Innovation and technology are rapidly changing the way business is conducted, how travelers get from Point A to Point B, how shoppers shop and how healthcare is provided, among other points. A growing number of ETFs emphasize those concepts, including the SPDR S&P Kensho New Economies Composite ETF (NYSEArca: KOMP).
KOMP seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Kensho New Economies Composite Index.
KOMP’s underlying index “is designed to capture companies whose products and services are driving innovation and transforming the global economy through the use of existing and emerging technologies, and rapid developments in robotics, automation, artificial intelligence, connectedness and processing power,” according to State Street.
Touches a Lot of Bases
KOMP holds 386 stocks, giving it a deep bench relative to comparable funds. The fund is home to some familiar disruptive names, such as Tesla (NASDAQ: TSLA), Nvidia (NASDAQ: NVDA) and Apple (NASDAQ: AAPL).
Investors are always on the lookout for long-term growth opportunities, but now more than ever, it seems prescient to look beyond the immediate noise of the socioeconomic and political headlines and find investment opportunities for the long-haul. Emerging technologies may offer that growth, according to some experts.
Roughly three dozen industries are represented in KOMP, again a massive number relative to rival strategies. Many touch the fast-growing automation market.
Automation software is now able to connect the entire manufacturing process from project creation to equipment maintenance. Enabling industrial equipment to sync with management software gives managers the ability to make decisions quicker and more efficiently to ultimately produce a better result for the business.
Disruptive forces are among us irrespective of which sector one chooses to focus on, and the impact of technology, such as robotics, is just barely scratching the surface. This gives ETF investors the opportunity to jump in on disruptive-focused funds that delve into technology that is transformative.
What bodes well for KOMP as a long-term idea is rapidly increasing adoption of concepts such as artificial intelligence, automation, machine learning, and robotics, just to name a few.
Implementing technology like artificial intelligence (AI) and machine learning can allow businesses to reap major benefits, but it’s not a simple one-size-fits-all solution. In additional engineers and business executives must also be able to learn about the technology itself.
For more on disruptive technologies, visit our Disruptive Technology Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.