise, and resolutions. Improving one means compromising on the others. Deep Resolve eliminates this dilemma, enabling clinicians to choose a faster scan time while reducing noise and keeping the same resolution.

For example, traditional MRI imaging on the knee can take approximately 10 minutes, but with Deep Resolve, the time has been reduced to under two minutes. Deep Resolve is not limited to a particular region of the body and can be used in almost every diagnostic procedure using MRI.

Investing in Healthcare with LIFE ETF

LIFE ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Roche Holdings Ltd made the largest contribution to the Fund. The largest detractors to performance for the month were GSK PLC, followed by Sanofi ADR, and Zoetis Inc. On last rebalance, these securities were added to the portfolio: Siemens AG and Zoetis Inc. By weight, the Fund’s largest geographic exposure was to the United States, followed by Switzerland and Britain.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

Loftus, P., “Variant-Targeted Covid-19 Boosters Test the Promise of mRNA Technology,” The Wall Street Journal, August 21, 2022; https://www.wsj.com/articles/variant-targeted-covid-19-boosters-test-the-promise-of-mrna-technology-11661030696.
Kimball, S., “FDA authorizes Covid booster shots that target omicron BA.5 variant,” CNBC, August 31, 2022; https://www.cnbc.com/2022/08/31/fda-authorizes-covid-booster-shots-that-target-omicron-bapoint5-variant-.html?__source=iosappshare%7Ccom.microsoft.Office.Outlook.compose-shareextension.
“Moderna Sues Pfizer And BioNTech For Infringing Patents Central To Moderna’s Innovative MRNA Technology Platform,” Moderna, Inc., August 26, 2022; https://investors.modernatx.com/news/news-details/2022/Moderna-Sues-Pfizer-and-BioNTech-for-Infringing-Patents-Central-to-Modernas-Innovative-mRNA-Technology-Platform/default.aspx.
“Roche launches a digital PCR system, a powerful new diagnostics platform in the fight against cancer and other diseases,” Roche, August 22, 2022; https://www.roche.com/media/releases/med-cor-2022-08-23.
“Roche launches new diagnostic test for the better understanding of immune response to SARS-CoV-2,” Roche, August 14, 2022; https://www.roche.com/media/releases/med-cor-2022-08-15.
“Siemens Healthineers accelerates and improves Magnetic Resonance Imaging with Artificial Intelligence,” Siemens Healthineers, July 13, 2022; https://www.siemens-healthineers.com/press/releases/deepresolve.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Market turbulence and recessionary fears disrupt innovation

Posted on September 26, 2022October 14, 2022 by Veronica Carlasuc

Automobile Innovation

In August, officials in California—the most populous state in the U.S.—recently took a historic step to fight climate change. Starting in 2035, sales of new gasoline-powered vehicles will be banned. In an attempt to boost sales of electric vehicles the state announced plans to phase out gasoline-powered vehicles. The new rule requires 35% of total new vehicle sales to be battery-powered or hydrogen by 2026, and 68% by 2030. In 2021, just 12.41% of all new cars sold in California were zero-emission.

This decision could motivate other states to implement similar policies. At least 15 states, including New York, New Jersey, and Pennsylvania, have adopted California’s vehicle standards when it comes to zero-emission cars.¹

Cybersecurity

Cybersecurity incidents around the world remain rampant. Over the past few weeks, several companies and organizations reported data breaches, hacks, and other forms of cyberattacks.

LastPass, a company with 33 million customers that provides auto-generated hard-to-crack passwords for users for multiple accounts, said that a hacker stole its source code and proprietary information. LastPass revealed that user passwords were not stolen and that customers do not need to take any action to secure their accounts. However, an investigation is under way into how the hacker was able to gain access.²

According to a report by the Telegraph, a major cyberattack delayed response times for the U.K.’s NHS 111 emergency telephone service. The target of the breach was Advanced, a software provider for 85% of the hotline services of the NHS.³

Cloud Computing

Fears of a recessions are growing as inflation remains persistent and central banks are raising rates. TD Securities believes that there is a 50% chance of a recession in the U.S. within the next 18 months.

In recessionary times, business spending typically declines. But according to a recent report by Equinix Inc, even with economic uncertainty hovering, 72% of the IT decision-makers said that their companies are planning to grow their digital technologies. In addition, more than 70% of decision-makers said that they are moving more functions to the cloud.⁴

Since cloud computing spending isn’t showing signs of slowing down, cloud services and solutions providers are taking steps to broaden the use of the cloud. In July, Microsoft Corp. announced the general availability of Oracle Database Service for Microsoft Azure. This offering will allow Azure’s customers to provide, access, and monitor Oracle Database services in Oracle Cloud Infrastructure (OCI) with a familiar experience.

Users will also be able to migrate or build new applications on Microsoft’s Azure and connect it to Oracle Database services that run on OCI.⁵

E-Gaming

It’s been rough few months for video game sales in the European markets as there’s been a shortage of consoles and a lack of new game releases.

In July, according to Game Industry.biz, sales of physical and digital video games dropped 38% year-over-year to 8.62 million units sold. As for game console sales, year-to-date, sales in the European markets are down over 26%. The biggest factor creating the decline in sales is the shortage of consoles like PS5 and Xbox Series S and X.⁶

Meanwhile, in its financial results, the company said that there’s a slowdown in the gaming industry and it’s impacting the company’s financial performance. Aside from Nvidia, other major video gaming companies like Microsoft and Sony have also reported weaker demand and a dismal outlook recently.⁷

5G

Recently, T-Mobile US Inc., a wireless carrier in the U.S. with one of the biggest 5G networks, announced that it is planning to use SpaceX’s Starlink satellites to provide mobile users with network access in parts of the U.S. By directly connecting mobile phone users with satellites in orbit, T-Mobile would no longer rely on cell towers and could offer services like sending text messages and images in places where coverage doesn’t currently exist.

The satellites will use T-Mobile’s mid-band spectrum to create a new network. This new service will be compatible with most phones that are used by the T-Mobile customers already and the beta phase for texting services will begin by the end of next year.

By relying on satellites instead of cell towers, it could be useful for emergency situations in remote areas. To date, SpaceX has launched close to 3,000 low-earth-orbiting Starlink satellites since 2019.⁸

Robotics & Automation

The robotics and automation market is setting up for a great future. According to a report by Precedence Research, the global artificial intelligence (AI) robot market industry is expected to be around $54.3 billion by 2030 accounting for a compounded annual growth rate of 21.81%.

In 2021, the AI robot market size was worth $9.2 billion and North America held the largest market share with 32.5%.

According to the report, there’s growing acceptance for robots in the healthcare sector as they provide a good link between patients and the healthcare professionals. Furthermore, sectors like manufacturing, construction, and automobile are starting to embrace automation.⁹

Fintech

PayPal Holdings Inc. recently saw its stock price jump. This rise in the stock price came as it was revealed that activist investor Elliott Investment Management has become one of the largest shareholders of the firm, as well as after the company announced cost-cutting moves that will result in $900 million in savings this year.

Elliott Investment Management has taken a $2.0 billion stake in PayPal and the firm has entered into an information sharing agreement with Jesse Cohn, a managing partner for Elliott.

PayPal CEO, Dan Schulman, has been very vocal about improving PayPal’s ability to grow revenue faster than expenses. In the most recent quarter, the company’s revenue jumped 18%.¹⁰

Genomics

The U.K. became the first county to pass a modified COVID-19 vaccine, which targets the Omicron variant. Other countries, including Canada and Australia, are expected to follow suit.¹¹ The U.S. has, so far, secured 171 million doses of Moderna’s and Pfizer’s updated vaccines.¹²

Investing in Innovation with EDGE ETF

Disruptive innovation gives your portfolio an edge by ensuring you keep up with trends and developments in a quickly changing world, giving you exposure to high-growth industries.

EDGE ETF Portfolio Strategy and Activity

For the month, PayPal Holdings Inc. made the largest contribution to the Fund, followed by Corteva Inc, and Evolve Cyber Security Index Fund (CYBR). On the last rebalance, these securities were added to the portfolio: FANUC Corp, Argenx SE, Waters Corp, and Block Inc.

For more blogs like this, insight on investing, and updated on related investment products, sign up for our weekly newsletter here.

Sources:

Newburger, E., “California bans the sale of new gas-powered cars by 2035,” CNBC, August 25, 2022; https://www.cnbc.com/2022/08/25/california-bans-the-sale-of-new-gas-powered-cars-by-2035.html.
Murphy, M., “World’s Most Popular Password Manager Says It Was Hacked,” BNN Bloomberg, August 25, 2022; https://www.bnnbloomberg.ca/world-s-most-popular-password-manager-says-it-was-hacked-1.1810651.
Prem, P., “Cyber Attack Disrupts NHS 111 Emergency Line in UK: Telegraph,” BNN Bloomberg, August 6, 2022; https://www.bnnbloomberg.ca/cyber-attack-disrupts-nhs-111-emergency-line-in-uk-telegraph-1.1802303.
Gillin, P., “What recession? Tech spending stays robust as digital transformation plans forge ahead,” Silicon Angle, July 27, 2022; https://siliconangle.com/2022/07/27/recession-tech-spending-stays-robust-digital-transformation-plans-forge-ahead.
“Oracle and Microsoft announce availability of Oracle Database Service for Microsoft Azure,” Microsoft Corp, July 20, 2022; https://news.microsoft.com/2022/07/20/oracle-and-microsoft-announce-availability-of-oracle-database-service-for-microsoft-azure.
Drig, C, “Video game sales drop in July as release schedule dries up | European Monthly Report,” Game Industry.biz, August 12, 2022; https://www.gamesindustry.biz/video-game-sales-drop-in-july-as-release-schedule-dries-up-european-monthly-report.
Schuetz, M., “Nvidia disappoints with big miss in revenue on slump in gaming,” BNN Bloomberg, August 8, 2022; https://www.bnnbloomberg.ca/nvidia-disappoints-with-big-miss-in-revenue-on-slump-in-gaming-1.1802992.
“Musk’s SpaceX and T-Mobile plan to connect mobile phones to satellites, boost cell coverage,” Reuters, August 26, 2022; https://www.reuters.com/business/media-telecom/elon-musks-spacex-t-mobile-us-plan-boost-cellular-coverage-space-2022-08-26.
“Artificial Intelligence (AI) Robots Size to Worth Around USD 54.3 Bn by 2030,” Precedence Research, September 6, 2022; https://www.globenewswire.com/news-release/2022/09/06/2510219/0/en/Artificial-Intelligence-AI-Robots-Size-to-Worth-Around-USD-54-3-Bn-by-2030.html.
Surane, J., “PayPal Surges as Analysts Cheer ‘Tough Love’ From Elliott,” Bloomberg, August 3, 2022; https://www.bloomberg.com/news/articles/2022-08-02/paypal-surges-on-savings-from-cost-cuts-elliott-investment?leadSource=uverify%20wall.
Loftus, P., “Variant-Targeted Covid-19 Boosters Test the Promise of mRNA Technology,” The Wall Street Journal, August 21, 2022; https://www.wsj.com/articles/variant-targeted-covid-19-boosters-test-the-promise-of-mrna-technology-11661030696.
Kimball, S., “FDA authorizes Covid booster shots that target omicron BA.5 variant,” CNBC, August 31, 2022; https://www.cnbc.com/2022/08/31/fda-authorizes-covid-booster-shots-that-target-omicron-bapoint5-variant-.html?__source=iosappshare%7Ccom.microsoft.Office.Outlook.compose-shareextension.
“Moderna Sues Pfizer And BioNTech For Infringing Patents Central To Moderna’s Innovative MRNA Technology Platform,” Moderna, Inc., August 26, 2022; https://investors.modernatx.com/news/news-details/2022/Moderna-Sues-Pfizer-and-BioNTech-for-Infringing-Patents-Central-to-Modernas-Innovative-mRNA-Technology-Platform/default.aspx.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

AWS & Microsoft Azure Expand Cloud Offerings

Posted on September 22, 2022December 18, 2023 by Veronica Carlasuc

Users will also be able to migrate or build new applications on Microsoft’s Azure and connect it to Oracle Database services that run on OCI.²

Furthermore, Unity Software Inc., a video game software development company, announced that it’s partnering with Microsoft’s cloud solutions provider Azure to create real-time 3D experiences. Developers will be able to use Azure and Unity together, which gives users access to various new tools and makes it easier for Unity games to be on PC and Xbox.³

Amazon Web Services (AWS), a subsidiary of Amazon.com Inc., recently announced a premium paid subscription service for individuals and teams looking to improve their cloud computing skills.

The individual subscription is priced at $29.00 per month or $299.00 for the year. It offers three practice exams for the AWS Certification program. Subscribers also get builder labs and practical guided exercises.⁴

AWS has been one of the top profit engines for Amazon.com. This new premium subscription could make the cloud computing solutions provider even more profitable.

Snowflake’s Solid Financial Performance

Snowflake Inc. is a cloud computing solutions provider. The company reported strong financial performance for its most recent quarter with improved revenue and solid profits.

Most notably, remaining performance obligations jumped 78% to $2.7 billion and net revenue retention was up 171%. Snowflake also said that its total customer count stands at 6,808 and 246 of these customers have trailing revenue of more than $1 million.

Analysts believe that the company’s strong financials are a testament of the strategic business model in place at the company and they expect Snowflake Inc.’s stock to trade up significantly.⁵

DocuSign’s Improved Outlook

DocuSign Inc., an electronic signature software provider, recently reported its financial results that were above analysts estimates. The company also increased its outlook for billings this year.

According to analysts, the guidance looks conservative but it doesn’t indicate a slowdown in growth for the reminder of the year. In fact, guidance was better than expected, and investors should take a “wait-and-see” approach until a new CEO for the company is announced. Former CEO Dan Springer stepped down in July.⁶

Investing in the Cloud with Evolve ETFs

Over the past decade, cloud has fundamentally changed the way businesses and individuals access data. If you’re interested in investing in cloud, consider a cloud computing ETF.

Evolve Cloud Computing Index Fund (DATA ETF), Canada’s first cloud computing ETF. DATA ETF invests primarily in equity securities of companies located domestically or internationally that have business operations in the field of cloud computing. To learn more about DATA ETF, please click here: https://evolveetfs.com/data/.

DATA ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month of August, Snowflake Inc. made the largest contribution to the Fund, followed by Zoominfo Technologies Inc, and Bill.com Holdings Inc. The largest detractors to performance for the month were Amazon.com Inc., followed by SAP SE, and Salesforce Inc. On last rebalance, these securities were added to the portfolio: Concentrix Corp. and DocuSign Inc. By weight, the Fund’s largest geographic exposure was to United States, followed by Germany and Japan.

Looking for a more diversified investment solution? The award-winning Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5g, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/ or click here.

For more blogs like this, insight on investing and investment products, sign up for our weekly newsletter here.

Sources:

Gillin, P., “What recession? Tech spending stays robust as digital transformation plans forge ahead,” Silicon Angle, July 27, 2022; https://siliconangle.com/2022/07/27/recession-tech-spending-stays-robust-digital-transformation-plans-forge-ahead.
“Oracle and Microsoft announce availability of Oracle Database Service for Microsoft Azure,” Microsoft Corp, July 20, 2022; https://news.microsoft.com/2022/07/20/oracle-and-microsoft-announce-availability-of-oracle-database-service-for-microsoft-azure.
“Unity and Microsoft announced Azure cloud partnership,” Venture Beat, August 8, 2022; https://venturebeat.com/games/unity-and-microsoft-announced-azure-cloud-partnership.
Sawers, P., “Amazon launches AWS Skill Builder training subscriptions starting at $29 per month,” Techcrunch, August 2, 2022; https://techcrunch.com/2022/08/02/amazon-launches-aws-skill-builder-subscriptions-starting-at-29-per-month/?guccounter=1.
Savitz, E.J., “Snowflake Stock Soars. Sales Growth Crushed Estimates,” Barron’s, August 25, 2022; https://www.barrons.com/articles/snowflake-earnings-stock-price-51661375311.
Woelfel, J., “DocuSign Stock Surges on Earnings Beat, Boost to Billings Forecast,” Barron’s, September 9, 2022; https://www.barrons.com/articles/docusign-stock-price-earnings-51662710712?mod=md_stockoverview_news.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Evolve Slate Global Real Estate Enhanced Yield Fund Begins Trading Today on TSX

Posted on September 22, 2022September 22, 2022 by Veronica Carlasuc

TORONTO, Sept. 22, 2022 /CNW/ – Evolve Funds Group Inc. (“Evolve” or “the Manager”) is pleased to announce the launch of an actively managed portfolio of public listed real estate securities providing enhanced yield to investors. The Evolve Slate Global Real Estate Enhanced Yield Fund (“BILT”) has closed its initial offering of units and will begin trading on the Toronto Stock Exchange (“TSX”) today under the ticker symbol: BILT. Evolve has retained Slate Securities L.P. (“Slate Securities”), an investment management business of Slate Asset Management (“Slate”), as the sub-advisor for BILT.

Ticker	Currency
BILT	CAD Hedged

“REITs can be an effective hedge to inflation,” says Raj Lala, President and CEO at Evolve. “BILT provides investors with access to the real estate market through enhanced yield and the expertise of Slate’s portfolio management team. Slate is a leader in the real estate market with a proven track record of creating value for partners and investors.”

The investment objective of BILT is to provide a recurring income level consistent with the underlying rental income derived from properties owned by publicly listed real estate issuers. BILT targets a yield return in excess of the yield return of the FTSE EPRA/NAREIT Developed Index (the “Real Estate Index”). BILT aims to achieve a level of volatility which is lower than the volatility of the FTSE EPRA/NAREIT Developed Index measured by using the standard deviation of returns. The expected return will be derived from the yield return but also from capital appreciation and potentially other yield enhancing strategies.

Slate Securities will actively manage the portfolio through an identified universe of about 2,000 issuers on a global basis that fall within its definition of real estate securities. The universe is reassessed and may vary over time as issuers and business models evolve. Slate Securities believes that option writing may have the potential to add value and is an effective way to help lower the level of volatility for an investor and potentially improve returns.

Slate Securities is an investment management platform specializing in real estate investing, across the public and private real estate markets. As a wholly owned subsidiary of Slate Asset Management, a global investment and asset management platform focused on real assets, Slate Securities benefits from deep expertise, insights and Slate investment opportunities. Slate Securities was founded with the objective of being the real estate solution for allocators.

“We are very pleased to be working with Evolve, a leader in thematic ETFs, to help bring BILT to the market at a time when real estate securities present a uniquely compelling investment opportunity,” says Fraser McEwen, Partner at Slate Securities. “Our team’s deep real estate investing expertise and track record of experience with yield focused real estate securities solutions will be a distinct advantage as we seek to construct and manage this portfolio to deliver long-term, sustainable value for our investors.”

BILT offers Canadian dollar denominated hedged ETF units (“Hedged ETF Units“).

About Evolve Funds Group Inc.

With over $2.8 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

Join us on social media: Twitter | LinkedIn | Facebook

About Slate Securities

Slate Securities is an investment management platform specializing in real estate investing, across the public and private markets. We invest across the real estate spectrum, taking a long-term view of portfolio construction and focusing on fundamentals to meet the goals and objectives of our clients. As a wholly-owned subsidiary of Slate Asset Management, a global real asset investor and manager, Slate Securities benefits from deep expertise, insights and Slate investment opportunities. Visit slatesecurities.com to learn more.

About Slate Asset Management

Slate Asset Management is a global alternative investment platform targeting real assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners. Slate’s platform has a range of real estate and infrastructure investment strategies, including opportunistic, value add, core plus and debt investments. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.

No securities regulatory authority has approved the contents of this news release. Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

BILT’s securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States, except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or solicitation of an offer to buy any of these securities in any jurisdiction in which the offering or sale is not permitted.

CONTACT INFORMATION:

Evolve ETFs, info@evolveetfs.com, t.416.214.4884, tf. 1.844.370.4884

Slate Securities: info@slatesecurities.com

MEDIA CONTACT:

Keith Crone, kcrone@evolveetfs.com, 416.966.8716

Karolina Kmiecik, karolina@slateam.com

EV Regulation & Incentives Improve in North America

Posted on September 20, 2022December 18, 2023 by Veronica Carlasuc

In August, officials in California—the most populous state in the U.S.—recently took a historic step to fight climate change. Starting in 2035, sales of new gasoline-powered vehicles will be banned. The state plans to phase out gasoline-powered vehicles in steps in an attempt to boost sales of electric vehicles. The new rule requires 35% of total new vehicle sales to be battery-powered or hydrogen by 2026, and 68% by 2030. In 2021, just 12.41% of all new cars sold in California were zero-emission.

Meanwhile in Canada, the government of British Columbia is increasing incentives for buying electric vehicles. The province announced that it will increase the rebate for battery-electric, fuel-cell electric, and long-range plug-in hybrid electric vehicles from $3,000 to $4,000.

The rebate rate for lower-range plug-in hybrid electric vehicles is also being increased to $2,000 from $1,500.

In a statement, The Ministry of Energy, Mines and Low Carbon Innovation of British Columbia said that more than 90% of the province’s residents would be eligible for the rebate and that they can save up $9,000 on new electric vehicles when federal incentives are added.²

As a boom in electric vehicle sales continues globally, money is pouring into the electric vehicle charging industry. This year, $4.8 billion has been rolled out towards increasing the number of charging stations worldwide.

BloombergNEF forecasts that cumulative investing in charging stations will surpass $360 billion globally by 2030 and over $1.0 trillion by 2040. An investment of $1.4 trillion would be needed for the entire fleet to consist of electric vehicles by 2050.³

Plug Power and Amazon

Plug Power Inc., a company that engages in providing end-to-end clean hydrogen and zero-emissions fuel cell solutions, signed a deal with Amazon.com Inc. recently to supply liquid green hydrogen.

Plug Power will supply Amazon with 10,950 tons of green hydrogen every year starting in 2025. Amazon said that it has 15,000 hydrogen fuel-cell-propelled forklifts, and it plans to increase that to 20,000 units in the next three years.

This deal is fruitful for Plug Power, as well. The company revealed that this deal will help them get closer to their $3.00 billion revenue goal by 2025. Also, the company granted Amazon a warrant to buy up to 16 million shares, at an exercise price of $22.98 a share for the first nine million shares.⁴

ChargePoint and the Climate Bill

ChargePoint Holdings Inc., a company that offers electric vehicle charging and charging solutions in the U.S., is getting a lot of attention from analysts.

Not too long ago, analysts at JPMorgan Chase projected that ChargePoint’s stock price could reach as high as $20.00. Now, Maheep Mandloi, an analyst at Credit Suisse has revealed that the Inflation Reduction Act (IRA) could trigger ChargePoint’s stock price to climb to $22.00. In a note to clients, analysts at Credit Suisse said that the climate bill could boost the stock price of the company by 50%.⁵

The IRA is a $437-billion-dollar bill that just passed recently, and it’s focused on climate, health subsidies, and drought relief. U.S. electric vehicle makers could be big beneficiaries of this bill as it offers incentives to them. Also, the bill could boost sales of electric vehicles in the U.S. as business and individuals could get credits.⁶

Investing in Electric Cars with CARS ETF

The Evolve Automobile Innovation Index Fund (TSX Ticker: CARS), CARS ETF, is Canada’s first automobile innovation ETF. CARS ETF takes a diversified approach to invest in the supply chains behind autonomous, connected, and electric vehicles. The fund has a portfolio of companies involved in the development of electric cars, self-driving cars, and automobile innovation. These include some of the world’s leading manufacturers and automobile companies. CARS ETF is a great way to gain access to the future of the automobile and shift your investments into gear.

CARS ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Fluence Energy Inc. made the largest contribution to the Fund, followed by Stem Inc., and Plug Power Inc. The largest detractors to performance for the month were Lion Electric Co., followed by Ambarella Inc., and Sitime Corp. On last rebalance, these securities were added to the portfolio: Aptiv PLC, ChargePoint Holdings Inc., EVgo Inc, Polestar Automotive Holding UK PLC, and SES AI Corp. By weight, the Fund’s largest geographic exposure was to the United States, followed by Japan and the Netherlands.

For more information on the CARS ETF or any of Evolve ETF’s lineup of exchange-traded funds, please visit our our website or contact info@evolveetfs.com.

For the latest information on auto innovation investing and industry updates on related investment products, sign up for our weekly newsletter.

Sources:

Newburger, E., “California bans the sale of new gas-powered cars by 2035,” CNBC, August 25, 2022; https://www.cnbc.com/2022/08/25/california-bans-the-sale-of-new-gas-powered-cars-by-2035.html.
“B.C. boosts electric-vehicle rebate to a maximum of $4K,” CBC, August 2, 2022; https://www.cbc.ca/news/canada/british-columbia/british-columbia-boosts-ev-rebate-1.6539386.
Fisher, R., “Car-Charging Investment Soars, Driven by EV Growth and Government Funds,” BNN Bloomberg, August 16, 2022; https://www.bnnbloomberg.ca/car-charging-investment-soars-driven-by-ev-growth-and-government-funds-1.1806282.
“Amazon signs green hydrogen supply deal with Plug Power,” Reuters, August 25, 2022; https://www.reuters.com/business/sustainable-business/amazon-signs-hydrogen-supply-deal-with-plug-power-2022-08-25.
“Why ChargePoint Shares Popped Today,” The Globe And Mail, September 7, 2022; https://www.theglobeandmail.com/investing/markets/stocks/JPM-N/pressreleases/10075266/why-chargepoint-shares-popped-today.
Laing, K., “Five Things That Biden’s Climate Bill Will Change for Automakers,” BNN Bloomberg, August 16, 2022; https://www.bnnbloomberg.ca/five-things-that-biden-s-climate-bill-will-change-for-automakers-1.1806535.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Cyberattacks Remain Rampant Around the World

Posted on September 16, 2022December 18, 2023 by Veronica Carlasuc

Cybersecurity incidents around the world remain rampant. Over the past few weeks, several companies and organizations reported data breaches, hacks, and other forms of cyberattacks.

Meanwhile, Nomad, a cross-chain token bridge that allows users to send and receive tokens between various blockchains, recently said that attackers have drained $200 million from the protocol—virtually all of the company’s funds.³ While the cyberattack at Nomad is fairly recent, cross-chain bridges have been severely targeted by cyber criminals in the past.

In early August, cyber criminals attacked Solana’s ecosystem for trading digital assets and stole not just Solana’s cryptocurrency (SOL), but also stablecoins compatible with the Solana blockchain, such as the USD coin. The company hasn’t said how much was stolen, but according to independent analysts from PeckShield, it could be as much as $8.0 million. In the past, Solana has had to deal with cybersecurity incidents like bot spam and Distributed Denial of Service (DDoS) attacks.⁴

It’s not just digital companies that are being affected by cyberattacks. The Ontario Cannabis Store, the only legal online retailer of recreational cannabis in Ontario and distributor to roughly 1,333 licensed cannabis stores, recently said that it was unable to process or deliver orders due to a cyberattack at one of its logistical partners—Dominion Logistics.⁵

BRP Inc., maker of snowmobiles and other recreational vehicles under brands such as Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft, and Can-Am vehicles, also experienced a cyberattack that led to suspension of operations. The company warned that the suspension of its operations could mean transaction delays with customers and suppliers.⁶

Palo Alto Networks Inc.

Palo Alto Networks Inc. recently announced a 3-for-1 stock split and increased its stock repurchase program after reporting a solid financial performance.

The split comes as high-profile technology companies like Apple Inc. and Alphabet Inc. have announced splits in hopes of lowering their stock prices to levels where they are more affordable for smaller investors.⁷

IronNet Inc.

IronNet, Inc. is an innovative cybersecurity solutions provider with a flagship product called DefenseSM. Recently, the company announced that a major European logistics company that offers courier, package delivery, and express mail service to million of customer across the continent will be deploying DefenseSM to defend against cyber threats.⁸

The company also announced that it has entered into an agreement with the U.S. Cybersecurity and Infrastructure Security Agency (CISA) to share information from IronNet’s DefenseSM platform to help the agency defend against increased global cyber threats.⁹

INVESTING IN THE CYBERSECURITY INDUSTRY WITH CYBR ETF

CYBR ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Palo Alto Networks Inc. made the largest contribution to the Fund, followed by Qualys Inc., and Darktrace PLC. The largest detractors to performance for the month were Okta Inc., followed by Cyxtera Technologies Inc. and Fortinet Inc. On last rebalance, IronNet Inc. was added to the portfolio.

For more information on CYBR ETF, please visit the fund page here: https://evolveetfs.com/product/cybr/.

For the latest information on investing in cybersecurity and industry updates on related investment products, sign up for our weekly newsletter.

Sources:

Murphy, M., “World’s Most Popular Password Manager Says It Was Hacked,” BNN Bloomberg, August 25, 2022; https://www.bnnbloomberg.ca/world-s-most-popular-password-manager-says-it-was-hacked-1.1810651.
Prem, P., “Cyber Attack Disrupts NHS 111 Emergency Line in UK: Telegraph,” BNN Bloomberg, August 6, 2022; https://www.bnnbloomberg.ca/cyber-attack-disrupts-nhs-111-emergency-line-in-uk-telegraph-1.1802303.
Kessler, S., and Betz, B., “Crypto Bridge Nomad Drained of Nearly $200M in Exploit,” CoinDesk, August 1, 2022; https://www.coindesk.com/tech/2022/08/02/nomad-bridge-drained-of-nearly-200-million-in-exploit.
Vincent, J., “Solana ecosystem hit by hack draining millions in crypto from 8,000 hot wallets,” The Verge, August 3, 2022; https://www.theverge.com/2022/8/3/23290149/solana-ecosystem-blockchain-attack-hack-wallets-phantom-slope-supply-chain.
Deschamps, T., “Ontario Cannabis Store deliveries halted after cyberattack,” BNN Bloomberg, August 9, 2022; https://www.bnnbloomberg.ca/ontario-cannabis-store-deliveries-halted-after-cyberattack-1.1803384.
“Cyberattack forces Ski-Doo maker BRP to suspend operations,” Global News, August 9, 2022; https://globalnews.ca/news/9047589/quebec-brp-skidoo-cyberattack.
Savitz, E.J., “Palo Alto Networks Stock Soars on Strong Earnings and 3-for-1 Stock Split,” Barron’s, August 23, 2022; https://www.barrons.com/articles/palo-alto-networks-stock-split-earnings-51661201304.
“One of Europe’s Largest Logistics Companies Selects IronNet to Increase its Network Visibility and Proactively Hunt for Cyber Threats,” Yahoo! Finance, August 25, 2022; https://finance.yahoo.com/news/one-europe-largest-logistics-companies-120500884.html.
“IronNet to Collaborate with CISA to Strengthen the Nation’s Cyber Defense,” Yahoo! Finance, August 17, 2022; https://finance.yahoo.com/news/ironnet-collaborate-cisa-strengthen-nation-120000722.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How Do Healthcare Stocks Perform During a Recession?

Posted on September 14, 2022December 18, 2023 by Veronica Carlasuc

The stock market is reeling and the odds of Canada and the U.S. economies tipping into a recession are increasing. A recession is generally defined as two consecutive quarters of negative GDP. Canada’s economy contracted 0.1% in July after four straight quarters of growth. It hasn’t recorded a full quarter of negative GDP growth this year but the Conference Board of Canada said the odds of a recession is 50/50, or down to a coin toss.

The odds of a recession in the U.S. are even greater, at 60%, as the world’s largest economy showed signs of slowing over the summer. In June, the odds of a recession were just 40%.

A recession is never good for a portfolio, it generally means people spend less, corporate earnings fall, and share prices tumble. But recessions don’t impact all sectors in the same way.

Recessions are typically bad for discretionary stocks, this includes travel/tourism, retail, restaurants, leisure/hospitality, real estate, and manufacturing/warehouse. Meanwhile, safe haven investments become increasingly popular during recessions because they have a history of providing stable revenue growth and reliable earnings.

One sector that many investors may seek shelter in during times of economic turmoil is healthcare.

How Have Healthcare Stocks Performed in Previous Recessions?

Historically, healthcare stocks are a defensive play that perform well during a recession. That’s because they provide products and services that are always in demand. When money is tight, people will probably give up discretionary spending, like a vacation or other expensive non-essentials, but they are not going to cancel their prescriptions or stop buying band aids, cold medicine, or other healthcare products.

That doesn’t mean healthcare stocks are recession-proof, but they are recession-resilient and tend to bounce back, minimizing losses more quickly. Case in point, during the brief pandemic-fueled recession in 2020, big name pharmaceutical companies like AstraZeneca, Sanofi SA, and Novartis AG all experienced a sell-off, much like the broader stock market did, but their share prices rebounded quickly.

AstraZeneca recovered from all of its share price losses in less than two months. By June 2020, Sanofi was trading above its February highs, and in January 2021, Sanofi hit a new record high.

Even if we go back to the Great Recession of 2008, which was significantly longer, the results were the same. Again, this is because even during recessions, people still rely on healthcare products and services. Few other sectors can lay claim to being that essential.

Why Do Healthcare Stocks Do Well Even During Recessions?

Big pharmaceutical stocks tend to perform relatively well during recessions for a number of reasons, some of the biggest include increased government spending on healthcare, an aging population, and their strong balance sheets.

When the economy is stable or performing to the upside, investors are willing to overlook a company’s weak balance sheet because they are confident in their underlying business and the fact that they will eventually generate income.

Poor macroeconomic conditions and rising interest rates hurt stocks that are not profitable because those companies need to borrow money to keep their businesses operational. Higher interest rates means it costs more to borrow, which increases their debt loads, drives down profits, or leads to greater losses and lower sales.

During recessions, fundamentals become more important with investors paying closer attention to balance sheets, cash flows, and guidance. This helps explain why during recessions, many investors shun speculative growth stocks and instead focus their attention on blue chip healthcare stocks with strong balance sheets.

How Much Does Canada and the U.S. Spend on Healthcare?

Rising healthcare costs around the world is another reason that supports long-term growth trends in the healthcare industry. In Canada, total health spending climbed to more than $308 billion in 2021, or $8,019 per Canadian. That’s up 12.8% from 2020. The big surge came on the heels of the pandemic. The growth rate in 2021 slowed to 2.2%, or 12.7% of GDP, which is more in line with historical spend.

Like other developed countries, Canada has seen its healthcare spending grow, and, at times, faster than the overall economy. Hospitals is the largest healthcare spending category at 25%, followed by drugs at 14%.

Canada is among the highest spenders when it comes to healthcare in the Organization for Economic Co-operations and Development, but it’s not the highest. Canada trails Sweden, Germany, France, and the U.S. The U.S. spends the most at 19.7% of GDP or $12,530 per person.

From 2019 to 2028, national health spending in the U.S. is expected to grow at an annual rate of 5.4% to $6.2 trillion.

How Does the Ageing Population Impact Healthcare?

The ageing global population is also a boon for healthcare stocks. There were approximately 76 million people born between 1946 and 1964 in the United States, the window for the baby boomer generation. In 2011, the first baby boomers entered retirement. Over a 19-year period, four million baby boomers will retire each year, or almost 11,000 people per day. By 2030, all baby boomers will be at least retirement age.

Canadians aged 65 and older account for around 18% of Canada’s population, up from 14% a decade ago. But they account for 45% of all public-sector healthcare spending. In the U.S., retiring baby boomers will push U.S. health spending to more than $6 trillion by 2028.

It’s not just the baby boomers that will drive innovative healthcare spending. The children of baby boomers, millennials, those born from 1981 and 1996, represent an even larger set of the population.

In Canada, millennials now account for 7.92 million, or over one-fifth of Canada’s population. In the U.S., there are more than 83 million millennials, representing more than 25% of the country’s population. In 2047, the first millennials will begin to retire. Over the following 18 years, in North America alone, 13,830 millennials will retire every day, which is expected to further increase healthcare spending.

Healthcare stocks have historically outperformed the broader markets during economic downturns. It’s important to remember that while the sector is more defensive than others, there are tailwinds that support the healthcare sector’s long-term growth.

Investing in a Healthcare ETF

Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip companies in the healthcare industry, with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. LIFE ETF is available in hedged, unhedged and USD classes, as well as mutual fund versions.

For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

NHL Expands Into the Metaverse

Posted on September 14, 2022December 18, 2023 by Veronica Carlasuc

The Metaverse, a network of interactive, 3D, virtual, augmented, and mixed reality worlds, is still in the early stages of development. But with the tech industry, various sectors, and major brands embracing the metaverse and using NFTs to monetize assets, a whole new audience is investing in metaverse platforms.

The NHL’s Los Angeles Kings partnered with Tetavi, a New Media and Technology company based in Israel, to create two videos that showed what immersive technology in the metaverse can look like. Tetavi used its proprietary machine-learning volumetric technology to record Los Angeles Kings players skating around in full gear with their mascot Bailey banging a drum.¹

The footage was shown on the arena’s video screens at a Kings’ playoff game. The video showed what volumetric capture can generate and what a fan immersing themselves in the metaverse surrounded by an army of 3D Kings players would be like.

The St. Louis Blues, meanwhile, launched the NHL’s first metaverse shopping experience. The Blues Experiential Reality is an immersive 3D locker room that serves as a showroom for the team’s merchandise.

The league itself is working with various companies on ways to watch games using Meta’s Oculus headsets and the NHL’s puck-and-player tracking technology. The league believes this is a gateway to introducing the metaverse to its captive NHL audience.

Updates on Specific Metaverse Companies

Unity Software and ironSource

Unity Software, the world’s leading platform for creating and operating interactive, real-time 3D content (like Pokemon Go), announced a merger agreement with ironSource, an Israeli-founded mobile application monetization software company.²

The combination of Unity and ironSource will form the industry’s first end-to-end platform, giving creators the tools they need to build, run, manage, grow, and monetize live games and real-time 3D content.

In addition to obvious benefits for creators, the merger also provides shareholders with significant benefits. The combined company is expected to generate a run rate of $1 billion in adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) by the end of 2024.

Synaptics and Smart Display

Synatpics Inc announced the launch of WNC’s Smart Display platform, which is powered by Synaptics VS600 series processor and the SyNAP development framework.³

The platform leverages the camera ISP, multimedia processing, display, security, and artificial intelligence (AI) capabilities that enable biometrics using face and voice identification, interactive gaming, augmented reality, and AI-assisted wellness.

The platform can be used in a variety of growing market segments, such as monitors, video conference devices, security panels, kitchen appliances, and operator assistants.

Investing in the Metaverse with MESH ETF

MESH ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month, Unity Software Inc made the largest contribution to the Fund, followed by Snap Inc and Ubisoft Entertainment SA. The largest detractors to performance for the month were NVIDIA Corp, followed by Sea Ltd., and Synaptics Inc. On the last rebalance, these securities were added to the portfolio: Take-Two Interactive Software Inc, Coinbase Global Inc, Synaptics Inc, Ubisoft Entertainment SA, and Cisco Systems Inc.

Stay updated with the latest information on investing in the metaverse and industry updates on related investment products, sign up for our weekly newsletter.

Sources:

Wyshynski, G., “What’s next for the NHL and the Metaverse?,” ESPN, August 5, 2022; https://www.espn.com/nhl/story/_/id/34346716/next-nhl-metaverse.
“Unity Announces Merger Agreement with ironSource,” Unity, July 13, 2022; https://investors.unity.com/news/news-details/2022/Unity-Announces-Merger-Agreement-with-ironSource/default.aspx.
“Synaptics and WNC Partner to Bring AI Capabilities to Smart Display,” Synaptics Incorporated, September 9, 2022; https://investor.synaptics.com/news-releases/news-release-details/synaptics-and-wnc-partner-bring-ai-capabilities-smart-display.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Supply Chain Woes Affecting the Gaming Industry

Posted on September 10, 2022November 4, 2022 by Veronica Carlasuc

It’s been rough few months for video game sales in the European markets as there’s been a shortage of consoles and a lack of new game releases.

In July, according to Game Industry.biz, sales of physical and digital video games dropped 38% year-over-year to 8.62 million units sold. The best-selling game was F1 22 and the highest charting new release was Xenoblade Chronicles 3.

As for game console sales, year-to-date sales in the European markets are down over 26%. The biggest factor creating the decline in sales is the shortage of consoles like PS5 and Xbox Series S and X. That said, Nintendo Switch sales have increased, as it has remained the most popular console in the region.

Sales of gaming accessories have also dropped. Just 8.99 million add-on products, including toys-to-life, were sold. This figure was down 9.4% compared to July of 2021. The PS5 DualSense Controller was the top accessory sold. Furthermore, only 11.6 million points cards were sold, which was down 5.9% year-over-year. The PlayStation Wallet Top-Up card continues to be the most popular points product.¹

While European video game and console sales were down, Nvidia Corp.—a high-end graphics cards maker—had some bad news for the video game industry. In its financial results, the company said that a slowdown in the gaming industry is impacting the company’s financial performance. Aside from Nvidia, other major gaming companies like Microsoft and Sony have also recently reported weaker demand and a dismal outlook.

The CFO of Nvidia, Jensen Huang, said that throughout the recent quarter, the company saw a significant decline in gaming products. Nvidia’s gaming revenue fell 44% in the most recent quarter and 33% year-over-year.²

Activision Blizzard and Microsoft’s Acquisition

Activision Blizzard, Inc., a developer and publisher of video games, was recently in the headlines as the U.K Competition and Markets Authority (CMA) said it was concerned that its acquisition by Microsoft Corp. could lessen competition in gaming consoles, multi-game subscription services, and cloud gaming services.

Not too long ago, in a letter to employees, the CEO of Activision Blizzard, Bobby Kotick, said that he expects the deal with Microsoft to go through. However, it is a long process. He said that Activision Blizzard has entered into the second phase of its review with U.K. regulators.³

Neowiz Launching New Video Game

Neowiz is an online game publisher based in South Korea. Recently, the company said that it will launch “Lies of P”, a role-playing game (RPG) based on a dark retelling of Pinocchio. This was selected as one of the most highly anticipated PlayStation games at Gamescom 2022.

According to Oh Dong-hwan, analyst at Samsung Securities, Neowiz may sell two million units of the game annually, and this could bring in a revenue of between $20 billion won and 90 billion won (between $19 million and $86 million CAD).⁴

Investing in Video Games with HERO ETF

HERO ETF PORTFOLIO STRATEGY AND ACTIVITY

For the month of August, Ubisoft Entertainment made the largest contribution to the Fund, followed by Activision Blizzard Inc. and Krafton Inc. The largest detractors to performance for the month were Nintendo Co Ltd, followed by Nexon Co Ltd., and Applovin Corp. On the last rebalance, these securities were added to the portfolio: Neowiz, Nexon Games Co Ltd., Gamania Digital Entertainment Co Ltd, Digital Bros SpA, Playstudios Inc., and Sciplay Corp. By weight, the Fund’s largest geographic exposure was to the United Sates, followed by Japan and China.

For more blogs like this, insight on investing and investment products, sign up for our weekly newsletter here.

Sources:

Drig, C, “Video game sales drop in July as release schedule dries up | European Monthly Report,” Game Industry.biz, August 12, 2022; https://www.gamesindustry.biz/video-game-sales-drop-in-july-as-release-schedule-dries-up-european-monthly-report.
Schuetz, M., “Nvidia disappoints with big miss in revenue on slump in gaming,” BNN Bloomberg, August 8, 2022; https://www.bnnbloomberg.ca/nvidia-disappoints-with-big-miss-in-revenue-on-slump-in-gaming-1.1802992.
Gelsi, S., “Activision CEO still sees Microsoft deal closing by June,” Market Watch, September 1, 2022; https://www.marketwatch.com/story/activision-ceo-still-sees-microsoft-deal-closing-by-june-2022-09-01.
“Neowiz shares fly on high expectations for Playstation label ‘Lies of P’,” Pulse, August 26, 2022; https://pulsenews.co.kr/view.php?year=2022&no=756151.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Everything You Need to Know about Stock Splits

Posted on August 31, 2022September 9, 2022 by Veronica Carlasuc

Investors love the idea of stock splits. Companies tend to split their stocks when the share price makes it difficult for retail investors to buy. If the share price of a stock gets too high, it may affect market liquidity since there are fewer investors who can afford to buy the stock.

Publicly traded companies also split their stock when they want to create more shares and make them easier to trade. Lowering the price through a stock split increases the number of outstanding shares, which can narrow the spread between the bid and ask price, giving investors a better price when they trade.

What Is an Example of a Stock Split?

When a stock split occurs, it lowers the company’s share price relative to the split. For example, if a stock is trading at $20.00 per share and a company announces a 2-for-1 stock split, the number of outstanding shares will double, and the share price will fall to $10.00 per share.

After the split, the total investment value remains the same. If an investor owned 25 shares before the split, priced at $20 each, the total value is $500. After the stock split, the investor would own 50 shares valued at the new price of $10, for a total value of $500.

A stock split doesn’t change a company’s fundamentals or make it more valuable; the company’s market capitalization will stay the same, but the number of outstanding shares will increase.

That said, a stock split can make it more affordable, which in turn, helps increase investor sentiment.

Does a Stock Split Lead to an Increase in the Share Price?

A high-flying stock can announce a stock split, which can boost demand and drive the price up. This doesn’t always happen, but stock splits are seen as a positive move by investors.

A study conducted by Nasdaq looked at stock splits by large-cap companies from 2012 to 2018. It found that just announcing a stock split increased the share price by an average of 2.5% and that increase helped the stock outperform the market by almost 5% after just one year.

Research conducted at the University of Colorado’s Leeds School of Business found that price performance of stocks that had split outperformed the market by an average of 7.93% after one year and an average of 12.15% over three years.

In May 2021, NVIDIA Corporation announced a 4-for-1 stock split to make shares “more accessible to investors and employees, thus increasing liquidity in the stock.” Between May 21, when NVIDIA made the announcement, and July 19, the date of the actual split, the company’s share price advanced 20%.

What Are Some of the Bigger Stock Splits in 2022?

This year has been a banner year with some of the biggest companies announcing stock splits. None of the stocks featured here should be taken as recommendations. These are simply examples of notable companies that have announced stock splits this year.

Tesla

Tesla Inc is the largest electric vehicle (EV) company in the world, with a market cap of $908.4 billion and global EV market share of roughly 25%. In North America, Tesla has captured more than 70% of the market share of electric vehicles. The company offers 16 models and delivered around 255,000 EVs in the second quarter of 2022.

Tesla’s first stock split was in August 2020, which was a 5-for-1 stock split. In 2020, the Tesla stock surged 695%, closing out the year at approximately $695 per share.

On August 5, 2022, Tesla announced a 3-for-1 stock split to make its shares more affordable to investors and employees. On August 25, 2022, the new adjusted stock split began trading.

Amazon

Amazon.com has been one of the biggest growth stock stories over the last two decades. Since starting out as an online bookstore in a garage in 1994, Amazon has grown into the world’s largest e-commerce store, a $1.36 trillion e-commerce juggernaut.

Through strategic developments and acquisitions Amazon has evolved into more than just an online retailer. Over the years, Amazon has acquired iRobot, the name behind the robotic vacuum Roomba, Ring, the smart doorbell company, and Blink, the smart camera and doorbell startup.

It also owns the Kindle e-reader, Fire tablets, Fire TV, Alexa, Echo, Cloud Cam, and Amazon Prime. In 2017, it acquired Whole Foods Market for $13.7 billion and spent $3.9 billion to buy primary care provider One Medical.

The company’s broad reach has helped it achieve consistently strong financial results which adds value to its share price. In March 2022, the company announced a 20-for-1 stock split.

On June 3, 2022, the day before the split went into effect, Amazon shares were trading well above $2,000. After the split, Amazon shares were revalued at $120 per share.

This is the fourth stock split Amazon has announced since it went public in 1997.

Palo Alto Networks

Palo Alto Networks Inc., one of the world’s leading cybersecurity companies, recently announced a 3-for-1 stock split on August 22. The company posted better than expected fourth quarter financial results and provided a strong forecast for the October quarter and fiscal 2023.

Palo Alto’s share price has been one of the best performing cybersecurity stocks. Since the start of 2020, the company’s share price has rallied more than 125% to around $540 per share. The sharp increase has put the Palo Alto stock out of reach for many investors.

As a result, the company declared a 3-for-1 stock split in order to make its stock more accessible to employees and a broader base of investors. Palo Alto will begin trading on a post-split basis on September 14.

Diversified Investing in Innovative Technology with EDGE ETF

Looking for a more diversified investment solution? The award-winning Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including: cloud computing, cybersecurity, egaming & esports, automobile innovation, 5G, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/ or click here.

For the latest information on investing in technology and industry updates on related investment products, sign up for our weekly newsletter.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

US High Interest Savings Account Fund Begins Trading Today on TSX

Posted on August 31, 2022August 31, 2022 by Veronica Carlasuc

TORONTO, Aug. 31, 2022 /CNW/ – Evolve Funds Group Inc. (“Evolve” or “the Manager“) is pleased to announce the launch and temporary fee reduction on a U.S. dollar savings product that offers daily liquidity and a competitive interest rate. The US High Interest Savings Account Fund (“HISU“) has closed its initial offering of units and will begin trading on the Toronto Stock Exchange (“TSX“) today under the ticker symbol: HISU.U.

Ticker	Currency
HISU.U	USD$

Effective today, the annual management fee for HISU.U will be temporarily reduced by 10 basis points (0.10%). As a result, through December 31, 2022, the annual management fee of HISU.U will be five basis points (0.05%) plus applicable sales taxes, resulting in a higher yield to investors during this period.

“HISU is a great complement to our existing cash solutions which currently have over $1.2 billion in AUM,” says Raj Lala, President and CEO at Evolve. “Cash continues to be an important component of a well-diversified portfolio. HISU will earn an attractive yield which will be calculated as the Fed upper rate + 0.20%, which currently totals 2.70%. Any future Fed rate increases will be reflected in the HISU yield.”

HISU offers investors an alternative to traditional savings instruments through daily liquidity and monthly income. HISU is a low-cost investment solution with an attractive yield that is expected to be competitive to other USD high interest savings funds. The investment objective of HISU seeks to maximize monthly income while preserving capital and liquidity by investing primarily in high interest US dollar deposit accounts.

HISU offers Unhedged ETF Units (USD$), Unhedged Class A Mutual Fund Units (USD$), Unhedged Class F Mutual Fund Units (USD$) and Unhedged Class I Mutual Fund Units (USD$).

For more information, visit https://evolveetfs.com/hisu/.

About Evolve Funds Group Inc.

With over $2.4 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing innovative ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.

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Monkeypox in North America and the Smallpox Vaccine

Posted on August 24, 2022December 18, 2023 by Veronica Carlasuc

Before April 2022, infection of the monkeypox virus in humans rarely occurred outside African regions where it is endemic. Now, in August 2022, the monkeypox virus has been discovered in more than 15 countries with more than 31,000 cases reported globally this year.¹

In early August, the U.S. declared monkeypox a public health emergency.² These declarations triggered more attention, and in the U.S., more funds and other resources to help fight the virus. There is no known treatment or cure for monkeypox, but most cases clear up on their own.³ Canada has not declared monkeypox a health emergency, but like the U.S., it is making the monkeypox vaccine available across the country.

Bavarian Nordic, a small Danish biotech firms, is the only company in the world with an approved vaccine for monkeypox. Since monkeypox is closely related to smallpox, the Centers for Disease Control and Prevention (CDC) have stated that the existing smallpox vaccines are “at least 85% effective in preventing monkeypox.”⁴

One of the leading providers of the smallpox vaccine is Sanofi SA, a French multinational pharmaceutical company that is held by the fund. It acquired Acambis back in 2008 for $546 million. Through the deal, Sanofi acquired the Acambis’ smallpox vaccine, which has a supply agreement with the U.S. government.⁵

Johnson & Johnson and Drug Sales

Johnson & Johnson said that sales of its cancer drug Darzalex and Chron’s disease drug Stelara helped it beat second quarter earnings projections. Total sales increased about three percent to $24.0 billion, with nearly half of those sales coming from outside the U.S.⁶

The company’s COVID-19 vaccine has experienced slowing demand but still managed to bring in $544 million in sales during the quarter. Johnson & Johnson’s COVID-19 vaccine was named one of Time’s best inventions of 2021.⁷

Zoetis and Animal Healthcare

Zoetis Inc. is an animal healthcare company that discovers, develops, manufactures, and commercializes medicines, vaccines, and diagnostic products in the United States and internationally. In 2021, the Fortune 500 company generated $7.8 billion in sales.⁸

Pet healthcare is a lucrative industry with U.S. pet owners spending $103.6 billion on their pets in 2020. Of that, 30% goes toward veterinary care products. Moreover, the global animal genetic testing market was valued at $990 million in 2020 and is expected to continue to experience strong growth.⁹

To that end, Zoetis recently completed the acquisition of Basepaws, a company that sells at-home DNA testing kits for cats. The acquisition advances Zoetis’ portfolio in the precision animal health space and will shape its pipeline and future targets.¹⁰

Pfizer and More Acquisitions

Pfizer Inc. continues to invest some of the cash it generated during the COVID-19 pandemic. The company recently announced it will buy Global Blood Therapeutics for around $5.4 billion. The acquisition will boost its research in rare hematology. Global Blood Therapeutics makes Oxybryta tablets for treating sickle cell disease.¹¹

The drugmaker has announced deals totaling nearly $19 billion since late 2021. In May, it announced plans to acquire Biohaven Pharmaceutical Holdings for $11.6 billion and it spent $6.7 billion to acquire Arena Pharmaceuticals.^{12, 13}

The company said it expects $25 billion in sales to come from new business developments by 2030.¹⁴

LIFE ETF: Investing in the Healthcare Industry

To stay updated with insights on investing and industry updates on related investment products, sign up for our weekly newsletter here.

Sources:

Thornhill, J.P., et al., “Monkeypox Virus Infection in Humans across 16 Countries – April-June 2022,” The New England Journal of Medicine, July 21, 2022; https://www.nejm.org/doi/full/10.1056/NEJMoa2207323.
Goodman, B., “Global experts race to understand rare cases when rare cases when monkeypox leads to death,” CNN, August 12, 2022; https://www.cnn.com/2022/08/12/health/monkeypox-deaths-research/index.html.
“WHO Director-General declares the ongoing monkeypox outbreak a Public Health Emergency of International Concern,” World Health Organization, July 23, 2022; https://www.who.int/europe/news/item/23-07-2022-who-director-general-declares-the-ongoing-monkeypox-outbreak-a-public-health-event-of-international-concern.
“Monkeypox and Smallpox Vaccine Guidance,” Centers for Disease Control and Prevention,” June 2, 2022; https://www.cdc.gov/poxvirus/monkeypox/clinicians/smallpox-vaccine.html.
“Sanofi to acquire Acambis for $546 million,” Fierce Biotech, July 25, 2008; https://www.fiercebiotech.com/biotech/sanofi-to-acquire-acambis-for-546m.
“Johnson &Johnson Reports Q2 2022 Results,” Johnson & Johnson, July 19, 2022; https://johnsonandjohnson.gcs-web.com/static-files/d02be570-de1d-4e5f-bdd6-51574d58008b.
“Johnson & Johnson COVID-19 Vaccine Named One of Time’s Best Inventions of 2021,” Johnson & Johnson, November 11, 2021; https://www.jnj.com/latest-news/johnson-johnson-covid-19-vaccine-makes-2021-times-best-inventions-list.
“Zoetis Reports Fourth Quarter and Full year 2021 Results,” Zoetia Inc., February 15, 2022; https://investor.zoetis.com/news/news-details/2022/Zoetis-Reports-Fourth-Quarter-and-Full-Year-2021-Results/default.aspx.
Bennett, N., Torres, S., Gray, P., “Exploratory content analysis of direct-to-consumer pet genomics: What is being marketed and what are consumers saying?,” PLOS, January 7, 2022; https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0261694.
“Zoetis Completes Acquisition of Basepaws, an Innovative Leader in Petcare Genetics, to Strengthen its Portfolio of Precision Animal Health Solutions,” Zoetis Inc., June 6, 2022; https://investor.zoetis.com/news/news-details/2022/Zoetis-Completes-Acquisition-of-Basepaws-an-Innovative-Leader-in-Petcare-Genetics-to-Strengthen-its-Portfolio-of-Precision-Animal-Health-Solutions/default.aspx.
Rockoff, J., “Pfizer Agrees to $5.4 Billion deal for Global Blood Therapeutics,” The Wall Street Journal, August 8, 2022; https://www.wsj.com/articles/pfizer-reaches-5-4-billion-deal-for-global-blood-therapeutics-11659954601.
“Pfizer To Acquire Biohaven Pharmaceuticals,” Biohaven Pharmaceutical Holdings Company Ltd., May 10, 2022; https://www.biohavenpharma.com/investors/news-events/press-releases/05-10-2022.
“Pfizer Completes Acquisition of Arena Pharmaceuticals,” Pfizer Inc., March 11, 2022; https://www.pfizer.com/news/press-release/press-release-detail/pfizer-completes-acquisition-arena-pharmaceuticals.
Merrill, J., “Pfizer Shopping For Deals That Will Add $25bn To 2030 Revenues,” Script, February 9, 2022; https://scrip.pharmaintelligence.informa.com/SC145863/Pfizer-Shopping-For-Deals-That-Will-Add-$25bn-To-2030-Revenues.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Growth in Cloud Remains Strong with Increased Spending on Infrastructure

Posted on August 22, 2022December 18, 2023 by Veronica Carlasuc

According to Reportlinker, a leading market research solutions firm, the global cloud computing market is expected to be valued at $405.2 billion in 2022 and grow to $1.46 trillion by 2028, at a compounded annual growth rate (CAGR) of 23.9%.

A few key factors are helping to drive this stellar growth such as favourable government policies, high-quality cloud computing vendors, and improved internet infrastructure. Many service providers are also working to provide trustworthy and cost-effective cloud-based solutions that can bypass issues like staff expenses, high electricity costs, and downtime-related issues.¹

With more reliable cloud computing solutions, the average spending on computer and storage infrastructure products has also increased. According to International Data Corporation (IDC), a provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets, spending on computer and storage infrastructure products for cloud deployments amounted to $18.3 billion, up 17.2% year-over-year in the first quarter of 2022.

The firm said that growth remains strong despite issues surrounding the supply of system components and global transport networks.

Furthermore, IDC said that dedicated cloud infrastructure spending increased to $5.9 billion—a growth rate of 20.5%—and it expects spending to surpass $90.0 billion in 2022. It also said that it expects spending on shared cloud computing infrastructure to exceed spending on non-cloud infrastructure for the first time in 2022, further proving that cloud computing is gaining in popularity and becoming a preferred solution for businesses worldwide.²

Walmart, Investing in Hybrid Cloud

On the other hand, Walmart Inc. has opted to reduce its reliance on the cloud. The company said that over the last few years, it has invested in a massive network of 10,000 edge nodes—in-house devices and servers that can process information locally—and will no longer be entirely dependent on cloud computing solutions providers.

This so-called hybrid approach allows Walmart to both rent computing power and storage from companies like Alphabet Inc.’s Google and Microsoft Corp (and switch from Google and Microsoft’s web-bases services seamlessly), while also taking control of its own computing in-house. This system is helping Walmart save up to 18% annually on cloud spending and mitigates problems that arise from outages.

More and more cloud providers are offering hybrid cloud solutions, viewing it as a profitable way to sell both their subscription services and “on-premise” infrastructure.³

Amazon, Robust Growth in AWS

Amazon.com, Inc. recently reported its financial results for the second quarter of the year. The company reported a loss per share and overall revenue came in below expectations.

However, the cloud computing unit, Amazon Web Services (AWS), showed robust growth. Revenue for AWS surged 33% year-over-year to $19.74 billion with an operating income of $5.72 billion.⁴ This helps reinforce the importance of the cloud computing business for Amazon.com, and how the demand for cloud computing continues to remain strong.

Investing in Cloud Computing with DATA ETF

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Sources:

“The cloud computing market size is expected to be valued at US$ 405,295.8 million in 2022 and reach US$ 1,465,818.2 million by 2028,” GlobeNewswire, July 20, 2022; https://www.globenewswire.com/news-release/2022/07/20/2483111/0/en/The-cloud-computing-market-size-is-expected-to-be-valued-at-US-405-295-8-million-in-2022-and-reach-US-1-465-818-2-million-by-2028.html.
Daws, R., “IDC predicts cloud infrastructure spending this year will hit $90.2B,” CloudTech, July 4, 2022; https://www.cloudcomputing-news.net/news/2022/jul/04/idc-cloud-infrastructure-spending-this-year-hit-90-2b/.
Carr, A., “Walmart Is Weaning Itself Off of Big Tech,” Bloomberg, July 12, 2022; https://www.bloomberg.com/news/newsletters/2022-07-12/walmart-cloud-weans-itself-off-of-microsoft-azure-google-cloud.
Novet, J., “Amazon says cloud-computing revenue rose 33%, topping Wall Street estimates,” CNBC, July 28, 2022; https://www.cnbc.com/2022/07/28/aws-earnings-q2-2022.html.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

AR/VR Hardware Sales Grow As Metaverse Market Expands

Posted on August 21, 2022December 18, 2023 by Veronica Carlasuc

While the metaverse is not exactly widespread yet, it is still lucrative. In 2021, total virtual real estate sales across the metaverse topped $500 million and are expected to double in 2022. By 2030, the metaverse is expected to be worth $1.6 trillion, expanding at a compound annual growth rate (CAGR) of 40%.¹

Retailers are buying property and setting up shop, developing awareness, engagement, and loyalty with early adopters. Luxury brands including Burberry, Hermes, Dolce & Gabbana, and Gucci are using NFTs to generate interest.²

Users access the metaverse through hardware such as virtual reality (VR) goggles and augmented reality (AR) glasses that are connected to the internet. Meta Platforms (formerly Facebook) is the leader in the rapidly growing VR headset market. In 2021, the company’s Quest 2 VR headset captured 78% (8.7 million units) of the entire headset market (11.2 million units).³

As the number of people venturing into the metaverse grows, so does the hardware sales. In 2021, the number of AR/VR headsets that shipped increased 92.1% year-over-year. In 2022, the number of AR/VR headsets sold is expected to reach 16.49 million. By 2026, that number is expected to soar to more than 50 million.

Snap Launched New Pocket-Sized Hardware

Snap Inc has begun offering a subscription called Snapchat+, which provides users with exclusive and early access features. Priced at $3.99 per month, this is Snap’s first attempt at generating revenue outside of advertising. The tiered membership has been rolled out in the U.S., Canada, the United Kingdom, Germany, France, Australia, New Zealand, Saudi Arabia, and the United Arab Emirates.⁴

Snap also recently launched its second piece of hardware, a small, pocket-sized drone called Pixy. Designed for taking selfies, the Pixy has a front camera that also allows users to create

videos and a button camera for navigating. Pixy comes six years after Snap launched its first hardware product, Spectacles, which are glasses that allow users to send clips without touching their phone.⁵

Roblox to Launch Samsung Space Tycoon

Roblox Inc. is being tapped by Samsung Electronics to launch its Samsung Space Tycoon. A virtual playground built inside the metaverse platform Roblox, Space Tycoon is set in the Samsung Space Station and allows visitors to create, play games, and interact using Samsung products.⁶

In addition to a global electronics company using Roblox to reach out to the next generation of consumers, the online platform is also a magnet for popular brands like Nike, and luxury brands like Gucci, Tommy Hilfiger, Ralph Lauren, and Givenchy.⁷

Roblox has a massive captive audience with 54.1 million active daily users.

Meta Shares Expectations for AR, VR, and the Metaverse

Mark Zuckerberg, CEO of Meta Platforms, has said that the metaverse could be a major source of sales in the back half of this decade. He said, “We hope to basically get to around a billion people in the metaverse doing hundreds of dollars of commerce, each buying digital goods, digital content, different things to express themselves, so whether that’s clothing for their avatar or different digital goods for their virtual home or things to decorate their virtual conference room, utilities to be able to be more productive in virtual and augmented reality and across the metaverse overall.” They plan to achieve this with the company’s virtual reality (VR) and augmented reality (AR) products.⁸

MESH ETF: Investing in Canada’s First Metaverse ETF

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Sources:

“The Global Metaverse Market in 2030 will be worth USD 1.6 trillion, having a CAGR of 38.25%,” Strategic Market Research, June 23, 2022; https://www.globenewswire.com/en/news-release/2022/06/23/2468305/0/en/The-Global-Metaverse-Market-in-2030-will-be-worth-USD-1-6-trillion-having-a-CAGR-of-38-25.html#.
Murad, A., and Smale, W., “The retailers setting up shop in the metaverse,” BBC.com, July 4, 2022; https://www.bbc.com/news/business-61979150.
Kapoor, P., “Tech Giants Bet big On Metaverse Hardware,” Entrepreneur.com, July 12, 2022; https://www.entrepreneur.com/article/431142.
“Introducing Snapchat+,” Snap Inc.., June 29, 2022; https://newsroom.snap.com/en-GB/snapchatplus.
“SPS 2022: Meet Pixy,” Snap Inc., April 28, 2022; https://newsroom.snap.com/en-GB/sps2022close.
“Samsung Unveils Experiential Virtual Playground ‘Space Tycoon’ on Roblox,” Samsung Electronics, July 12, 2022; https://news.samsung.com/global/samsung-unveils-experiential-virtual-playground-space-tycoon-on-roblox.
Bein, K., “5 Luxury brans With Explorable Space in Roblox,” Gotham.com, July 11, 2022; https://gothammag.com/ralph-lauren-gucci-nike-tommy-hilfiger-givenchy-roblox.
Novet, J., “Mark Zuckerberg envisions a billion people in the metaverse spending hundreds of dollars each,” MSNBC.com, June 22, 2022; https://www.cnbc.com/2022/06/22/mark-zuckerberg-envisions-1-billion-people-in-the-metaverse.html

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

How 8 Industries Are Shaping the Future of Technology

Posted on August 19, 2022December 18, 2023 by Veronica Carlasuc

Automobile Innovation: Automakers Managing EV Demand

A recently released Consumer Reports survey revealed that 71% of Americans showed some interest in buying or leasing an electric vehicle, with 22% saying they would “seriously consider” and 14% saying they would “definitely” buy or lease an electric vehicle. Interestingly, the survey was conducted prior to the gas price surge in the U.S. In 2020, only 4% of survey respondents said they would “definitely” consider an electric vehicle.¹

With more people interested in electric vehicles now than ever before, automakers are preparing to meet the demand. In an interview with CNBC, the CEO of Volkswagen, Herbert Diess, revealed that the company is witnessing solid demand for electric vehicles in Asia, Europe, and the U.S. Furthermore, Volkswagen is ramping up production with five new assembly plants and trying to keep delivery times short.²

Cybersecurity: Governments Taking More Action

With all the cybersecurity attacks worldwide, governments are taking cybersecurity precautions more seriously. For example, the Cyberspace Administration of China (CAC) served the country’s ride-hailing giant, Didi Global, with fines of $1.2 billion for violating China’s cybersecurity, data, and information protection laws based on how it was handling customer data.

Furthermore, the chairman and CEO of Didi Global, Cheng Wei, and the president of the company, Liu Qing, were also personally fined $147,000.³

In the U.S., the Biden administration is working tirelessly to fill thousands of cybersecurity jobs. There’s a huge talent shortage in the U.S., and it’s being dubbed as both a national security issue and an economic opportunity.

Around mid-July, the administration announced a multi-agency plan that will create hundreds of registered apprenticeship programs with private firms in an attempt to reduce the cybersecurity professional shortages as data breaches, ransomware attacks, and hacking incidents become a normal occurrence.⁴

Cloud Computing: Infrastructure Spending Is Increasing

According to International Data Corporation (IDC), a provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets, spending on computer and storage infrastructure products for cloud deployments amounted to $18.3 billion, up 17.2% year-over-year in the first quarter of 2022.

The firm said that growth remains strong despite issues surrounding the supply of system components and global transport networks.

E-Gaming: Sony Moving Beyond PlayStation

Sony Interactive Entertainment, maker of PlayStation, continues to make solid strides to increase its footprint in the video game market beyond just consoles. Recently, the company announced that it is acquiring Repeat.gg, one of the biggest e-gaming tournament platforms in the world. Repeat.gg allows users to compete for cash prizes across online games in asynchronous esports tournaments.

Since its inception, Repeat.gg has hosted over 100,000 tournaments that had more than 2.3 million participants.

The acquisition will give Repeat.gg more resources, game titles, and technology that could help the company grow significantly in the next couple of years.⁶

5G: Sending Audio Faster Than Speed of Sound

T-Mobile recently announced that it was able to send audio faster than the speed of sound. Mixhalo, one of the startups in T-Mobile’s 5G Open Innovation Lab, used T-Mobile’s 5G network to send musician audio directly to smartphones faster than it would take to send the music to the audience’s ears via speakers.

The startup’s technology is able to send audio over Wi-Fi and cellular networks, and it could be more reliable on 5G networks. The technology is also interesting because next-generation mobile networks haven’t been able to improve events, although they have certainly increased signal speeds in sports stadiums.⁷

Robotics Automation: Meta’s Sphere Scanning Tool

Meta Platforms recently announced an AI-powered tool called Sphere. This tool is focused on tackling rampant misinformation online. Sphere can automatically scan hundreds of thousands of citations at once and check for factual errors.

According to Meta’s research team, Sphere’s dataset includes 134 million public webpages. Furthermore, the company said that Sphere is already scanning pages on Wikipedia to test its ability to flag sources that don’t support the claims made. If a questionable source is found, the AI tool can recommend using a stronger source to improve accuracy of the claims made.⁸

Fintech: CIBC’s Data Access Agreement with MX

Recently, the Canadian Imperial Bank of Commerce (CIBC) entered into a data access agreement with Utah-based Fintech firm MX to let its clients share financial information.

CIBC said that by using MX’s application program interface (API) technology, its 11 million clients will no longer need to share banking credentials to connect their banking information with third-party applications for personal financial management, budget tracking, and credit-building tools.

In June, Royal Bank of Canada (RBC) entered a similar agreement with Yodlee and Plaid—two Fintech firms. Meanwhile, the Toronto-Dominion Bank (TD) has been working with Fincity since 2020.⁹

Genomics: Shaping Animal Healthcare

Zoetis, an animal healthcare company that discovers, develops, manufactures, and commercializes medicines, vaccines, and diagnostic products in the United States and internationally, recently completed the acquisition of Basepaws, a company that sells at-home DNA testing kits for cats. The acquisition advances Zoetis’ portfolio in the precision animal health space and will shape its pipeline and future targets.¹¹

Investing in Disruptive Innovation with EDGE ETF

Looking for a more diversified investment solution? The Evolve Innovation Index Fund (EDGE ETF) is an 8-in-1 innovation fund that invests in disruptive innovation themes across a broad range of industries, including cloud computing, cybersecurity, egaming & esports, automobile innovation, 5g, fintech, genomics, and robotics & automation. For more information on EDGE ETF, visit our website at https://evolveetfs.com/edge/ or click here.

For more blogs like this, insight on investing, and updates on related investment products, sign up for our weekly newsletter here.

Sources:

Edelstein, S., “Survey: Even before the gas price surge, 71% of Americans would consider and EV,” Green Car Reports, July 8, 2022; https://www.greencarreports.com/news/1136414_survey-before-gas-price-71-percent-americans-consider-ev.
Frangoul, A. “Volkswagen CEO says EV outlook is ‘very good,’ expects to reduce delivery times this year,” CNBC, July 7, 2022; https://www.cnbc.com/2022/07/07/hineseen-ceo-says-ev-outlook-is-very-good.html.
Xiong, Y., Register, L., and He, L., “China fines Didi $1.2 billion for violating cybersecurity and data laws,” CNN, July 21, 2022; https://www.cnn.com/2022/07/21/economy/china-fines-didi-data-law-violation-intl-hnk/index.html.
Fung, B. “Biden administration pushes to close the growing cybersecurity workforce gap,” CNN, July 19, 2022; https://www.cnn.com/2022/07/19/tech/biden-cyber-workforce-gap/index.html.
Daws, R., “IDC predicts cloud infrastructure spending this year will hit $90.2B,” CloudTech, July 4, 2022; https://www.cloudcomputing-news.net/news/2022/jul/04/idc-cloud-infrastructure-spending-this-year-hit-90-2b/.
Bankhurst, A., “PlayStation Acquires Esports Platform Repeat.gg,” IGN, July 18,2022; https://www.ign.com/articles/playstation-acquires-esports-platform-repeatgg.
Lumb, D., “T-Mobile’s 5G Network Could Soon Send Live Concert Audio to Your Phone,” CNET, July 15, 2022; https://www.cnet.com/tech/mobile/t-mobiles-5g-network-could-soon-send-live-concert-audio-to-your-phone/.
Huddleston Jr., T., “Meta has a new AI tool to fight misinformation—and it’s using Wikipedia to train itself,” CNBC, July 20, 2022; https://www.cnbc.com/2022/07/13/meta-wikipedia-want-to-fight-misinformation-with-new-ai-tool-sphere.html.
Alcaraz, C., “CIBC Latest Big Six Bank To Partner With A Fintech On Private Open Banking API,” betakit, August 8, 2022; https://betakit.com/cibc-latest-big-six-bank-to-partner-with-a-fintech-on-private-open-banking-api/.
Bennett, N., Torres, S., Gray, P., “Exploratory content analysis of direct-to-consumer pet genomics: What is being marketed and what are consumers saying?,” PLOS, January 7, 2022; https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0261694.
“Zoetis Completes Acquisition of Basepaws, an Innovative Leader in Petcare Genetics, to Strengthen its Portfolio of Precision Animal Health Solutions,” Zoetis Inc., June 6, 2022; https://investor.zoetis.com/news/news-details/2022/Zoetis-Completes-Acquisition-of-Basepaws-an-Innovative-Leader-in-Petcare-Genetics-to-Strengthen-its-Portfolio-of-Precision-Animal-Health-Solutions/default.aspx.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Everything You Need to Know about the Ethereum Merge

Posted on August 17, 2022August 19, 2022 by Veronica Carlasuc

Cryptocurrency investors are known for being enthusiastic and devoted to their preferred crypto. But right now, there is even greater excitement in the crypto market as the Ethereum Merge draws closer.

Ether, the token attached to the Ethereum blockchain network, has, as of this writing, rallied 12.5% over the last week and has more than doubled since its June lows of $880. Why the excitement? Ether, the world’s second-largest token, recently passed its last test merge (Goerli) before a major upgrade that is scheduled for around September 15.

The highly anticipated software upgrade of the Ethereum blockchain, known as The Merge, is expected to have a huge impact on the cryptocurrency market.

What Is The Merge?

Ethereum has been working on making big upgrades to its system for about seven years, which is around the time it was created in 2015 by one-time University of Waterloo student Vitalik Buterin.

The Merge is the biggest upgrade in the history of Ethereum and represents a major transition in how Ether tokens are minted and transactions are validated. “The Merge” refers to when the current proof-of-work (PoW) Ethereum protocol will “merge” with the Beacon Chain proof-of-stake (PoS) blockchain system and continue as PoS.

Under PoW, miners solve complex computer problems to win rewards. The first miner to solve the puzzle receives newly minted tokens and transaction fees paid by users of the network. In contrast, PoS works on a consensus method. That means that validators “stake” their coins as collateral to validate transactions and create new blocks. In return, the validator is rewarded a fixed percentage of the pledged assets when a new block of ether is added to the blockchain. This is unique because staking allows investors to generate a yield by putting their token up for collateral. To be a validator a user needs to stake at least 32 ether ($59,968) to be eligible. Many argue this democratizes participation by reducing the large capital expenditures in hardware and significant electricity required for PoW. With PoS anyone with a computer and 32 ether can technically be a miner.

The Merge will also set the stage for more upgrades that will improve Ethereum’s scalability. With the rise in popularity of DeFi and NFTs, the Ethereum network has had significant spikes in gas fees making it costly for users to transact on the blockchain.

Currently, Ethereum has a low rate of Transactions Per Second (TPS), thus reducing mainstream adoption. One scaling upgrade to combat this issue is the concept of sharding. Sharding will split the Ethereum’s network into more pieces (“shards”) to improve its capacity. Some experts predict this upgrade could increase Ethereum’s TPS from ~10 to 100,000.

The excitement around The Merge has resulted in a rally in Ether (the token), as many investors believe the upgrades will increase usage and mainstream adoption.

Investing in Cryptocurrency with Evolve ETFs

Deciding which cryptocurrency to own and how much to allocate can be overwhelming for many investors. The Evolve Cryptocurrencies ETF (TSX: ETC) is Canada’s first multi-cryptocurrency ETF. ETC is designed to be a one ticket solution to cryptocurrency exposure. It is market cap weighted and rebalanced monthly. It currently holds Bitcoin (TSX: EBIT) and Ether (TSX: ETHR) but as regulators approve other crypto ETFs, they may be added as well. For more information on ETC, visit https://evolveetfs.com/etc/.

If you’re looking for crypto specific ETF investment options, Bitcoin ETF (TSX: EBIT) and Ether ETF (TSX: ETHR) offer a great way to access the price of bitcoin and ether respectively. For more information, visit the fund pages here:  https://evolveetfs.com/product/ebit/; https://evolveetfs.com/product/ethr/

To stay updated with insights on investing in crypto and updates on related investment products, sign up for our weekly newsletter here.

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.