By Faith Ashmore, Benzinga
Exchange-traded funds, or ETFs, have long had the reputation of being relatively more stable investment opportunities. These funds aim to mirror the performance of a basket of equities or a specific index, which offers broad market exposure while reducing the risk associated with individual stocks. One of the ETFs that has been on the radar of investors lately is Invesco QQQ Trust (NASDAQ: QQQ).
QQQ tracks the performance of the Nasdaq-100 Index, which represents the 100 largest non-financial companies listed on the Nasdaq Stock Market. QQQ is best known for providing investors with exposure to companies at the forefront of innovation across various sectors, including technology, healthcare and communication services. Over the past year, QQQ has gained 45% and led all inflows in late January. Late January marked a 1.4% gain in assets, and assets under management now stand at around $246 billion.
QQQs recent performance comes on the heels of the Federal Reserves announcement in December to keep interest rates at the current level, signaling a potential end to the central bank's cycle of rate hikes and a potential shift towards rate cuts in 2024. This decision reflects the Federal Reserve's response to more positive economic conditions and its efforts to support economic growth and stability. Lower interest rates historically stimulate increased borrowing and investment.
While QQQ offers a basic solution to owning stocks in more established growth verticals, some ETFs like the AXS 2X Innovation ETF (NASDAQ: TARK) take a more targeted approach to investing in the companies of tomorrow. How is this accomplished? Quite simply, TARK provides two times daily exposure to the ARK Innovation ETF (NYSE: ARKK), which itself is a more concentrated portfolio of 35 growth equities. TARK gives you daily leveraged exposure to companies that are pioneers in disruptive technologies like next-gen internet, electric vehicles, genomics and fintech.
These industries are growing at rapid paces and making big splashes. For example, fintech revenues are projected to grow sixfold and reach $1.5 trillion by 2030. Similarly, worldwide adoption of electric vehicles is fostering a steady annual growth rate within the industry. The global genomics market is expected to reach $83.1 billion by 2028. For investors who have doubted the strength of industries like virtual reality, the numbers dont lie; the global virtual reality in the gaming market is expected to expand at a CAGR of 31% from 2023 to 2033. The broader gaming industry is even growing in unsuspecting markets; for example, the Middle East is reporting that 60% of the population considers themselves gaming enthusiasts. These industries are hitting home with a lot of younger audiences as well who are more technologically savvy.
In 2023, TARK received the Best ETF Launch Award at the Benzinga 2023 Global Fintech Awards and is part of AXS Investments family of ETFs focused on a variety of exposures that surround the Innovation Trade. While QQQ is capturing the success of the present, ETFs like TARK look to capture the success of the future.
In recent years, investors have witnessed an explosion of disruptive technology that has permeated various industries, reshaping the way we live, work and interact. The explosion of disruptive technology in key industries like transportation, health and finance has not only improved efficiency and convenience but has also created new economic opportunities and transformed entire ecosystems. In the coming decades, it seems evident that this trend will continue to accelerate. ETFs like TARK that are capitalizing on disruptive technologies could be poised to grow alongside these industries.
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
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