Goldman Sachs is hoping to give Cathie Wood a run for her (very large pot of) money.
The investment banking giant launched a technology ETF last week seemingly to compete with Wood’s successful firm, Ark Invest, for the dollars of innovation-focused investors.
Unlike Wood’s flagship ETF Ark Invest (ARKK), which is heavily exposed to mega-cap innovators like Tesla and Shopify, the Goldman Sachs Future Tech Leaders Equity ETF (GTEK) looks to invest in smaller under-the-radar tech names with more room to grow.
Let’s take a look at GTEK’s top three holdings. One of them could be the next mega-cap millionaire maker — and worth pouncing on using just some spare change.
1. Marvell Technology (MRVL)
Based in Delaware, this semiconductor technologist is GTEK’s largest holding representing 3.4% of the portfolio.
As technology evolves and more and more connections are being powered by the “internet of things,” advanced machine learning, and 5G — especially through the pandemic — Marvell’s long-term growth trajectory is highly attractive.
Specifically, its diverse products will prove useful as even further technological advances in AI, network connected industrial equipment and even autonomous vehicle technology require more information.
Despite facing intense competition from the likes of Micron Technology and Broadcom, Marvell has been posting impressive numbers.
In Q2, it brought in a record revenue of $1.076 billion, which represents 48% growth year over year. And 40% of its growth came from its data center sector.
When announcing the results, Matt Murphy, Marvell’s president and CEO, added that he expects the company’s 5G business to continue to generate strong revenue growth throughout the rest of the year.
2. MercadoLibre (MELI)
Hailing from Buenos Aires, Argentina, MercadoLibre is an online commerce platform operating in 18 Latin American countries.
Basically, it’s the eBay of South America, and accounts for 3.2% of GTEK’s holdings.
MercadoLibre, which translates to “free market,” is an already large e-commerce community that is continuing to grow. On its site, the company notes that Latin America has a population of more than 635 million people and has one of the fastest-growing internet penetration rates in the world.
In the first half of 2021, the company recorded 98 million unique active users and moved $13 billion in merchandise over that period.
Specifically in Q2, MercoLibre saw net revenues of $1.7 billion — a 93.9% increase on a year-over-year basis as well as a 47.4% growth to its unique active visitors rate.
Given the size of the region it serves, MercadoLibre has massive potential for growth and appears poised to continue to grow its presence in the e-commerce and digital payment sphere.
To be sure, MercadoLibre trades at more than $1,880 per share. But you can get a piece of MercadoLibre using a popular stock trading app that allows you to buy fractions of shares with as much money as you’re willing to spend.
3. HubSpot (HUBS)
This software company offers a suite of products to help manage customer relationships for marketing, sales and customer service organizations.
The company reports it has more than 121,000 customers in more than 121 countries.
It represents 2.8% of GTEK’s portfolio.
HubSpot reported $310.8 million in total revenue in the second quarter — up 53% from the year before. Subscription revenue accounted for $300.4 million of that sum, which was also an increase of 53% from the same quarter the year before.
By the end of the year, the company anticipates its total revenue to be in the range of $1.268 billion to $1.272 billion.
Clearly, HubSpot sees plenty of room for growth in its industry and it’s aiming to gain a larger and larger slice of that pie.
A less volatile approach
All three stocks look like solid bets for investors interested in the future of technology. That said, growing innovators tend to reinvest all of their profits back into the business.
If you’re a risk-averse investor looking to diversify into something more stable, you might prefer assets that produce cold, hard cash.
And you don’t have to limit yourself to the stock market.
For instance, some popular investing services make it possible to lock in a steady rental income stream by investing in premium real estate properties — from commercial developments in LA to residential buildings in NYC.
You’ll gain exposure to high-end properties that big-time real estate moguls usually have access to, and you’ll receive regular payouts in the form of quarterly dividend distributions.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
