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3 Funds Riding Trends You Can Bank On

These ETFs capitalize on what people are using and doing

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3 Funds Riding Trends You Can Bank On

This technology is rapidly replacing traditional software both in the home and in the workplace. Cisco (NASDAQ:CSCO) says the global cloud will see a 66% compound annual growth rate through 2015. A recent Netscribes report said China’s cloud computing market will grow 77.5% annually in the same period. A bevy of other reports list different figures, but all point up — way up.

For 0.6% in expenses, the First Trust ISE Cloud Computing Index Fund (NASDAQ:SKYY) offers exposure to a number of pure-play cloud companies, including Rackspace Hosting (NYSE:RAX), Salesforce.com (NYSE:CRM) and NetApp (NASDAQ:NTAP). However, SKYY also holds traditional software companies like Oracle (NASDAQ:ORCL) and SAP (NYSE:SAP) that are moving into cloud services, and it even lumps in tech giants such as Apple and Amazon (NASDAQ:AMZN), which are more well-known for their respective gadgets and e-commerce services, but also provide cloud services.

Of these three funds, SKYY is the least-focused play, but considering that the spillover brings tech giants like Apple, Amazon and Google (NASDAQ:GOOG) under the umbrella — helping it to impressive 20% YTD gains — investors should keep that worry to a minimum.

Market Vectors Gaming ETF

Without delving into the moral case here, investors should love addiction. Just ask anyone who owns tobacco stocks.

Similarly, addiction is what helps make gaming stocks — fueled by a steady stream of people who can’t tear themselves away from the slots, not to mention interest from those who can game a little more responsibly — so attractive.

Plus, casinos are growing like weeds because governments in the U.S. and abroad are desperate for ways to bolster the bottom line and want to keep gambling revenues inside their own borders.

China’s gargantuan Macau gaming hub just saw revenues skyrocket 24% in March. Back home, Nevada casinos watched their gaming revenues grow about 6% — the state’s fifth consecutive month of increases — and the lesser-discussed New York gambling scene popped with 29% year-over-year revenue gains. Struggling Japan, tired of watching its citizens spend their entertainment yen abroad, is considering finally legalizing gambling. And Las Vegas Sands (NYSE:LVS) Chairman and CEO Sheldon Adelson even sees potential to turn debt-addled Spain into an eventual European gaming mecca.

All this makes the Market Vectors Gaming ETF (NYSE:BJK) look like a fruitful bet. Naturally, it carries all the big Vegas/Macau players — LVS, Melco Crown Entertainment (NASDAQ:MPEL), Wynn Resorts (NASDAQ:WYNN) and MGM Resorts (NYSE:MGM). But BJK also holds gaming suppliers, which stand to gain as even private casino operators juice up their operations.

For instance, BJK has a 3% weighting in International Game Technology (NYSE:IGT), which not only designs, makes and distributes slots and other gaming machines, but also is building up a mobile gambling portfolio of games available on the Apple iOS and Google Android operating systems.

Another bonus: BJK is far less volatile than even many of its largest-cap holdings, so persistently watchful investors won’t have to deal with the day-to-day agita the gaming sector tends to provide.

Market Vectors Gaming charges a reasonable 0.65% in expenses. Total assets under management are just about $80 million, though those select few already smart enough to be in BJK have enjoyed 22% returns in 2012 — double the S&P 500.

Kyle Woodley is the assistant editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley.


Article printed from InvestorPlace Media, http://investorplace.com/2012/05/3-funds-riding-trends-you-can-bank-on/.

©2014 InvestorPlace Media, LLC

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