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Growth tech sector, (e.g. ASX:NDQ, ASX:HACK, and ASX:RBTZ) Nominated by David Bassanese, BetaShares

While value sectors like energy and financials are currently enjoying a rare burst of outperformance, to quote former Prime Minister John Howard, I suspect this may prove to be their “five minutes of sunshine†before growth sectors such as technology start trouncing them again.


In the years leading up to the COVID crisis, the global technology sector had crushed all before it. This encompassed not just America’s well known internet stocks on the NASDAQ exchange, but also Asian and Australian technology companies, and global hightech sectors such as cybersecurity, robotics and artificial intelligence. All these dynamic growth exposures are easily accessible on the ASX through the BetaShares NASDAQ 100 ETF (ASX: NDQ), BetaShares Global Cybersecurity ETF (ASX: HACK) and BetaShares Global Robotics and Artificial Intelligence ETF (ASX: HACK).


So why the current apparent rotation to value? Value was further crushed during the darkest days of the COVID crisis while technology gained added allure as a defensive sector given the stampede toward even more online activity. With the COVID clouds lifting, those sectors most beaten up during the crisis are naturally rebounding the hardest. But in my view, somewhere through next year, the strong structural growth drivers favouring technology should once again start dominating.




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The continuing problems of semiconductor supply may not ease any time soon according to Nikkei Asia

Taiwan Semiconductor Manufacturing is rushing to try and build new facilities through the Chinese New Year in order to meet demand.


TSMC is one of the biggest suppliers of chips to company like Apple, Google and Qualcomm. As a result of a worldwide shortage in chips that was brought on due to the pandemic, they are now rushing to try and get a new factory in the southern Taiwanese city of Tainan built. It'll be "the world's most advanced 3-nanometer chip production plant," according to Nikkei. The company is also building a research and data center in Hsinchu.


Construction the new facility will take place throughout 2021, with completion expected in 2022.

In addition to the 3nm plant, the company is also preparing to boost its capacity to make 5nm chips. These chips are using in the latest 5G iPhone 12s and new Mac core processors. TSMC wants to boost production by 70% from the end of last year.


It'll be resuming construction "a few days earlier" than most coming out of the Lunar New Year in southern Taiwan. TSMC is also boosting capex by $25 billion, to $28 billion, this year.

Car manufacturers have already reported halts in car production due to chip shortages for ECU's and other electronic management systems.

(see Here )

With Taiwan becoming the epicentre of nano chips, it makes even more sense for China to stocks up on these chips and then start the "soft invasion" process of Taiwan. Blockade the Island, patrol the skies with Chinese Military attack aircraft so nothing gets in or out , and by saying they are merely protecting their renegade province, not calling it an invasion or declaration of war. Having obseved how meekly the west rolled over when Russia took over Crimea, they will think its a done deal.



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from Best Investment Ideas for the Next Five Years.... a bit for everyone




How to play 5G


An obvious answer to the question of coming investment opportunities is the roll-out of 5G telephone services globally. But the obvious way to play it (Telstra and other phone companies, Ericsson, Nokia and even Apple) in our view is not where optimal returns will be had.


We view 5G predominantly as a data play. 5G not only dramatically increases the speed that data travels a wireless network data pipe but also significantly decreases latency, a measure of the network's responsiveness.


Reduced latency is critical in many future applications such as remotely automated vehicle guidance (the brakes need to go on now!) or in health care, such as remote heart rate monitoring.


Underpinning this move to 5G are data tools, hardware and processes which we believe will offer the best opportunities. Is there enough digital infrastructure in the right places to allow this to happen? Not yet, but there will need to be.


And once the capacity is there, expect to see a raft of new applications enabled on 5G which were not possible before, in much the same way as 4G was a major catalyst to growth of Netflix, Uber and indeed Amazon's data business.

Alex Pollak, Loftus Peak ... Chief Investment Officer




Tech companies meeting changing consumer needs

The COVID-19 pandemic has created long-term structural changes in consumer behaviour beyond e-commerce, including remote working, distance learning and virtual health care.


The pandemic's impact on e-commerce is evident but its effect will reach well beyond online shopping. The need to bank, learn, work, play and even communicate remotely as result of lockdowns has hastened the use of digital technologies.


In fact, consumers' attitudes on work, transportation, health and hygiene, education and entertainment have shifted, perhaps permanently. The use of online platforms has expanded dramatically, requiring increased development of sophisticated internet infrastructure, including 5G networks.


The pace of digital adoption should quicken even further as remote working, online learning and e-commerce penetration continue to rise.


These trends are particularly prevalent in emerging economies, where approximately 75-80% of the world's consumers will soon reside, according to the Brookings Institute. We expect the pattern of faster digitalisation in China, which has continued after the loosening of virus mitigation measures, to develop across emerging markets.


This transformation should create investment opportunities with tech companies whose products and services address the needs created by these trends likely beneficiaries.

Patricia Ribeiro, American Century ... Senior Portfolio Manager



Clipping every ticket

We're seeing a group of emerging companies capitalising from the global shift towards channel unification. I'll illustrate this through the bets our fund has made in unified global payments processing, and unified communications.


The habits of future generations are evolving rapidly. There's a plethora of channels which customers can use to pay, presenting an issue for companies with global customers. How can they cater for this wide range of payment methods? This task is impossible to manage internally so they require access to systems that unify these payment channels into one easy-to-manage platform. Our fund has invested in one such founder-led payment unification company: Adyen is a Dutch company taking a slice of every transaction that is processed on its global platform.


A similar evolution is happening in communications. Think about how many communications channels there are, such as messaging platforms, emails, SMSs and phone calls. These require aggregation so companies can keep track of and target their desired audiences. Our investments generate revenue from every message, SMS, email or phone call made globally and we see rapid growth over the coming years.

Lawrence Lam, Lumenary Investment Management ....Managing Director and Founder
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why not ask a difficult question, eb ?

I am not confident to point you in the right direction. There are so many layers involved. Battery for power backup, or battery for electric vehicles? Lithium, (and could that be hard rock or brine from salars?) or other pathways for battery metallurgy; graphite, nickel, cobalt, manganese? Or Copper? Or even Flow Batteries? Or, rare earths that are needed for the magnets, both in wind generation or EV braking systems? Or, try a country thematic, with the EU mandating local supply lines, or avoiding China? And then there is the deep green trend, of a full accountability from inception to recycling? And to go with a minnow, still in need of funding but making big promises, or stick with the major players?



Perhaps it is too late, and needs a lot of focus. Perhaps there are alternatives, such as an index fund? The following ETF I bring to your attention, though of course there is no recommendation. Please do your own investigation. There would be others, out there, I am sure.


ETFS Battery Tech & Lithium ETF (ASX Code: ACDC) offers investors exposure to the energy storage and production megatrend, including companies involved in the supply chain and production for battery technology and lithium mining. Demand for energy storage is being driven by the movement towards emissions reduction and renewable energy, such as solar and wind.


About ACDC ...

ACDC aims to provide investors with a return that, before fees and expenses, tracks the performance of the Solactive Battery Value Chain Index. The Solactive Battery Value Chain Index represents the performance of companies that are providers of electrochemical storage technology and mining companies that produce metals that are primarily used for the manufacturing of battery grade lithium batteries.

ACDC uses a full replication strategy to track the index, meaning that it holds all of the shares that make up the index. It is equal weighted, meaning each holding makes up the same portion of the portfolio each time the index is rebalanced and therefore contributes equally to overall performance.

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