Tech companies will need to ‘hold their own’ to challenge leaders
Emerging technology companies will have to hold their own if they wish to challenge dominant players such as Facebook as the technology sector sees more and more acquisitions.
Launching a technology ETF which tracks the FANG+ index, the firm said there had been little change in the large technology companies listed covered by the FANG+ index, with no new companies added since the index launched in 2017.
This was because any smaller players were being acquired by their rivals such as Facebook acquiring Whatsapp and Instagram while Google has made over 200 acquisitions, the most well-known being the acquisition of YouTube in 2006.
The 10 companies in the FANG+ index, which the ETF Securities ETF tracks, were Facebook, Apple, Amazon, Netflix, Google, Alibaba, Baidu, Nvidia, Tesla and Twitter.
Cliff Man, co-head of portfolio construction at ETF Securities, said: “We would welcome new entrants to the index.
“There is a lot of acquisition, but companies can always reject their advances and choose to forge their own path. One example would be Australian technology firm Atlassian. If anything it would show they belong on the index because they have been able to shoulder their way in.”
NASDAQ-listed software developer Atlassian, which was founded in Sydney in 2000, was now valued at $40 billion and had over 3,000 employees.
The firm said the major themes in technology were online trade, entertainment and storage as well as next generation vehicles via Tesla.
A big trend was the advancement of artificial intelligence to replace the work of humans which was expected to become more prevalent in usage in the future.
“We will see the use of artificial intelligence becoming more obvious as robots gain acceptance. We are not there yet but in 10 years’ time or so then people will have become more accepting,” said ETF Securities chief executive Kris Walesby.
AUTHOR
Laura Dew
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
