Find out what the smart speaker race between Google, Amazon and Apple, rising Australian dollar and online luxury shift could mean for you and your investments. (Reading time 4:21 mins)

This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.

 

1. Are smart speakers the next smartphone?

The smart speaker trend has well and truly kicked off. It’s not only driving unprecedented growth in the consumer electronics industry, but also sparked a fierce competition between the world’s leading tech companies.

Amazon, Google, and Apple have all launched their own versions of AI-powered smart speakers, with the first two tech giants getting the head start on cornering the Australian market – even giving their respective voice assistants, Google Home and Amazon Echo, an Australian accent to help fit in.

What does this mean if you’re invested in technology companies?

When three of the world’s largest, most innovative tech companies all engaged in a battle over smart speakers, you know there is something important happening.

While smart speakers in the near term won’t provide much meaningful revenue to these tech giants, they have a longer-term play in mind.

We believe the smart speaker market is at a development stage comparable to where smartphones were at around 10 years ago. If smart speakers follow a similar trajectory, the market opportunity could be enormous.

The technology companies that can successfully deploy smart speakers into hundreds of millions, or even billions of homes over the next decade, will be in a very strong position to integrate themselves into nearly every aspect of their customer’s lives.

It is not just about playing music through them, it’s about conversing with these digital assistants to help get through your day-to-day life.

What does this mean if you’ve invested money with AtlasTrend?

Some of our funds are invested in Apple, Amazon and Alphabet (Google’s parent company), so your money is exposed to the potential growth in smart speakers.

We are working hard to develop our own AI assistant that you can talk to on various smart speakers and platforms. Stay tuned as we’re not far away from the launch.

 

 2. The Australian dollar gets pricey

Following strong gains in December and January, the Australian dollar traded above $0.81 versus the US dollar for the first time in two and a half years.

The rising dollar has caught some in the market by surprise, with many people questioning whether this is the start of longer term strength in the Australian dollar or the result of just some short-term factors.

What does this mean if you’re invested in the global stock market?

An appreciating Australian dollar typically means any investments denominated in an overseas currency (such as the US dollar) is worth less in Australian dollar terms.

This happens even if the higher Australian dollar has no impact on the operations of the overseas shares you may have invested in – it’s simply a change in currency value. The reverse is also true, of course.

If the Australian dollar drops, your international investments tend to be worth more measured in Australian dollars. We believe the high Australian dollar in recent months has been caused by short-term factors, particularly weakness in the US dollar.

From our perspective, the current economic indicators in Australia and globally don’t really support an Australian dollar exchange rate over US$0.80. We believe other developed economies (like the US) are poised to keep raising interest rates, while Australia is not likely to do so.

What does this mean if you’ve invested money with AtlasTrend?

All of the AtlasTrend managed funds have some cash holdings, which allows the investment team to actively take advantage and buy shares for the funds when they are at attractive prices.

The cash holdings to date have been held in Australian dollars. With the appreciation in the Australian dollar, this allows for more purchasing power of overseas shares – these shares effectively become “cheaper” in Australian dollar terms.

As a result, our investment team are actively looking to buy more shares for the managed funds to take advantage of the high Australian dollar.

 

 3. Luxury retail gets the online treatment

Richemont, the owner of luxury brands such as Cartier and Montblanc, is buying the rest of Yoox Net-a-Porter it doesn’t already own for 2.6 billion euros.

Yoox Net-a-Porter owns popular online sites for luxury shoppers, including online sales platforms for 40 other luxury labels. Richemont gains a digital edge from the deal as Yoox has the technology and logistics capabilities to help luxury brands sell their goods online.

What does this mean if you’re invested in the luxury retail sector?

As with most other retail categories, luxury goods are not immune to consumers shifting their shopping habits online.

The early days of online shopping were driven by low-cost items such as books and CDs – goods you could purchase without worrying about size or aesthetics. Nowadays, consumer have enough trust to spend hundreds or even thousands of dollars purchasing a luxury item online.

Luxury retailers can no longer just depend on immaculate store fit-outs in prime locations; a sophisticated online presence is now mandatory.

This is a salient lesson for all other retailers. If luxury goods are quickly migrating to an e-commerce model, we believe there are no other material categories of retail goods which can avoid the accelerating shift to online retailing.

What does this mean if you’ve invested money with AtlasTrend?

The AtlasTrend Online Shopping Spree Fund is invested in Yoox Net-A-Porter. Richemont offered to buy out remaining Yoox Net-A-Porter shares at 26% higher price than what they were trading at.

As a result, this has helped contribute to a very strong month of investment performance for the Online Shopping Spree Fund with official investment returns available next week.

 

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About Kent Kwan

Kent Kwan is a Co-Founder of AtlasTrend, an online investment platform that makes it easy for anyone to learn and invest in trends transforming our world. Kent has over 15 years experience in financial markets including as Chief Investment Officer at Arowana International Limited, and roles at JP Morgan and Macquarie.