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5 Most-Crowded Trades & Their Winning ETFs

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The tech sector has been a winning area since last year due to rising demand for work and learn from home amid the COVID-19 outbreak. In any case, the decade-long cheap money inflows and global economic improvement (before the virus outbreak) made growth stocks and the tech-heavy ETF winners last decade.

Rising consumer spending on technology, a 5G boom, expectations of higher smartphone sales and the coronavirus-induced social distancing propelled the tech and semiconductor space. Amid the several fields of technology, disruptive hold huge promise.  

This is because emerging technology that transforms major industries and radically impacts the society has often created enormous wealth building opportunities. No wonder, several disruptive technology areas are emerging as the most-crowded trades. Below we highlight a few of them:

Efficient Energy

Ownership of renewable energy stocks is extremely crowded, per the index provider MSCI.President Biden has expansionary plans for clean energy. He has a plan — a Clean Energy Revolution — to address the issue of climate emergency. He sees America as becoming a 100% clean energy economy by 2035 and having net zero emission by 2050. So, his win favored the clean energy rally. Moreover, clean energy is getting increasing acceptance globally. iShares Global Clean Energy ETF (ICLN - Free Report) is a good pick out here (read: A Complete Guide to Clean Energy ETFs).

Cyber Security

The rampant usage of Internet has raised the risk of cyber threats. In case of work from home, proprietary business data is being accessed from personal computers and laptops that may not have the same level of security as in-office setups. Public-sector organizations are facing massive problems. No wonder, cyber security stocks are good bets. First Trust NASDAQ Cybersecurity ETF (CIBR - Free Report) tracks the performance of companies engaged in the cybersecurity segment of the technology and industrial sectors.

Future Education

The vast online application of educational technology during these trying times is perhaps the largest in history wherein school administrators and teachers are making utmost efforts to utilize the right technologies to ease the transition from classroom to home. This makes this category a crowded trade and EDUT is a good pick.

Global X Education ETF (EDUT - Free Report) allows investors to access long-term growth potential through companies that are broadening access to education around the world (read: Inside the New Education ETF Launched by Global X).

Future Mobility

With automation and technological breakthrough emerging rapidly, a fast pickup in electric vehicles is in the cards. There has been a global drive on auto manufacturers to cut CO2 emission. The very move to bolster clean energy has led to auto manufacturers’ shift from ICE to EV. Europe and China have apparently been leading the way in CO2 emission, thus promoting EV sales.

Autonomous & Electric Vehicles ETF (DRIV - Free Report) seeks to invest in companies involved in the development of autonomous vehicle technology, electric vehicles (“EVs”), and EV components and materials.  This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt (read: Guide to Electric Vehicle ETFs).

Robotics

Due to the coronavirus outbreak, the robotics market is flooded with opportunities as robots are being used for jobs such as sanitizing hospitals, homes and workplaces along with monitoring, surveying, handling, and delivering food and medicines. The current conditions seem favorable for the robotic markets in government applications such as health, security and defense. Also, with the reopening of the U.S. economy, it is believed that robots will see increased usage in industrial, manufacturing, healthcare, logistics, inspection and maintenance, automotive, electronics, and food and beverage areas. 

This is making funds like BOTZ an attractive investment option. Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ - Free Report) invests in companies that potentially stand to benefit from increased adoption and utilization of robotics and artificial intelligence, including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.

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