Capture Ten Megatrends in One Disruptive ETF

Whether it’s cloud computing, cybersecurity, healthcare innovation, or online retail, an array of megatrends are changing how companies do businesses, how consumers shop, and how patients receive care.

These trends were at play prior to the coronavirus pandemic, but the global health crisis only accelerated the timeline under which some new technologies and concepts are being adopted. All that may sound dizzying, but investors can efficiently tap into the range of emerging themes with the ALPS Disruptive Technologies ETF (CBOE: DTEC).

DTEC provides exposure to 10 booming themes while giving investors the added advantage of not needing to stock-pick in what can be some complex arenas. Healthcare innovation in particular is providing a compelling runway for long-term growth.

“On the demand side, spending on healthcare relative to GDP has been growing on the back of ageing and increasingly unhealthy populations, as well as rising incomes in the emerging economies. Innovation is driving demand by creating new markets for previously untreatable conditions,” according to BNP Paribas research.

DTEC 1 Year Performance

The Growth of Telework and Renewable Energy

Another mega-shift jumpstarted by the pandemic is working from home. While employees and investors are hearing plenty about some companies mandating workers return to the office on the old-school five-day-a-week schedule, other employers are allowing staffers to continue working remotely while others are going to hybrid models, splitting the difference between home and office.

“The pandemic has accelerated two themes: teleworking and telemigration,” adds BNP Paribas. “Attitudes to teleworking have shifted. Companies have realised that they can get more hours from their employees while economising on expensive city centre rents. Workers have seen that they can save both the cost and the time of commuting, while having more flexibility about when and where they work. This looks like a win-win.”

Increased teleworking is relevant to DTEC investors because working from home requires more cybersecurity and dependence on cloud computing. Those two themes combine for over 20% of DTEC’s weight. Yet DTEC has even more sources of allure, including renewable energy exposure.

“To accelerate the shift to renewables, we need further innovation in technologies such as long-duration battery storage. In addition, low-carbon electricity will need to penetrate as many sectors as possible through electrification,” continues BNP Paribas.

Clean energy and smart grid stocks represent almost 11% of DTEC’s roster.

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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.