Predict the Wave of the Future with This Quantum ETF

Investors are often interested in finding the “next big thing” before it becomes huge.

Successfully predicting the next trends in markets can potentially offer windfalls — consider, for example, the results of investing in Google in 2004. Although an ETF might not produce massive results in the way a single company stock can, it could still be immensely profitable if one can determine what is coming. One industry that could potentially blossom into something very important forms the thesis of the Defiance Quantum ETF (QTUM).

This exchange-traded fund invests in companies involved with quantum computing and machine learning. These technologies have been finding profitable uses in recent years, and their importance only seems to be increasing thus far. The fund can hold companies involved in quantum computing development, application, interfacing with traditional computers and the supply chain, for creating materials such as semiconductors that are involved with quantum computing.

The fund’s holdings are equal-weighted, providing even exposure without regard for market cap.

In the last year, QTUM is down 11.07%, which puts its performance close to that of the S&P 500, but, notably, above that of the tech-saturated Nasdaq. Net assets of just $109 million make it a relatively small fund, but it offers enough liquidity to make it a viable investment vehicle. The fund offers a small yield of 1.30% and a middling expense ratio of 0.40%.

Chart courtesy of www.StockCharts.com

QTUM’s portfolio is primarily U.S.-based, but also offers some international exposure. About 60% of assets are invested in U.S. companies, with the remainder allocated to a variety of stocks based in countries that most prominently include Japan, Taiwan, China, France and the Netherlands.

Some notable names among QTUM’s holdings are NVIDIA Corp. (NVDA), Cirrus Logic (CRUS), Baidu Inc. (BIDU), Advanced Micro Devices (AMD) and Microsoft Corp. (MSFT), but there are plenty of non-household names in the portfolio as well.

For investors looking to find the next wave before it really gets going, Defiance Quantum ETF (QTUM) offers an investment that provides such an opportunity.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.