The ALPS Disruptive Technologies ETF (DTEC) rallied 1.57% last week as growth stocks were propelled by a weakening economic outlook, creating optimism that Fed-driven rate hikes could ease.
Seven of the ten disruptive technology themes in DTEC rallied 100 basis points or more last week, as investors reengaged positions on disruptive stock stories that could outgrow the market over the next few years, ALPS wrote in an October 10 insight.
Each disruptive technology theme included in DTEC is equally-weighted. Last week, Mobile Payments (10.07% weight as of October 7) and Healthcare Innovation (10.15% weight as of October 7) led the fund’s returns.
Healthcare Innovation holding, Dexcom Inc. (DXCM US, 1.23% weight as of October 7), jumped nearly 27% following the Center for Medicare and Medicaid Services (CMS) proposing to expand coverage of continuous glucose monitoring (CGM) devices, which analysts expect to double Dexcom’s market opportunity for its CGM device, ALPS wrote.
Mobile payment providers Pagseguro Digital Ltd (PAGS US, 1.15% weight as of October 7) and GMO Payment Gateway Inc. (3769 JP, 1.12% weight as of October 7) each gained over 10% last week in a follow-through rally for the space after another private equity buyout of an industry competitor was announced last week at a substantial premium, according to ALPS.
Adopting disruptive technologies has become the mainstay solution for companies to better compete and countries to better survive the increasingly unpredictable future.
“From the global pandemic to the Russia/Ukraine war, to the increasing deglobalization of the world, we believe innovation and disruption are what will protect a company’s competitive advantage, a country’s national security, and the world’s changing climate going forward, which is why DTEC diversifies across ten disruptive technology themes set to help solve these precarious dynamics,” ALPS wrote.
Cybersecurity, in particular, is becoming ever more crucial to national security and corporations as cyber warfare becomes a vital part of any proxy war. Advances in cybersecurity, AI, cloud computing, IoT, mobile payments, fintech, data & analytics, and even clean energy security will likely continue to be based around protecting and growing any country’s or company’s self-interests, ALPS wrote.
Other funds that offer exposure to technology equities include the ProShares S&P Technology Dividend Aristocrats ETF (TDV), the First Trust NASDAQTechnology Dividend Index Fund (TDIV), and the BlueStar Israel Technology ETF (ITEQ).
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