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The Next Big Theme: December 2023

Dec 19, 2023

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E-commerce & FinTech

Holiday Spending Trends Unwrapped

A record-breaking 200.4 million American consumers participated in shopping activities from Thanksgiving to Cyber Monday, including a substantial consumer shift towards digital platforms.1 This activity surpassed last year’s figures and significantly exceeded initial projections.2 U.S. consumers spent a record $12.4 billion on Cyber Monday alone, with overall online sales during Cyber Week increasing 5% year-over-year (YoY) to an impressive $70.8 billion.3 Data from Cyber Week 2023 showed global sales rose 6% YoY to $298 billion.4 Increased adoption of Buy Now, Pay Later (BNPL) options and mobile wallets were notable trends. BNPL orders in the U.S. increased 8% YoY, illustrating the growing consumer preference for flexible payment methods amid economic pressures.5 U.S. mobile wallet usage, boosted by Apple Pay in particular, rose 54%, reflecting a shift towards more convenient and frictionless payment methods.6

Amazon marked its “biggest ever” holiday shopping event with over 1 billion items sold, highlighting the strength of its extended promotional strategies and the consumer appeal of its product offerings, notably in electronics and personal care.7   

Health & Wellness

Pharmaceuticals Reshape Obesity and Weight-Loss Treatments

The Food and Drug Administration’s (FDA) recent approval of Eli Lilly’s Zepbound™ (tirzepatide) is a major step in chronic weight management.8 In clinical trials, Zepbound demonstrated substantial weight loss, with the highest dose leading to an average loss of 48 pounds.9 This drug is the first approved treatment that activates two incretin hormone receptors, GIP and GLP-1, to address an underlying cause of excess weight.10 To promote its weight-loss drugs Wegovy and Saxenda, Novo Nordisk paid U.S. medical professionals $25.8 million in fees and expenses between 2013 and 2022.11 The drugs mimic a natural hormone that slows digestion and makes patients feel fuller. Wegovy shows 15% average weight loss in trials.12 Roche’s acquisition of Carmot Therapeutics for $2.7 billion marks its entry into the weight-loss space, gaining access to promising GLP-1 receptor agonists.13 Carmot’s lead asset, CT-388, demonstrated significant weight loss in Phase Ib studies.14 Roche also obtained CT-868 and CT-996, expanding its scope to address obesity and potentially conditions such as cardiovascular and neurodegenerative diseases.15

Cybersecurity

Transatlantic Synergy in Cybersecurity Efforts

The Cyber Resilience Act (CRA) in the European Union and the Federal Cybersecurity Workforce Expansion Act in the United States represent pivotal steps in enhancing cybersecurity at the government level. On the cusp of adoption, the CRA is set to improve the security of digital products in the EU.16 It mandates comprehensive cybersecurity requirements for the manufacturers of connected devices, emphasizing robust security measures throughout the lifecycles of hardware and software products​.17 In the U.S., the Federal Cybersecurity Workforce Expansion Act aims to establish a registered apprenticeship program within the Cybersecurity and Infrastructure Security Agency and a pilot program for veterans’ cybersecurity training through the Department of Veterans Affairs.18 This initiative is a strategic response to the increasing demand for skilled cybersecurity professionals.

On the corporate front, the expanded partnership between IBM Consulting and Palo Alto Networks exemplifies the private sector’s proactive stance on cybersecurity.19 This collaboration is designed to strengthen clients’ overall security postures in the evolving landscape of cybersecurity threats.

CleanTech

UAE Spearheads Climate Fund Alterra

The United Arab Emirates, the host of the COP28 climate summit, launched a landmark initiative in the battle against climate change with the Alterra climate fund.20 Backed by a $30 billion commitment from the UAE and in partnership with global asset management giants BlackRock, Brookfield, and TPG, the new fund aims to attract over $250 billion in investments by 2030 and set a new standard in climate investment.21 Core to Alterra’s strategy is to direct investments into clean energy advancements and climate mitigation projects for the developing world and emerging economies. The fund already achieved a key milestone by earmarking funds for more than 6 gigawatts of clean energy initiatives in India.22 This strategy is pivotal not just for climate change mitigation but also for the sustainable development of these regions. It also shows the growing global consensus on the critical need for these investments.

Defense Tech & Artificial Intelligence

The DoD’s Comprehensive AI Integration Strategy

The U.S. Department of Defense (DoD) is strategically incorporating artificial intelligence (AI) into military operations. A prime example is the “Digital On-Demand” initiative led by the Chief Digital and Artificial Intelligence Office (CDAO) in collaboration with online learning platform MIT Horizon.23 This program aims to boost AI literacy across the DoD and ensure its seamless integration into defense strategies. The U.S. Air Force and Space Force are intensifying efforts to integrate AI and machine learning into decision-making processes as part of a broader modernization initiative.24

Notable recent partnerships include RTX’s Raytheon BBN Technologies unit securing an $8 million contract with the DoD to develop a supply chain simulator, utilizing predictive analytics to enhance the resilience of defense logistics networks.25 In the private sector, Northrop Grumman and Rohde & Schwarz have a Memorandum of Understanding (MOU) to develop resilient communication systems across Europe. This collaboration extends to technologies enhancing interoperability between 5th and 4th generation aircraft, connecting assets across multiple domains.26

Social Media

Digital Ad Growth Defies 2023 Odds

Global advertising revenue for 2023 is forecast to increase a significant 5.8% YoY to approximately $889 billion, in line with midyear projections.27 A surge in digital advertising spending is a significant factor in this growth. In particular, pure-play digital advertising, which includes popular platforms like YouTube and TikTok but excludes areas like connected-TV and digital out-of-home advertising, is forecast to end the year up 9.2% YoY, surpassing earlier expectations.28 By 2028, this segment is expected to eclipse the size of the entire advertising industry as it stood in 2022.29 The increasing popularity of short-form video content and e-commerce marketplace ads is a major reason. Short-form video platforms have emerged as a highly engaging medium for advertisers, offering creative ways to capture audience attention. E-commerce marketplace ads also offer advertisers direct channels to target consumers effectively.

THE NUMBERS

The following charts examine returns and sales growth expectations by theme, based on their corresponding ETFs or indices.

INTRO TO THEMATIC INVESTING COURSE – ELIGIBLE FOR CE CREDIT

Global X has developed an interactive, self-guided Intro to Thematic Investing course, that is designed to share the latest ideas and best practices for incorporating thematic investing into a portfolio.

This program has been accepted for 1.0 hour of CE credit towards the CFP®, CIMA®, CIMC®, CPWA®, or RMA certifications. To receive credit, course takers must submit accurate and complete information on the requested forms, complete the entire course, and receive a 70% or higher on the Intro to Thematic Investing Quiz.

For Canadian course takers: This program has been reviewed by FP Canada and qualifies for 1 FP Canada-Approved CE Credit, in the category of Product Knowledge, towards the CFP® certification or QAFP™ certification. To receive credit, course takers must submit accurate and complete information (including Job Title) on the requested forms, complete the entire course, and receive a 70% or higher on the Intro to Thematic Investing Quiz.

Questions on receiving CE credit may be sent to: Education@globalxetfs.com

KEEP UP WITH THE LATEST RESEARCH FROM GLOBAL X

To learn more about the disruptive themes changing our world, read the latest research from Global X, including:

ETF HOLDINGS AND PERFORMANCE:

To see individual ETF holdings and current performance across the Global X Thematic Growth Suite, including information on the indexes shown, click these links:

Appendix: Thematic Expected Sales Growth Graph Indices

AgTech & Food Innovation: Solactive AgTech & Food Innovation Index

Aging Population: Indxx Aging Population Thematic Index

Artificial Intelligence & Technology: Indxx Artificial Intelligence & Big Data Index

Autonomous & Electric Vehicles: Solactive Autonomous & Electric Vehicles Index

Blockchain: Solactive Blockchain Index

Cannabis: Cannabis Index

China Biotech Innovation: Solactive China Biotech Innovation Index

Clean Water: Solactive Global Clean Water Industry Index

CleanTech: Indxx Global CleanTech Index

Cloud Computing: Indxx Global Cloud Computing Index

Cybersecurity: Indxx Cybersecurity Index

Data Center REITs & Digital Infrastructure: Solactive Data Center REITs & Digital Infrastructure Index

Defense Tech: Global X Defense Tech Index

Disruptive Materials: Solactive Disruptive Materials Index

E-Commerce: Solactive E-commerce Index

FinTech: Indxx Global FinTech Thematic Index

Genomics: Solactive Genomics Index

Green Building: Solactive Green Building Index

Health & Wellness: Indxx Global Health & Wellness Thematic Index

Hydrogen: Solactive Global Hydrogen Index

Internet Of Things: Indxx Global Internet of Things Thematic Index

Lithium & Battery Technology: Solactive Global Lithium Index

Metaverse: Global X Metaverse Index

Millennial Consumer: Indxx Millennials Thematic Index

PropTech: Global X PropTech Index

Renewable Energy Producers: Indxx Renewable Energy Producers Index

Robotics & Artificial Intelligence: Indxx Global Robotics & Artificial Intelligence Thematic Index

Social Media: Solactive Social Media Total Return Index

Solar: Solactive Solar Index

Telemedicine & Digital Health: Solactive Telemedicine & Digital Health Index

U.S. Infrastructure: Indxx U.S. Infrastructure Development Index

Video Games & Esports: Solactive Video Games & Esports Index

Wind Energy: Solactive Wind Energy Index

Category: Articles

Topics: Consumer Economy, Disruptive Technology, Infrastructure & Environment, Technology

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Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Beginning October 15, 2020, market price returns are based on the official closing price of an ETF share or, if the official closing price isn’t available, the midpoint between the national best bid and national best offer (“NBBO”) as of the time the ETF calculates current NAV per share. Prior to October 15, 2020, market price returns were based on the midpoint between the Bid and Ask price. NAVs are calculated using prices as of 4:00 PM Eastern Time. The returns shown do not represent the returns you would receive if you traded shares at other times.

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