There are exchange-traded funds offering exposure to old guard media companies and, of course, there are social media ETFs, but with the advertising and media landscapes rapidly evolving, shouldn't there be an ETF for that trend?
What Happened: Now there is thanks to the Monday debut of the SmartETFs Advertising & Marketing Technology ETF MRAD.
“The principle investment objective of the ETF is to invest in companies which are using technology to disrupt traditional advertising and marketing industries by using programmatic advertising, targeted digital advertising, consumer data and targeting, customer relationship management, marketing automation, and other technologies that aid in advertising and marketing,” according to SmartETFs.
Why It's Important: Managed by Sagar Thanki, MRAD is an equal-weight ETF that will generally hold up to 30 positions. Within in MRAD, the definition of advertising is broad and includes online, print and out of home advertisers.
“MRAD also invests in companies that provide, support, or enable increased marketing efficiency and/or personalization. This can include companies that increase the efficiency of the production of marketing materials as well as companies that enhance the customer experience through automation or personalization,” according to the issuer.
MRAD is also geographically diverse as its roster includes China's Baidu BIDU and Russia's Yandex YNDX, among other international names. Alphabet GOOG and Atlassian TEAM are among the well-known U.S.-based names in the new ETF.
What's Next: MRAD is a play on a growth segment and data confirm as much.
“It was calculated that the digital advertising spending worldwide amounted to 325 billion U.S. dollars in 2019 and that after a drop in 2020 due to the coronavirus related market issues, it would grow to 389 billion dollars in 2021,” according to Statista.
MRAD's exposure to digital and mobile advertising is also potentially compelling for long-term investors.
“Digital advertising spending worldwide – which includes both desktop and laptop computers as well as mobile devices – stood at an estimate at 194.6 billion U.S. dollars in 2016. This figure is forecast to constantly increase in the coming years, reaching a total of 335 billion U.S. dollars by 2020,” notes Statista.
MRAD charges 0.79% per year.
The other funds in the SmartETFs stable are the SmartETFs Smart Transportation & Technology ETF MOTO and the SmartETFs Sustainable Energy ETF SULR.
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