Have you ever wondered how the connected car market might stack up if you look at it as a financial investment opportunity? Well, there’s actually an index, created by a company called Motif Investing, that can help answer that question.
A Motif is a thematic way of investing. The programs allow for investors to create their own themes or select from those that already exist, and a connected cars index happens to be one that already exists. The topic of connected cars is hot: so why not an investment portfolio to go with it? According to Gartner, one in five cars will be equipped with wireless connectivity and real-time analytics by 2020. And a report issued by RBC Capital Markets in early 2014 predicted that the average spend on semiconductor components would rise from $320 to $400 over the next few years.
The connected car Motif was only initiated in the fall of 2014, but you can see in the chart below that during this short time it has outperformed the S&P500. 
So what goes into the mix of a connected car portfolio? Covering a wide variety of vendors that contribute to the connected car functionality, the portfolio includes topics such as safety systems, systems-on-a-chip, connectivity, sensors, infotainment and display, navigation systems, memory solutions, and software services. 
Some of the participating companies are very well-known names and others are specific to this industry. Overall, the performance is more positive than negative. There are 25 stocks in the Motif and their detailed performance can be seen at the link provided above.
I thought this was an interesting note to end the week on. Might get some investors thinking over the weekend about how to put their money where their market insights are.
Happy Freitag!
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Claudia Bacco, Managing Director – EMEA for RCR Wireless News, has spent her entire career in telecom, IT and security. Having experience as an operator, software and hardware vendor and as a well-known industry analyst, she has many opinions on the market. She’ll be sharing those opinions along with ongoing trend analysis for RCR Wireless News.
