An Asian Buffet, the Internet, and Coffee: Three of my favorite things. And this month, they’re our favorite sectors too.
For a vast number of people in the world, every day starts out with a cup of coffee and checking Facebook, and maybe even a post on Facebook about their coffee.
Between a Starbucks on every corner of the globe and the convenience of the Keurig, Americans are drinking more coffee than ever. It’s a fact, global demand for coffee is headed toward record levels this year, and supply is having a hard time keeping up. Other commentators have recently noted that “stockpiles at warehouses monitored by ICE have dropped for 11 straight quarters” and that weather conditions have hurt Brazil’s coffee crop this year. This sets the stage for a classic supply-and-demand increase in prices. So one of our top picks this month is the iPath Bloomberg Coffee ETN (JO).
Another sector to love is the First Trust Dow Jones Internet ETF (FDN). This fund’s largest holding is Facebook (FB) with a weight of over 10%. Just a few years ago, the consensus was that Google would continue to be the leader in online Display Ad Revenues. More recent studies show that Facebook has surpassed Google and continues to take market share each year as Facebook Ads have become a central part of many business’ marketing strategies. As we head into the Fall and Winter seasons, it’s our opinion that businesses will begin to ramp up these ad campaigns and Facebook will see a wave ad spending inflows. And as investors begin to anticipate this, we think it creates a positive outlook for this fund.
And lastly, we like the Asian ‘buffet.’ By this we mean that we like a whole smorgasbord of Asia-based ETFs including the iShares MSCI South Korea (EWY), the iShares MSCI Hong Kong (EWH), the India Fund Inc (IFN), and the VanEck Vectors Russia ETF (RSX). And what’s not to like? If interest rates are raised, that will likely strengthen the dollar, which will likely, in turn, boost the exports and economies of many of these Asian countries.
And what could be more unnerving than fretting about the uncertainty of US presidential elections? This month we’ll just take a vacation from the US and not worry about it, and maybe go find a real Asian buffet instead. Let’s eat!
The commentary included in this blog is provided for informational purposes only. It does not constitute a recommendation to invest in any specific investment product or service. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.