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The Next Big Theme: October 2020

Oct 16, 2020

View all Pedro Palandrani's ArticlesPedro PalandraniPedro Palandrani

The Next Big Theme: Thematic Newsletter Global X ETFs

Electric Vehicles

Tesla Goes Tabless

At Tesla’s 2020 Annual Shareholder Meeting and Battery Day, CEO Elon Musk announced that the company would begin manufacturing a new “tabless” battery design. The new battery design is larger and potentially more efficient that existing batteries, offering six times more power and 16% more range. What’s notable for consumers is that, according to Musk, these batteries could reduce costs by 14% per kWh, bringing the price of a Tesla closer to that of similar internal combustion engine (ICE) vehicles. Tesla also plans to enter the lithium industry as a vertically integrated battery and EV manufacturer. As battery-grade lithium may become undersupplied in the future, this initiative could support Tesla’s ambitions to scale EV output.1 Catering to affordability, Tesla also announced its goal for developing a $25,000 car, which would allow EVs to compete in the mass market vehicle category.2

Genomics

A Covid Test With Your Boarding Pass

To make passengers feel safe and help get them back flying again, some airlines started offering pre-flight COVID-19 testing for passengers. United Airlines started the movement and Hawaiian Airlines, JetBlue Airways, and American Airlines followed suit. Pre-flight testing could also allow travelers who test negative to limit or skip quarantine restrictions altogether at their destination.3 United rolled out testing on its San Francisco to Hawaii route, giving passengers the option to take a test at the airport or request a mail-in test several days before departure. Passengers must cover the cost of the test. Currently, a rapid in-airport test costs $250, and a mail-in test costs $80.4

Robotics & E-Commerce

New Colleagues: Robots and Humans

Autonomous forklift and robot-powered vehicle maker Seegrid Corp. secured $52 million in financing from Silicon Valley investors who see the company as poised for growth during the COVID era. Seegrid expects to scale operations as a surge in e-commerce has increased the importance of efficient warehouses. In August, warehousing and storage employment totaled a record high of 1.22 million workers.5 These warehouse jobs have been vital in helping to offset jobs lost during the pandemic.

Artificial Intelligence & Robotics

Toyota Lends the Elderly a Helping Hand

Researchers at Toyota experiment with initial prototypes of robots using machine learning to alleviate household chores. The cleaning robots currently live inside a mock home located at the Toyota Research Institute in Los Altos, California. A method used by the researchers to maximize space at home includes some of the robots even being attached to the ceiling.6 These household improvements could be considered the next step in the same niche category as Google’s smart home launch in 2016. Toyota hopes the product will not only aid elderly people around the house, but also eventually offer companionship. The expectation lies in expertise in car manufacturing being parlayed into more advanced robotics for homes and workplaces by Toyota.

Cloud Computing

Software’s Record-Breaking Public Debuts

The initial public offering (IPO) wave in the cloud computing industry continues. Cloud data warehousing company Snowflake (SNOW) recently recorded the largest software IPO ever. After pricing its IPO at $120, the price surged above $300 after listing, a 150% gain. The IPO brought the company nearly $3.4 billion after selling 28 million shares.7 Unity Software (U), a leading platform for video game developers, saw its shares jump 44% after going public on the NYSE at $75 per share.8 Asana (ASAN), a task management app, priced shares at $27 during the stock’s direct listing, higher than the NYSE’s reference price of $21. Similarly, shares of big data analytics specialist Palantir (PLTR) were 50% higher than their reference price about 30 minutes into trading.9

Health & Wellness

Technology Does a Body Good

Singapore recently partnered with Apple to launch a two-year health initiative called LumiHealth. The first-of-its-kind program intends to help Singaporeans improve their quality of life. As part of the voluntary app-based initiative, which includes personalized coaching, participants receive rewards for healthy activities and behaviors tracked on their Apple Watch. Rewards can total up to S$380 over the course of the program. Using technology to promote health continues a trend for both Singapore and Apple. Singapore was the first to release contact tracing in an effort to eradicate COVID-19. And last year, Apple collaborated with Stanford Medicine for the Apple Heart Study app, which uses data from Apple Watch to identify heat irregularities.10

THE NUMBERS

The following charts examine returns and sales growth expectations by theme, based on their corresponding ETFs.

 

INTRO TO THEMATIC INVESTING COURSE – ELIGIBLE FOR CE CREDIT

Global X has developed an interactive, self-guided Intro to Thematic Investing course, that is designed to share the latest ideas and best practices for incorporating thematic investing into a portfolio.

This program has been accepted for 1.0 hour of CE credit towards the CFP®, CIMA®, CIMC®, CPWA® or RMA certifications. To receive credit, course takers must submit accurate and complete information on the requested forms, complete the entire course, and receive a 70% or higher on the Intro to Thematic Investing Quiz.

For Canadian course takers: This program has been reviewed by FP Canada and qualifies for 1 FP Canada-Approved CE Credit, in the category of Product Knowledge, towards the CFP® certification or QAFP™ certification. To receive credit, course takers must submit accurate and complete information (including Job Title) on the requested forms, complete the entire course, and receive a 70% or higher on the Intro to Thematic Investing Quiz.

Questions on receiving CE credit may be sent to: Education@globalxetfs.com

KEEP UP WITH THE LATEST RESEARCH FROM GLOBAL X

To learn more about the disruptive themes changing our world, read the latest research from Global X, including:

ETF HOLDINGS AND PERFORMANCE:

To see individual ETF holdings and current performance across the Global X Thematic Growth Suite, click the below links:

Multi-Theme: Global X Thematic Growth ETF (GXTG)

Category: Articles

Topics: Consumer Economy, Disruptive Technology, Infrastructure Development, Technology

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Investing involves risk, including the possible loss of principal. There is no guarantee the strategies discussed will be successful. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments may be subject to higher volatility. The funds are non-diversified.

 

Information Technology companies can be affected by rapid product obsolescence, and intense industry competition. Risks include disruption in service caused by hardware or software failure; interruptions or delays in service by third-parties; security breaches involving certain private, sensitive, proprietary and confidential information managed and transmitted; and privacy concerns and laws, evolving Internet regulation and other foreign or domestic regulations that may limit or otherwise affect the operations. Healthcare, Pharmaceutical, Biotechnology and Medical Device companies can be affected by government regulations, expiring patents, rapid product obsolescence, and intense industry competition. Investments in the consumer discretionary and retailing industries are subject to risks such as changes in domestic and international economies, interest rates, competition and consumer confidence; disposable household income; consumer tastes and preferences; intense competition; changing demographics; marketing and public perception; and dependence on third-party suppliers and distribution systems. Cybersecurity Companies are subject to risks associated with additional regulatory oversight with regard to privacy/cybersecurity concerns. The risks related to investing social media companies include disruption in service caused by hardware or software failure, interruptions or delays in service by third-parties, security breaches involving certain private, sensitive, proprietary and confidential information managed and transmitted by social media companies, and privacy concerns and laws, evolving Internet regulation and other foreign or domestic regulations that may limit or otherwise affect the operations of such companies.

Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds’ summary or full prospectus, which may be obtained by calling 1.888.493.8631, or by visiting globalxetfs.com. Please read the prospectus carefully before investing.

Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC or Mirae Asset Global Investments. Global X Funds are not sponsored, endorsed, issued, sold or promoted by Solactive AG, nor does Solactive AG make any representations regarding the advisability of investing in the Global X Funds. Neither SIDCO, Global X nor Mirae Asset Global Investments are affiliated with Solactive AG.

Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.