• ETF Insights

    Why the ‘Smart Home’ Takes Investment Back to the Future

    Martijn Rozemuller, CEO – Europe

    Growing up in the 1970s and 1980s, I loved reading science fiction. The novels of Isaac Asimov, the celebrated writer, were the best, in my opinion. Among other classics, he wrote the Robot stories that introduced the concept of ethics for robots and intelligent machines, also coining the term robotics.

    Forty years later, much of his fiction is becoming fact. Intelligent machines have entered our homes and workplaces – whether in the form of virtual assistants for the house, smart bots in call centers or AI factory robots.

    It’s true to say that technology’s unprecedented advances make today a hinge moment in history, and the emerging ‘smart home’ is a place where these technologies converge. From an investor’s point of view, that could mean the smart home is a megatrend that brings it all together, leading to tech growth opportunities.

    In a trend that was boosted by the pandemic, where we live is becoming a hub for all of our activities. Think beyond robots to a smart home that’s constantly connected to the world outside: from leisure, to work, education, health and so on.

    $830 billion in value by 2030

    Whether it’s working-from-home, virtual workouts, entertainment, delivery services, online shopping, or even telemedicine, many areas of life are increasingly being brought from the ‘outside’ world into our homes. To give an idea of the smart home’s growth, the value of Internet of Things adoption in the home is forecast to grow from $440 billion in value globally today to $830 billion by 2030, according to the McKinsey consultancy.1

    That captures the home’s use of 5G connectivity and the emergence of the Metaverse virtual world, with devices ranging from smart furniture, to energy management and virtual healthcare. But it does not cover the full picture: for instance, some homes will increasingly generate their own power through solar panels and heat pumps.

    To capitalize on this surge in intelligent innovation, VanEck’s new Smart Home Active ETF backs many of the businesses driving the home’s evolution. These span businesses from many parts of this ecosystem – or galaxy in science fiction parlance. Consider Meta, the parent of Facebook; Crowdstrike, the cyber security company; or Teladoc Health, a telehealth business.

    Our first active ETF

    As technologies evolve faster than ever before, so the smart home will develop in ways we can’t imagine. Quantum computing, artificial intelligence, robotics and others technologies will interact and influence each other. That’s why this is our first active ETF, advised by Dasym, the Dutch research-driven investment company with a deep understanding of how technology and the consumer interact.

    While much of Asimov’s fiction was based in outer space, a big difference today is that blue-sky technologies are entering our homes. It’s a remarkable time, when new inventions and businesses look set to transform our worlds.

    1The Internet of Things: Catching up to an Accelerating Opportunity.

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