
While explaining where he would invest his money, Anthony Ginsberg, manager of the HAN-GINS Tech Megatrend Equal Weight UCITS ETF, highlights three technology stocks
The goal of our exchange-traded fund (ETF) is to invest in the top 120 technology companies worldwide. Social media, cloud computing, artificial intelligence and robotics, cybersecurity, digital entertainment, blockchain, genomics, and future automobiles are the eight main subthemes that we give equal weight to. It is challenging to predict the cycles of different tech sectors, and the winners vary annually. We try to prevent over-concentration in the US and the "Magnificent Seven" by giving each subtheme's top 15 world leaders an equal weight. This helps to lower volatility and risk and makes the ETF a truly global play. Three ETF stocks that have captured our interest are examined below.
Netflix is a streaming business that will succeed.
When it comes to digital entertainment, people are still interested in Netflix (Nasdaq: NFLX). As the company has aggressively expanded its global presence and subscriber base, the stock has increased by 35% this year.
Efforts to stop password sharing, which is thought to have cost Netflix billions in lost revenue over the years, have also been stepped up. Stricter account-sharing guidelines and new pricing tiers for more users are two ways Netflix is opening up a new revenue stream without appreciably raising the price of its content.
Additionally, Netflix is expanding its presence in the online gaming industry. This diversification could strengthen the recurring revenue model by increasing user engagement if it is successful.
Considering how the spread of cloud computing and AI tools has significantly increased the range of potential threats, cybersecurity is another relevant topic. The US government is increasing its outsourcing to cybersecurity companies in an effort to prevent remote hacking, and Congress is probably going to enact legislation in this regard.
A major player in cloud-based cybersecurity, Zscaler (Nasdaq: ZS), has seen a 53 percent increase in stock price this year as a result of the increased demand for digital protection. Real-time, zero-trust security is provided by Zscaler, which has been successful in protecting intricate digital networks and remote work settings.
Strong operational execution and demand for the company's services were demonstrated by the latest quarterly earnings, which increased by 23% year over year. Investors looking to gain exposure to digital infrastructure are increasingly choosing Zscaler as a core holding due to its strong innovation pipeline and high customer retention rates.
The rise in EVs has drawn our attention to BYD (Hong Kong: 1211), the biggest EV manufacturer in the world and one that was supported by Warren Buffett more than ten years ago. By outselling its US competitor in the fourth quarter of 2023, BYD overtook Tesla as the leading EV manufacturer worldwide. Middle-class buyers in emerging markets find BYD's cars appealing because they are typically less expensive than Teslas.
BYD's vertically integrated business strategy, which includes vehicle assembly, semiconductor supply, and battery manufacturing, is the foundation of its success.
Beyond consumers' automobiles, BYD's battery technology is proving to be beneficial. London's next-generation electric double-decker bus, the BD11, is powered by the UK's cutting-edge lithium-iron phosphate (LFP) batteries.
These buses are perfect for negotiating the city's winding streets because of their hub motors, which enable an incredibly small eight-meter turning radius. BYD continues to be an important player to keep an eye on thanks to its global expansion, government partnerships, and growing EV adoption globally.
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