*This content is brought to you by Shyft, the global money app, powered by Standard Bank
A new generation of apps allows you to invest in equities from the comfort of your couch, so you don’t need to get the ins and outs of stock trading to get shares in the world’s biggest companies. You don’t even need to “get” crypto to get shares with exposure to crypto.
As an equities app user, you have access to everything from Amazon* to Netflix* and Pfizer* to Zoom*, and a gamut of shares and ETFs in between. But where do you start? While you can opt for big household names (Google*, anyone?), there are convincing returns to be found in other under-the-radar investments, too.
Here are five emerging industries that are set to deliver solid returns whether you “get” them or not.
Cannabis
Forget the stoner stereotypes. Cannabis is a big-money industry – and, thanks to rapidly changing legislation, it has potential for huge growth. Medical marijuana (typically prescribed for anxiety, depression and chronic pain) is legal in more than 30 countries, and recreational marijuana is legal in Canada, Mexico, South Africa and about half of the U.S.
Knowing that both categories are still illegal in pretty much every other country will help you understand the investment risks. There are three broad types of cannabis business: growers and retailers (like Aurora Cannabis*, which produces over 625 000kg a year); cannabis-focused biotech companies (like research companies Cronos Group* and Tilray*); and ancillary companies (like industry giant Canopy Growth*, and HEXO*), which produces cannabis powder products, beverages and more.
Cannabidiol or CBD, a compound found in cannabis plants that has no psychoactive effects, is becoming increasingly popular for its health benefits for humans – and even their pets. The global CBD market alone was worth $2.8 billion in 2020 and is expected to grow 21.2% per year until at least 2028.
Crypto
Opinions are sharply divided on cryptocurrency. Berkshire Hathaway’s Charlie Munger calls it “rat poison”; Twitter CEO Jack Dorsey thinks it could bring about “world peace”. The truth is, investing in crypto could make you crazy rich, or bankrupt, or… something in between. That extreme volatility, combined with a lack of regulatory oversight, is why so many investors are still reluctant to enter the crypto market.
But there’s another way to invest in crypto, without getting your fingers burned: by investing in exchange platforms. These exchanges are how investors buy and sell cryptocurrency. Leading exchanges include Binance.US and Kraken, but a popular frontrunner is Coinbase*, which traded around $3.5 billion per day in August 2021. Investing in an exchange gets you into the industry, but out of the firing line.
Meat alternatives
Set aside the ethical aspects. Ignore, if you like, the growing numbers of vegans and vegetarians, especially among younger millennials and GenZ. To really appreciate the potential of the meat alternatives industry, consider how Covid-19 exposed the gaps in the real meat supply chain. In the U.S. alone, some analysts only see per-capita meat consumption recovering to pre-Covid levels in 2026.
Big-name food brands are already growing their presence in the meat substitute market: Tyson Foods, the largest meat producer in the U.S., has recently expanded into alternative proteins with its Raised & Rooted brand. Plant-based pioneers Beyond Meat* and Oatly are also top contenders with multi-billion-dollar valuations. Forbes believes Beyond Meat’s revenues will rise from $407 million in 2020 to $1.1 billion by 2023, which is a growth rate of 40% per year.
Cybersecurity
The worldwide shift to remote working has been great for tech companies like Apple*, Amazon*, Microsoft*, Netflix*, Facebook*, Spotify*, Tencent*, Pinduoduo*, Twitter*, Zoom* (the list goes on…). It’s also been a lucrative time for cybercriminals. Data breaches and cybercrime are at an all-time high. According to IBM*, ransomware attacks in 2020 cost USD4.44 million on average. So if you’re looking for growth, consider cybersecurity. CrowdStrike*, for example, provides endpoint security for all your streams, video calls and e-commerce purchases.
Video games
In mid-2021, Accenture put the full value of the global video gaming industry (hardware, software, accessories, the works) at over USD300 billion. That’s made up of USD200 billion in direct revenue, and USD100 billion in indirect revenue… and it’s more than the movie and music markets combined.
That same report put the number of gamers at 2.7 billion globally, with 400 million new gamers expected by the end of 2023. Of those noobs, 60% are women and 30% are under 25. You’re looking at the future, and gaming companies like Activision*, Electronic Arts*, DouYu* and Tencent* are riding that wave.
Get started with ETFs
Want to invest, but don’t want to go all-in on shares in a single company? Consider exchange-traded funds (ETFs), which are designed to track the performance of major indices, like the NASDAQ 100, S&P 500, U.S. Treasury bond indices, and so on. ETFs can offer low expense ratios, plenty of liquidity, and a wide range of investment choices to help make sure you’re well diversified.
You can select a particular area of focus, too. The iShares Global Impact ETF*, for example, seeks investment in positive-impact companies addressing social and environmental challenges, while the iShares Exponential Technologies ETF* tracks the investment results of an index made up of companies creating or using exponential technologies. For an ETF that holds emerging market stocks predominantly classified as large and mid-cap, opt for the iShares MSCI Emerging Market Index Fund*, which tracks the performance of the MSCI TR Emerging Markets Index.
*Available on Shyft
Download Shyft and register before 31 October 2021 and you will get R100 towards buying any shares and ETFs. Not yet ready to invest? Spend your R100 on forex, shop online with a virtual card, save it or send it to someone else. Ts & Cs apply.
Footnote:
This post was sponsored by Shyft, the global money app, powered by Standard Bank. With Shyft you can buy forex instantly anytime, anywhere, and at the best rates, and invest in top U.S. stocks and ETFs.
Visit https://getshyft.co.za/#get-the-app to download it now, no matter where you bank. Shyft operates under the license of The Standard Bank of South Africa Limited, an authorised Financial Services Provider (FSP number 11287).
Note that exposure to cryptocurrency, even derived exposure, is high risk due to price volatility and potential regulatory intervention. Standard Bank Shyft is not authorised to give advice or intermediary services on crypto assets. Please consult with a duly authorised financial advisor.
