Building Wealth Whatever trend you want to invest in, there's probably a fund for that...
Let's say you want to profit from the way millennials spend their money... Instead of buying individual stocks that cater to younger people, all you have to do is buy the Global X Millennials Thematic Fund (MILN).
With one click, you can profit from the love affair that millennials have with shopping online, playing video games, and doing everything on their smartphones. This exchange-traded fund's ("ETF") holdings include Amazon (AMZN), PayPal (PYPL), Activision Blizzard (ATVI), and Spotify (SPOT).
The fund also holds companies that are uniquely positioned to profit from millennial trends. Take SLM (SLM), better known as Sallie Mae. SLM originates and services loans to students. With the millennial cohort buried in student debt, SLM makes perfect sense for a fund like MILN.
The ETF world is quick to create a fund for any type of trend or anything else that may draw interest...
Another famous example was the Obesity Fund, which traded under the ticker SLIM. Investors could buy a basket of companies that profited as more Americans struggled with their sizes, such as Weight Watchers parent company WW International (WW) and Tandem Diabetes Care (TNDM).
The fund was liquidated and terminated in March, but it was actually quite successful – up roughly 40% since its launch in 2016.
You can even find an ETF based on Catholic values...
The Global X S&P 500 Catholic Values Fund (CATH) holds companies whose business practices follow the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops ("USCCB").
The fund has holdings of Microsoft (MSFT), Apple (AAPL), Amazon, and Facebook (FB) – and in large amounts. (We're not sure as to their biblical bona fides.)
And not surprisingly, the fund has a beta of 0.99 with the S&P 500 – meaning it's just about the same as the broad index. (Makes you wonder...)
As funds pop up to serve any conceivable trend, it should come as no surprise that new ETFs are in the works today...
The coronavirus pandemic has upended society. Many of our behaviors and habits will likely change for the foreseeable future.
One of the most talked-about coronavirus changes is where we will work in the future. The number of people "working from home" has exploded out of necessity.
Companies around the world are trying to cope with staffs scattered from their offices. As we write today, the members of the Health & Wealth Bulletin team are among the millions of people who are newly working from their homes.
Working remotely has sparked fresh demand for certain products... And ETF company Direxion rushed to take advantage of the trend. In late June, it launched a work-from-home ETF, the Direxion Work From Home Fund (WFH).
WFH holds stocks that serve work from home workers... Stocks you'd expect like Zoom Video Communications (ZM) and software stocks like Twilio (TWLO) and Okta (OKTA).
In fact, many of the holdings of WFH are software stocks. Given everything that has happened in the economy, they've by far been the hottest stocks over the past few months. And they could very well continue to be...
Although the economy has made a lot of progress reopening, we don't think working from home is going to be a passing fad. It's here to stay. Employees are getting used to it.
And many managers are realizing that it can be more profitable – and just as efficient – to have their employees work from home instead of renting out office space for them.
The companies that have been best positioned to take advantage of the work from home craze are Software as a Service ("SaaS") companies. SaaS is simply software that's hosted through the web, rather than an installed application.
Put simply, SaaS has changed everything...
Almost overnight, nearly every company in America had the choice to stop paying the exorbitant costs of in-house information technology systems.
What used to cost millions of dollars to install and maintain, now costs a few hundred dollars or less per employee. Meaning it pays for itself in months, rather than years. And that software, once available only to huge companies, is now accessible to everyone.
If you haven't profited from SaaS stocks just yet, there's still time.
My colleague and industry expert Bryan Beach thinks this boom is just the beginning.
Bryan and his team have found three tiny, essentially "hidden" opportunities in the SaaS sector which are in a position for tremendous growth as they take more market share. They've all got multibagger potential. And Bryan believes one of them could earn up to 3,000% in the years to come...
This rare opportunity is a tiny firm whose clients are some of the biggest and most powerful companies in the world. And it's backed by a software giant 100 times its size.
Most important, this little company's main product has no competitors. In just a few short years, Bryan believes this stock could easily be worth eight to 10 times today's share price. And even more, over the long term.
What We're Reading...
- Tech companies will now cut pay for working fleeing Silicon Valley.
- Direxion Launches Work From Home ETF.
- Something different: Malaysian man 'finds' monkey selfies on lost phone.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
September 16, 2020