Bet On BlackRock's Megatrends With These ETFs
Zacks Investment Research | Jun 14, 2019 01:00AM ET
Gone are of the days of plain vanilla ETFs. The trend of launching thematic and niche ETFs is palpable. Issuers are tapping concepts that are emerging and have strength of stay longer in the investment world.
BlackRock (NYSE:BLK) has pointed out five megatrends that are here to stay. The trends include technological breakthrough, climate change & resource scarcity, rapid urbanisation and shifting economic power. Investors can very well cash in on these themes by investing in the related ETFs. Below we highlight a few ETFs from each category.
Technological Breakthrough
The fundamentals of the technology sector are pretty strong. Rising enterprise spending and emerging technologies like cloud computing, artificial intelligence and big data are acting as catalysts for the tech sector. Global spending on technologies and services to shift companies to the digital age are expected to reach $1.8 trillion by 2021, per data from International Data Corp (read: Tech Stocks Log Seven-Year Best Spell: ETF Winners ).
BlackRock quotes mckinsey’s data, per which about “two-thirds of all occupations could see a third or more of their constituent activities automated.” No wonder, there will be a strong lineup for high-tech ETFs.
BlackRock itself has iShares Cybersecurity and Tech ETF Here's Why You Should Invest in Robotics ETFs ).
Climate Change & Resource Scarcity
Global warming is one of the biggest challenges facing us. BlackRock highlighted cause job losses, recessions and even a tumbling stock market” according to economists.
So, a global effort will be put in to end the fossil fuel era. iShares MSCI ACWI Low Carbon Target (NYSE:TGT) ETF Forget Trump Budget, 5 Green ETFs Crushing the Market ).
Demographic & Social Change
BlackRock noted that “by 2050 a third of the population of 55 countries per un.org . Advanced medical treatment and societal changes will also cause the world to have more aged population over time.
BlackRock has a product called iShares Ageing Population UCITS ETF (LNGR , which bets on companies that somehow contribute to increase human life span.
Rapid Urbanisation
“Two-thirds of the world’s population will live in urban areas by 2050. In 1950, only 30% lived in urban areas” per BlackRock. Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares IYR ) and iShares Residential Real Estate ETF (ASX:REZ) should be prime beneficiaries.
Since urbanisation needs more industrial metals like copper, iPath Series B Bloomberg Copper Subindex Total Return ETN COPX should benefit from the trend.
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Together, India, China and Nigeria will form Why These Chinese Sector ETFs Are Crushing S&P 500 in 2019 ).
Shifting Economic Power
There could be gradual strengthening in some emerging economies. China is likely to take the title of the new global superpower by 2030 with India giving competition to the United States by 2050. So, iShares China Large-Cap ETF ( (TE:FXI) ) andiShares India 50 ETF ( (JK:INDY) ) are good bets in this regard.
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