5 popular ETF investment themes to consider in 2022
Wall Street had a very rough start to 2022. The Dow Jones Industrial Average and S&P 500 indices experienced a third straight week of declines while posting their worst weekly performances since 2020 (for the week ending January 21, 2022). The tech-heavy Nasdaq Composite is no less struggling either. The index also had the weakest weekly performance since October 2020, according to a CNBC article. It has entered correction territory, with the Nasdaq Composite now trailing its November record by more than 14%.
Currently, market participants remain concerned about the uncertainty surrounding the pandemic, the fate of the fourth quarter earnings season, and the Federal Reserve’s decision to raise interest rates earlier.
Amid pandemic concerns, thematic investing continues to be a popular trend. With this in mind, let’s take a look at some of the themes that could evolve in the world of investing in 2022:
Blockchain has become the underlying technology for the most popular cryptocurrency, Bitcoin. An article on Investor’s Business Daily defined blockchain technology as a shared public ledger, also known as a distributed database, that tracks and records transactions in a transparent and tamper-proof manner.
Estimates of adoption of this technology are staggering. Deutsche Bank expects blockchain systems to record transactions for around 10% of global GDP by 2027.
Blockchain ETFs like ETF Amplify Transformational Data Sharing BLOK can be followed by investors (read: 4 stocks and ETFs to make the most of the metaverse boom).
Digital Payment ETFs
The world is gradually moving towards digitalization, increasing the dominance of technology in the financial industry. A Market Data Forecast (MDF) report also highlights growing opportunities in the global fintech market, which is expected to grow at a CAGR of 23.4% between 2021 and 2026. According to the report, the fintech space is expected to reach a value Merchant. about $324 billion by 2026.
Along with increased interest in online shopping, customers are turning to digital payments to pay their bills. At the same time, merchants and utility providers are increasingly advocating the same.
In such a scenario, investors can check ETFMG Prime Mobile Payments ETF I PAY, Ecofin Fund for Digital Payments Infrastructure TPAY and Global X FinTech ETF (FINX) (read: A Complete Guide to Fintech ETFs).
AI, robotics and cybersecurity ETFs
AI is rapidly changing the business landscape by expanding opportunities, generating revenue and improving efficiency. It helps improve almost everything, including advertising, healthcare, robotics, retail, video streaming, gaming, and urban development.
We live in an age largely dominated by AI applications and technological advancements. Amid the coronavirus crisis, the demand for online services has increased, resulting in the dominance of AI. Globally, the AI market is expected to grow at a CAGR of 29%, growing from $42.8 billion in 2019 to $152.9 billion in 2023, according to an article by Analytics Insight.
The robotics market is rife with opportunities as robots are used for tasks such as disinfecting hospitals, homes and workplaces, as well as monitoring, surveying, handling and delivering food and medications.
However, the increasing adoption of these technologies exposes businesses, governments and organizations to cyber risks.
According to a report by Grand View Research, the global cybersecurity market is expected to reach $241.1 billion, growing at a CAGR of 11% from 2019 to 2025. As a result, our investors may consider ETF Global X Robotics and Artificial Intelligence BOTZ, First Trust Nasdaq Artificial Intelligence and Robotics ETF ROBT, ETF ROBO Global Robotics & Automation ROBO, iShares Multi-Sector Robotics and Artificial Intelligence ETF (IRBO), Nasdaq First Trust Cyber Security ETF (CIBR) and ETFMG Prime Cyber Security ETF (HACK) (read: Play 5 high beta ETF zones for January and be a bottom fisherman).
Cloud Computing ETFs
Cloud computing and storage are expected to remain in vogue in 2022. The space has received a boost amid the coronavirus outbreak, with a large population working from home across the world. Given the accelerated deployment of the coronavirus vaccine around the world, demand for cloud computing is expected to remain robust even after the pandemic subsides.
It should be noted here that cloud computing and storage have found applications in social networks, messaging apps, and streaming services. It enabled video conferencing, gaming, online shopping, collaboration on remote projects, online courses, publishing, and more. Cloud computing also helps organizations process a lot of information remotely, as well as develop and run key applications and services.
Thus, investors may consider First Trust Cloud Computing ETF SKY, Global X Cloud Computing ETF (NAIL) and WisdomTree Cloud Computing ETFs (WCLD) (read: 5 ETF predictions for 2022).
The infrastructure stock boom will sweep America
A massive push to rebuild America’s crumbling infrastructure will soon be underway. It is bipartisan, urgent and inevitable. Billions will be spent. Fortunes will be made.
The only question is “Are you going to get into good stocks early when their growth potential is greatest?”
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First Trust Cloud Computing ETF (SKYY): ETF Research Reports
ROBO Global Robotics and Automation Index ETF (ROBO): ETF Research Reports
Global X Robotics & Artificial Intelligence ETF (BOTZ): ETF Research Reports
ETFMG Prime Mobile Payments ETF (IPAY): ETF Research Reports
Amplify Transformational Data Sharing ETF (BLOK): ETF Research Reports
First Trust NASDAQ Artificial Intelligence and Robotics ETF (ROBT): ETF Research Reports
Ecofin Fund for Digital Payments Infrastructure (TPAY): ETF Research Reports
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.