With disruptive technologies emerging and permeating our daily lives on a regular basis, investors can find it dizzying to hone in on the right concepts. The ALPS Disruptive Technologies ETF (DTEC) is one ETF that solves that conundrum because it offers broad exposure to 10 themes dramatically reshaping the technological landscape.
DTEC tracks the Indxx Disruptive Technologies Index, which identifies companies using disruptive technologies across ten thematic areas, including Healthcare Innovation, Internet of Things, Clean Energy and Smart Grid, Cloud Computing, Data and Analytics, FinTech, Robotics, and Artificial Intelligence, Cybersecurity, 3D Printing, and Mobile Payments.
Several DTEC themes are at the precipice of major growth. Those include cloud computing, fintech and 3D printing, among others.
Cloud computing is the ability to deliver enterprise-level solutions on demand, through a simple internet connection. The “cloud” refers to the aggregation of information online that can be accessed from anywhere, on any device. Cloud companies provide on-demand services to a centralized pool of information technology (IT) resources via a network connection.
Already more than a $200 billion industry, cloud could control more than 80% of the global software market by 2030.
3D Printing, Fintech Power DTEC, Too
Technological disruption isn’t just disruptive. It can be destructive and creative. Destruction in the form of old technologies going by the wayside while new capabilities emerge, giving investors opportunities to profit along the way.Just look at fintech, which is disrupting to old guard banking business model. Fintech purveyors are companies powered by innovations and are working to disintermediate or bypass the current financial markets and challenge traditional institutions by offering new solutions that are better, cheaper, faster, and more novel and secure. Then there are digital wallets such as Cash App and Venmo, which are major fintech growth frontiers.
“Fuel for the Cash App fire is another often overlooked catalyst: the unbanked. Not everyone banks at a traditional venue, like a Bank of America or Wells Fargo. For any number of reasons, millions of American’s don’t use such standard institutions and many of them count on Cash App as their bank of choice,” according to Nasdaq.
As for DTEC’s 3D printing exposure, that’s important because some of these companies are the corner of dramatic shifts in industries such as defense and healthcare.
Other disruptive funds in the space include The 3D Printing ETF (PRNT), which seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Total 3D-Printing Index, which is designed to track the price movements of stocks of companies involved in the 3D printing industry.
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.