This Fund Has a History of Beating the Market

Last week, I shared an unorthodox investment strategy when it comes to the auto industry. If you recall, auto sales rebounded in 2023. And experts have forecasted another banner year in 2024. I mentioned this as great news for technology investors. Why? Because rather than gamble on a specific car maker, I recommended that we […] You're receiving this email as part of your subscription to Michael Robinson’s Trend Trader Daily [Unsubscribe](. [Trend Trader Daily] This Fund Has a History of Beating the Market January 09, 2024 [Last week]( I shared an unorthodox investment strategy when it comes to the auto industry. If you recall, auto sales rebounded in 2023. And experts have forecasted another banner year in 2024. I mentioned this as great news for technology investors. Why? Because rather than gamble on a specific car maker, I recommended that we invest in a company that supplies key technology to nearly every automaker in the industry. That company was Qualcomm (Nasdaq: QCOM), the maker of tiny semiconductors that are central to almost everything tech-related in your car or truck. The thing is, Qualcomm is a hardware business. And as I see it, that’s only one side of the tech-investing equation. Now let’s take a look at the other side... Software Plays a Major Role Hardware companies are important. And they play a key role in driving technology forward. But the products these companies manufacture would be little more than expensive paper weights without the proper software to go with them. A recent report from Gartner forecasts that 2024 will be a big year for software sales. Gartner notes that Artificial Intelligence, cloud-computing, and cybersecurity — all software-centric areas — will see expansion this year, which makes software a target-rich environment. In a situation like this, it pays to target as much of the software industry as we can. And fortunately, we don’t have to invest in dozens of individual companies to do that effectively. All we have to do is look at an exchange-traded fund (ETF) that captures the waterfront of software’s continued growth in a single investment... One Investment, Multiple Companies That’s possible with the iShares Expanded Tech-Software Sector ETF (BATS: IGV). This ETF holds dozens of stocks and boasts a modest expense fee of 0.41%. IGV holds an interesting blend of stable large-cap stocks, including Microsoft (MSFT) and Oracle (ORCL), as well as lesser-known firms among retail investors. Under-the-radar holdings include: - Palantir Technologies (PLTR) is a small-cap pioneer in AI-driven software and solutions with a strong hook in government contracts. Offerings from this savvy growth firm cover a range of applications and sectors — everything from defense to anti-money laundering to intelligence and telecommunications. - Cadence Design Systems (CDNS) is the clear leader in a field of known as electronic design automation (EDA). The company handles the core development work for its clients’ chips, printed-circuit boards, and related hardware systems. This is a great double-play. CDNS is a leader in providing software for the booming semiconductor industry and is now using generative AI to help its client build more robust chips. Founded in 1988, the Silicon Valley firm has granted software licenses to roughly 200 firms and counts seven of the top 10 semiconductor makers as clients. - Autodesk (ADSK) ranks as a global leader in a field known as CAD/CAM, short for Computer Aided Design/Computer Aided Modeling. Among other things, its software provides very complex three-dimensional views for product designers. Autodesk has remained a favorite among architects, designers, and engineers for years. Seventy percent of the company’s business comes from 3D-design software in that market. Its cloud-based platform is used to virtually design buildings, bridges, roads, cars, and even smartphones. - Palo Alto Networks (PANW). This firm offers a range of cybersecurity tools and solutions, including network hardware with built-in security and sophisticated software tools to prevent attacks and help repair damage. What sets Palo Alto Networks apart from other cybersecurity companies, however, is its focus on helping organizations with huge and complex networks too difficult for people to fully grasp. The company has developed its Cortex cloud cybersecurity AI, which constantly scans a company’s networks for any signs of intruders. - Adobe (ADBE). Most investors know of Adobe as the maker of software that creates the popular PDF files. Turns out, Adobe also is the world leader in software for designers, artists, and illustrators. These are complex packages with millions of lines of code that take up a lot of computer space. The company is highly regarded for such products as Illustrator for creating, editing, and managing graphics, and Photoshop for managing and editing pictures, now available via the cloud. A History of Beating the Market As you can see, IGV covers a lot of ground in a single, cost-effective investment. And it has a history of beating the overall market. Over the past five years, the S&P 500 has returned a respectable 73%. IGV, in contrast, has delivered gains of more than 100%. This is a great foundational play that will continue to perform in the kind of volatile markets we see today. That means you can ignore the market’s ups and downs as you steadily build your net worth by investing in a key part of technology’s path forward. Cheers and Good Investing, [Michael Robinson] Michael Robinson Chief Investment Officer Trend Trader Daily   Copyright © Trend Trader Daily, All rights reserved. You signed up on []( Our mailing address is: Trend Trader Daily 1125 N. Charles Street Baltimore, Maryland 21201 [Update Subscription Preferences]( | [Unsubscribe from this list]( RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. Please use this research for the purpose that it's intended — as research only. You should consult a professional financial advisor before ever taking a position in any securities you see herein. DISCLAIMERS: The work included in this communication is based on diverse sources including SEC filings, current events, interviews, corporate press releases, and information published on funding platforms, but the views we express and the conclusions we reach are our own. 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