Star Search

Investment Analysis Clubs Saul’s Investing Discussions
1

Hi gang,

We’re all searching for stars for study, aren’t we? Those unknown companies raking in cash that we never heard of, or don’t know what they do? So today I decided to look at Thematic ETFs, Thematic investing supposedly being a hot new investing trend. But there aren’t many ETFs that purport to be Thematic. The only fund which self-describes their own funds as thematic appears to be Global X. There are only 16 funds in the group and most are of little interest to us (okay, to me.) Some are fairly new, and some of the others that might have been interesting had a very low return. Here are all the Thematic ETFs:


Ticker	Fund
BFIT	Global X Health & Wellness Thematic ETF
BOTZ	Global X Robotics & Artificial Intelligence ETF
CATH	Global X S&P 500 Catholic Values ETF
COPX	Global X Copper Miners ETF
FINX	Global X FinTech Thematic ETF
GOEX	Global X Gold Explorers ETF
KRMA	Global X Conscious Companies ETF
LIT	Global X Lithium & Battery Tech ETF
LNGR	Global X Longevity Thematic ETF
MILN	Global X Millennials Thematic ETF
PAVE	Global X U.S. Infrastructure Development ETF
SIL	Global X Silver Miners ETF
SNSR	Global X Internet of Things Thematic ETF
SOCL	Global X Social Media ETF
SOIL	Global X Fertilizers/Potash ETF
URA	Global X Uranium ETF

I chose the following 5 in which to search for stars.


Ticker	Fund
BOTZ	Global X Robotics & Artificial Intelligence ETF
LIT	Global X Lithium & Battery Tech ETF
MILN	Global X Millennials Thematic ETF
SNSR	Global X Internet of Things Thematic ETF
SOCL	Global X Social Media ETF

Next I looked at the Top 10 Holdings for each of those to come up with a list of possibilities. (Skip to the bottom for the entire list.) So when I get time, I’ll go through the list, some names with which I’m not familiar, to see what’s shaking in the Thematics tree. Thought I’d give you a head start. :slight_smile: If anyone wants to look at more holdings beyond the Top 10, you can go to the Global X site and look up all holdings in the prospectus for any fund.

Dan

Global X Social Media Etf (SOCL)
The Global X Social Media ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Social Media Total Return Index.

Top 10 Holdings

% Asts Name
10.7% TENCENT HOLDINGS LTD
10.1% FACEBOOK INC-A
8.7% TWITTER INC
5.0% UNITED INTERNET AG-REG SH
4.7% YAHOO! INC
4.7% NETEASE INC-ADR
4.6% IAC/INTERACTIVECORP
4.6% ALPHABET INC-CL A
4.5% MOMO INC-SPON ADR
4.5% YANDEX NV-A

Internet of Things Thematic ETF (SNSR)
The Global X Internet of Things Thematic ETF (SNSR) seeks to invest in companies that stand to potentially benefit from the broader adoption of the Internet of Things (IoT). This includes the development and manufacturing of semiconductors and sensors, integrated products and solutions, and applications serving smart grids, smart homes, connected cars, and the industrial internet.

Top 10 Holdings

% Asts Name
11.1% STMICROELECTRONICS NV
7.0% SKYWORKS SOLUTIONS INC
6.0% MOBILEYE NV
5.5% SENSATA TECHNOLOGIES HOLD
5.5% GARMIN LTD
4.8% DEXCOM INC
4.5% BROCADE COMMUNICATIONS SY
3.8% ADVANTECH CO LTD
3.4% CYPRESS SEMICONDUCTOR COR
3.1% AMS AG

Robotics & Artificial Intelligence Thematic ETF (BOTZ)
The Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Robotics & Artificial Intelligence Thematic Index.

Top 10 Holdings

% Asts Name
8.0% FANUC CORP
7.7% MITSUBISHI ELECTRIC CORP
7.6% SMC CORP
7.3% ABB LTD-REG
7.3% KEYENCE CORP
7.0% INTUITIVE SURGICAL INC
6.2% YASKAWA ELECTRIC CORP
5.5% OMRON CORP
5.1% MOBILEYE NV
5.0% TRIMBLE NAVIGATION LTD

Lithium & Battery Tech ETF (LIT)
The Global X Lithium & Battery Tech ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Lithium Index.

Top 10 Holdings

% Asts Name
22.3% FMC CORP
14.9% QUIMICA Y MINERA CHIL-SP
5.9% SAMSUNG SDI CO LTD
5.4% TESLA MOTORS INC
5.2% ALBEMARLE CORP
4.8% LG CHEM LTD
4.6% ENERSYS
4.6% GS YUASA CORP
4.4% SIMPLO TECHNOLOGY CO LTD
4.2% PANASONIC CORP

Millennials Thematic ETF (MILN)

The Global X Millennials Thematic ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Millennials Thematic Index.

Top 10 Holdings

% Asts Name
4.0% AMAZON.COM INC
3.9% PRICELINE GROUP INC/THE
3.9% EBAY INC
3.8% FACEBOOK INC-A
3.8% APPLE INC
3.7% NETFLIX INC
3.4% EXPEDIA INC
3.4% INTUIT INC
3.4% FISERV INC
3.3% WALT DISNEY CO/THE

All Top 10 Stocks*, listed alphabetically
ABB LTD-REG
ADVANTECH CO LTD
ALBEMARLE CORP
ALPHABET INC-CL A
AMAZON.COM INC
AMS AG
APPLE INC
BROCADE COMMUNICATIONS SY
CYPRESS SEMICONDUCTOR COR
DEXCOM INC
EBAY INC
ENERSYS
EXPEDIA INC
FACEBOOK INC-A (2 funds)
FANUC CORP
FISERV INC
FMC CORP
GARMIN LTD
GS YUASA CORP
Held in 1 Fund
IAC/INTERACTIVECORP
INTUIT INC
INTUITIVE SURGICAL INC
KEYENCE CORP
LG CHEM LTD
MITSUBISHI ELECTRIC CORP
MOBILEYE NV (2 funds)
MOMO INC-SPON ADR
NETEASE INC-ADR
NETFLIX INC
OMRON CORP
PANASONIC CORP
PRICELINE GROUP INC/THE
QUIMICA Y MINERA CHIL-SP
SAMSUNG SDI CO LTD
SENSATA TECHNOLOGIES HOLD
SIMPLO TECHNOLOGY CO LTD
SKYWORKS SOLUTIONS INC
SMC CORP
STMICROELECTRONICS NV
TENCENT HOLDINGS LTD
TESLA MOTORS INC
TRIMBLE NAVIGATION LTD
TWITTER INC
UNITED INTERNET AG-REG SH
WALT DISNEY CO/THE
YAHOO! INC
YANDEX NV-A
YASKAWA ELECTRIC CORP

  • from the 5 chosen ETFs
19 Likes
2

Interesting. I like some of the themes and have invested in LIT as well as ROBO (Robotics ETF) although I like the idea of the AI/Robotics combo. Interesting to see Mobileye had so much index tracking going on. Whilst I have been in 5 of the IoT tracker holdings - 2 of these have been bought out (Brocade and Mobileye), 2 I have elected to sell out of as I don’t necessarily see them as genuine IoT plays (Skyworks and Cypress) and 1 seems dead in the water (Sensata).

I may need to rethink Skyworks and Cypress but their IoT talk doesn’t seem to match their business performance which seems very semiconductor in nature rather than IoT oriented. (Not that CalAmp or Sierra Wireless etc are exactly delivering the goods either).

The 1 IoT stock I have very high conviction in that is doing the business is bizarrely in UK rather than US - Telit Communications, however I still believe the best positioned IoT company is ARM - which is tempting me into Softbank.

Ant

2 Likes
3

We’re all searching for stars for study, aren’t we? Those unknown companies raking in cash that we never heard of, or don’t know what they do? So today I decided to look at Thematic ETFs,

Hi again Raptor, and thanks again. Another very nice post.
Saul

1 Like
4

I have elected to sell out of as I don’t necessarily see them as genuine IoT plays . . .

Hi Ant,

Exactly! One should never assume that a company is involved directly in a particular niche just because it is in some relevant index and certainly not because it’s in a fund that is targeting said niche. Managed funds sometimes have lots of problems funding target ports, especially when the target includes really small firms–just the kind we might be searching for. There often aren’t enough shares for them to buy a decent (even small) scoop of shares, and also not every small company is spouting their target niche to the press for reasons of secrecy and competition. I suspect that a lot of the time even funds aren’t quite sure exactly what a company is producing or servicing for their customers. In that case, it’s our job to find out–not always as easy as it sounds. Thus “further study.” Shortcuts can be dangerous here, such as to assume that a company is involved in, say, IoT. We have to ask ourselves, if we were a startup and making a fortune on some aspect of designing and building out cloud infrastructure (just for a simple example) would we want to brag about our position in our little niche, and explain to the press what exactly we do? Methinks NOT. :slight_smile:

So by the time what our little gold mine does to mint money, it probably has become a matter of public knowledge, and if we’re smart (and we are) we’ve already bought enough shares as insiders to bring the price up to where it “should be.” And here comes the bandwagon, everyone wants shares.

And for the really big gains … “Oops–it’s already too late.”

Been there, done that, many times. No t-shirt 'cuz I couldn’t afford one. :slight_smile:

Dan

5

These Thematic ETFs may be a good way to play the Gorilla Game approach to investing in a basket of stocks.

Probably not niche enough in many circumstances. Probably would not have been one of these ETFs for:

  • Storage - move form large DASD (IBM) to PC disk drive based storage (EMC, NetApp)
  • Routing companies - eventual winner Cisco
  • DB companies - eventual winner Oracle

Need to look at fees also. Tom

6

Routing companies - eventual winner Cisco

I wouldn’t be so sure they will be the ultimate router winner. While they have been to date, a little company called Arista Networks is nipping at their heels gaining significant share over the past several years, though with still a long ways to go admittedly.

However, you may have been saying there isn’t enough competition in the space to create a thematic ETF which I would agree with.

Regards,
A.J.

7

Has anyone ever used Motif?

https://www.motifinvesting.com/

I never have but it looks interesting. They have “motifs” (thematic ETF’s) that they have created, community created ETF’s or you can create on your own (or modify existing ones).

Brian

8

Brian, I’m still snooping around Motif, for a very particular reason. I invest for a few relatives along with my own ports. Some of them (including one of my own old IRA’s) are very small, a couple under $30k. My style of investing isn’t trading, but it isn’t LTBH either. The commissions and fees seem small in the larger ports (<100k but less than <$1m each) that I use to “template” investments for all the ports. But when it gets down to small IRA’s, the fees are eating into profits enough that it makes a real difference over the course of a year. With identical buy and sell percentages of each port, the variance in performance is sometimes pretty drastic.

Motif’s method of buying portfolios would be ideal for me. Any change (or a bunch of changes) to any port is 1 single, low-cost commission. All other ports could follow suit. So I would just invest in 1 (larger) port, and let the rest follow that template, for much reduced fees, if that makes sense.

Some of my questions remaining they aren’t too thrilled about discussing:

• Their universe of stocks–they don’t trade everything and it’s hard to find out which they do and don’t.
• Their universe of ETF’s–I happen to use ETFs frequently.
• Will they allow me to manage ports that aren’t mine–Scottrade does but these guys don’t seem so sure. Scottrade, of course, charges for each order in each portfolio, which is hard on smaller ports.

I too would really like to talk to someone who has used Manifest for their opinions. (hint, hint, guys) :slight_smile:

Dan