We now drive electric cars, watch our favorite shows on mobile devices, attend concerts via virtual reality and control the temperature in our homes by giving instructions to a voice assistant.
Technological innovations like these underpin the transformative forces that are changing how we live and work.
You can harness the growth potential of these powerful forces by investing in megatrend ETFs.
An ETF (exchange-traded fund) is a diversified collection of securities (like a mutual fund) that trades on an exchange (like a stock). Megatrend ETFs capture targeted groups of stocks perceived to be well-positioned to benefit from shifts in technology, society, the environment and demographics over time.
Here’s why megatrend ETFs are the next frontier of access and a glimpse at the five megatrends BlackRock sees at the forefront of our changing world.
With megatrend ETFs, iShares—BlackRock’s ETF business—offers individual investors access to opportunities that were once available primarily to institutional investors able to qualify for venture capital, private equity and other private market investments.
This is unlike sector indexes (like Technology or Communications) that more rigidly track companies within a single sector, or broad indexes (like the S&P 500) that track a universe of companies across many industries and are weighted heavily toward larger, more established companies rather than smaller, more disruptive players.
As an example, with megatrend ETFs, investment in the self-driving and electric vehicles trend would go beyond carmakers and also include hardware companies that make road-monitoring sensors, software companies that make the algorithmic “brains” required to guide vehicles as well as battery producers. By looking beyond sectors and regions and selecting companies that are leaders in a particular ecosystem, investors can access the full growth potential underpinning these trends.
Megatrend ETFs are also transparent and easy to own, removing the need to pick single-stock winners, which has proved difficult for investors to successfully do. With the potential to capture long-term growth opportunities, megatrend ETFs can be seen as complementary holdings to your core portfolio.
BlackRock has identified five megatrends shaping our future. Here’s a look at each and how they can help position you for tomorrow.
Technology is such a prevalent force that the current era has been dubbed the Fourth Industrial Revolution. How you live and work is shaped by exponential technologies like artificial intelligence, 3D printing and synthetic biology, to name just a few. Technology is driving exponential progress in the tech sector and far beyond and underpins the other megatrends we’ll mention shortly.
You can tap into the firms harnessing technology to solve privacy threats by investing in iShares Cybersecurity and Tech ETF.1 The fund seeks to track the investment results of an index composed of companies involved in cybersecurity and technology, including cybersecurity hardware, software, products and services.
Longer lifespans and modern lifestyles will change medicine and consumer habits. If you are fascinated by the possibilities of medical technology, consider ETFs that target companies at the forefront of medical progress. iShares Genomics Immunology and Healthcare ETF2 is one such option. This ETF seeks to track the investment results of an index composed of companies that could benefit from the long-term growth and innovation in personalized medicine: genomics, immunology and bioengineering.
It’s expected that more than two-thirds of the world’s population will reside in cities by 2050, double the percentage from 1950.3 This mass migration to cities will require new business models and infrastructure.
If you would like to invest in companies that may benefit from this megatrend, consider iShares U.S. Infrastructure ETF.4 The fund seeks to track the investment results of an index composed of equities of U.S. companies that have infrastructure exposure and could benefit from a potential increase in domestic infrastructure activities. This ETF offers access to two groups of infrastructure companies that are equally weighted: owners and operators, such as railroads and utilities, and enablers, such as materials and construction companies.
Demand for a clean, green tomorrow will advance energy and conservation. If you drive, or would like to drive, an electric car, you may be interested in putting your money in an ETF with an environmental focus. iShares Self-Driving EV and Tech ETF5 seeks to track the investment results of an index composed of companies that may benefit from growth and innovation in and around electric vehicles, battery technologies and autonomous driving technologies.
It’s expected that the number of newly affluent consumers will expand in Asia and across emerging markets. For example, China now has 3.5 million millionaires and more residents with wealth above $50 million than any country except the United States.6 iShares MSCI China A ETF7 can provide access to the Chinese market as it tracks the investment results of an index composed of domestic Chinese equities that trade on the Shanghai or Shenzhen Stock Exchange and are not well-represented in broad benchmarks.
Every day, you witness how megatrend-driven innovations are transforming our world. With iShares megatrend ETFs, you can invest in the future today.
For more information on how ETFs can help you invest in our changing world, click here.
1 “iShares Cybersecurity and Tech ETF,” BlackRock https://www.ishares.com/us/products/307352/ishares-cybersecurity-and-tech-etf-fund.
2 “iShares Genomics Immunology and Healthcare ETF,” BlackRock https://www.ishares.com/us/products/308878/ishares-genomics-immunology-and-healthcare-etf-fund.
3 “2018 Revision of World Urbanization Prospects,” UN Department of Economic and Social Affairs, 2018.
4 “iShares U.S. Infrastructure ETF,” BlackRock https://www.ishares.com/us/products/294315/ishares-u-s-infrastructure-etf-fund.
5 “iShares Self-Driving EV and Tech ETF,” BlackRock https://www.ishares.com/us/products/307332/ishares-self-driving-ev-and-tech-etf-fund.
6 “Global Wealth Report,” Credit Suisse Research Institute, 2018.
7 “iShares MSCI China A ETF,” BlackRock https://www.ishares.com/us/products/273318/ishares-msci-china-a-etf.
Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses, which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.