Investors seeking to invest in technologies should conduct a little research when selecting an investment vehicle to truly understand what they are investing in. A mutual fund or ETF may have very broad or specific mandates for the manager. What an investor may think is a broad technology focused mutual fund may be very specific to a subsector of the market. Likewise, an investor seeking an investment in a specific subsector of the market, such as electric vehicles for example, may be getting a more broad-based approach.
What we often find is investors seeking to invest in very specific technologies that they believe in for their prospects of growing and doing well. These investors may be best served by an ETF. With headlines focused on cryptocurrencies, many investors have asked about gaining exposure to this area. We have advised clients that currencies themselves are very volatile and investing in companies that facilitate cryptocurrency transactions may be a less volatile way to capitalize on opportunities in that market, and there are ETFs focused specifically on the blockchain technology behind cryptocurrencies.
Other investors may be interested and following the worldwide chip and semiconductor shortage, the pent-up demand for travel, online media, entertainment, and streaming services, the demand for cleaner energy, and even the demand for online betting. There are ETFs that invest in baskets of stocks of companies that are developing these emerging and growing technologies.