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3 Funds Set to Gain From Big Tech's Internet Projects
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Internet connectivity is imperative to the growth of businesses, be it brick-and-mortar or web-based services. This is why technology giants are making extreme efforts to bring the majority of the global population under the umbrella of digitization.
Big techs such as Facebook, Inc., Amazon.com, Inc. and Alphabet Inc., over the past few years, have been trying their best to bring about Internet access to remote and rural parts of the world, which have been devoid of digitization so far. Let us, therefore, consider some of the Internet projects that these companies have been pursuing and make a note of how they may benefit from these. Mutual fund investors could find investments in such organizations ideal.
Big Tech’s Internet Connectivity Projects
Facebook is building a massive underwater cable around Africa, in a bid to bring internet connectivity to the continent’s 1.3 billion people. The social media giant has partnered with companies such as China Mobile, South Africa’s MTN, France’s Orange and Britain’s Vodafone, apart from partnering with local network operators on the mission, dubbed 2Africa, according to a CNBC report.
Nokia-owned cable systems provider Alcatel Submarine Networks has been given the task of building the undersea cable. The cable is expected to be 37,000 kilometers or about 22,991 miles long. It will connect 23 countries in Africa, the Middle East and Europe, the social media giant said.
Coming to Alphabet, the company’s project for bringing Internet services to remote and rural areas could be a few weeks away from launching its first commercial service in Kenya. Project Loon, which utilizes high-altitude balloons to provide Internet connectivity, has been tested at length by the company. The project is part of Alphabet’s many “moonshot” projects that are moving toward offering real commercial services.
Equiano, another project by Alphabet’s Google, is also building a new subsea cable in order to connect Africa with Europe, as it increases its cloud computing infrastructure. According to Google, Equiano will be the first subsea cable to integrate optical switching at the fiber-pair level instead of the traditional approach of wavelength-level switching.
A contract to build the subsea cable with Alcatel Submarine Networks was signed in fourth-quarter 2018, Google said. The first phase of the project is expected to be completed in 2021. This connects South Africa with Portugal.
Amazon, on the other hand, is looking to offering a space-based web service. After all, the company has been paying particular attention to its space ventures over the past couple of years. Amazon’s Project Kuiper plans to launch more than 3200 satellites into space to offer low-cost Internet services around the world.
Global Digital Population as of April 2020
The number of active Internet users as of April 2020 was 4.57 billion, per a Statista report. The figure accounted for 59% of the world’s population. Considering in terms of countries, China, India and the United States had the highest number of Internet users.
3 Funds to Invest in Right Away
We have, therefore, selected three mutual funds that invest in some of the aforementioned companies. All of these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy). In addition, the minimum initial investment for these funds is within $5,000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Red Oak Technology Select Fund (ROGSX - Free Report) aims for capital growth over a long period. The fund invests the majority of its assets in securities of technology companies. Although the fund mostly invests in common stocks of American companies, it invests a lesser amount in securities of foreign issuers as well. Microsoft, Amazon.com, Alphabet and Intel are among the top holdings of the fund.
This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
ROGSX has an annual expense ratio of 0.95%, which is below the category average of 1.29%. It has returned 15.6% over three years. The fund has a minimum initial investment of $2000.
Putnam Global Technology Fund Class A (PGTAX - Free Report) aims for capital appreciation. The fund invests the majority of its assets in securities of large- and medium-capitalization companies in the technology space. PGTAX is a non-diversified fund. Microsoft, Adobe and Tencent are among its top holdings.
This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PGTAX has an annual expense ratio of 1.16%, which is below the category average of 1.29%. It has returned 20.2% over three years. The fund has a minimum initial investment of $500.
DWS Science and Technology Fund - Class A (KTCAX - Free Report) aims for capital growth. The non-diversified fund invests the majority of its assets in common stocks of companies in the arena of science and technology. Microsoft, Amazon.com and Facebook are among the top holdings of the fund.
This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
KTCAX has an annual expense ratio of 0.93%, which is below the category average of 1.29%. It has returned 19.3% over three years. The fund has a minimum initial investment of $1000.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.
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3 Funds Set to Gain From Big Tech's Internet Projects
Internet connectivity is imperative to the growth of businesses, be it brick-and-mortar or web-based services. This is why technology giants are making extreme efforts to bring the majority of the global population under the umbrella of digitization.
Big techs such as Facebook, Inc., Amazon.com, Inc. and Alphabet Inc., over the past few years, have been trying their best to bring about Internet access to remote and rural parts of the world, which have been devoid of digitization so far. Let us, therefore, consider some of the Internet projects that these companies have been pursuing and make a note of how they may benefit from these. Mutual fund investors could find investments in such organizations ideal.
Big Tech’s Internet Connectivity Projects
Facebook is building a massive underwater cable around Africa, in a bid to bring internet connectivity to the continent’s 1.3 billion people. The social media giant has partnered with companies such as China Mobile, South Africa’s MTN, France’s Orange and Britain’s Vodafone, apart from partnering with local network operators on the mission, dubbed 2Africa, according to a CNBC report.
Nokia-owned cable systems provider Alcatel Submarine Networks has been given the task of building the undersea cable. The cable is expected to be 37,000 kilometers or about 22,991 miles long. It will connect 23 countries in Africa, the Middle East and Europe, the social media giant said.
Coming to Alphabet, the company’s project for bringing Internet services to remote and rural areas could be a few weeks away from launching its first commercial service in Kenya. Project Loon, which utilizes high-altitude balloons to provide Internet connectivity, has been tested at length by the company. The project is part of Alphabet’s many “moonshot” projects that are moving toward offering real commercial services.
Equiano, another project by Alphabet’s Google, is also building a new subsea cable in order to connect Africa with Europe, as it increases its cloud computing infrastructure. According to Google, Equiano will be the first subsea cable to integrate optical switching at the fiber-pair level instead of the traditional approach of wavelength-level switching.
A contract to build the subsea cable with Alcatel Submarine Networks was signed in fourth-quarter 2018, Google said. The first phase of the project is expected to be completed in 2021. This connects South Africa with Portugal.
Amazon, on the other hand, is looking to offering a space-based web service. After all, the company has been paying particular attention to its space ventures over the past couple of years. Amazon’s Project Kuiper plans to launch more than 3200 satellites into space to offer low-cost Internet services around the world.
Global Digital Population as of April 2020
The number of active Internet users as of April 2020 was 4.57 billion, per a Statista report. The figure accounted for 59% of the world’s population. Considering in terms of countries, China, India and the United States had the highest number of Internet users.
3 Funds to Invest in Right Away
We have, therefore, selected three mutual funds that invest in some of the aforementioned companies. All of these funds carry a Zacks Mutual Fund Rank #1 (Strong Buy). In addition, the minimum initial investment for these funds is within $5,000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Red Oak Technology Select Fund (ROGSX - Free Report) aims for capital growth over a long period. The fund invests the majority of its assets in securities of technology companies. Although the fund mostly invests in common stocks of American companies, it invests a lesser amount in securities of foreign issuers as well. Microsoft, Amazon.com, Alphabet and Intel are among the top holdings of the fund.
This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
ROGSX has an annual expense ratio of 0.95%, which is below the category average of 1.29%. It has returned 15.6% over three years. The fund has a minimum initial investment of $2000.
Putnam Global Technology Fund Class A (PGTAX - Free Report) aims for capital appreciation. The fund invests the majority of its assets in securities of large- and medium-capitalization companies in the technology space. PGTAX is a non-diversified fund. Microsoft, Adobe and Tencent are among its top holdings.
This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PGTAX has an annual expense ratio of 1.16%, which is below the category average of 1.29%. It has returned 20.2% over three years. The fund has a minimum initial investment of $500.
DWS Science and Technology Fund - Class A (KTCAX - Free Report) aims for capital growth. The non-diversified fund invests the majority of its assets in common stocks of companies in the arena of science and technology. Microsoft, Amazon.com and Facebook are among the top holdings of the fund.
This Zacks Sector – Tech has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
KTCAX has an annual expense ratio of 0.93%, which is below the category average of 1.29%. It has returned 19.3% over three years. The fund has a minimum initial investment of $1000.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.
Get it free >>