INVESTING IN THE TECHNOLOGY & INTELLIGENCE REVOLUTION - Benchmark Investments
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SRVR
INVESTING IN THE TECHNOLOGY
& INTELLIGENCE REVOLUTION
INDEX
WHY SRVR INDEX? FOUNDATION OF TECH Our economy depends on an increasingly sophisticated backbone of servers, fiber optic cable, satellites and network switches to move their critical information and analytic algorithms in and out of the citadels of digital power including data centers, wireless towers, and fiber optic networks.
THINK ABOUT IT:
What we're seeing is a transition, the
beginning of an S curve of growth for
the data center industry
DAVE CROWLEY, MICROSOFT CHIEF TECHNICAL ADVISOR
SRVR INDEX 55 Billion Internet of Things
Devices by 2025
UNPRECEDENTED 90% of IoT Workloads will be
DEMAND deployed in Cloud by 2020
4000 Data Centers needed by
2020 to meet current demand
Cisco predicts by 2021 that 94%
of all compute workloads will
be by cloud data centers
The cloud accounts for only 5%
of the $3.7 trillion spent on IT
around the world
SRVR INDEX: FUTURE FOUR HORSEMEN
VIRTUAL REALITY / BLOCKCHAIN / THE INTERNET
ARTIFICIAL
AUGMENTED DISTRIBUTED OF THINGS
INTELLIGENCE
REALITY LEDGERS
Amazon’s Cloud Pokemon Go got 50 Equifax will not be hacked Autonomous driving
brought on over million users in 19 going forward if they use vehicles, watches,
80,000 databases for days multiple cloud datacenters to refrigerators are going to
AI last quarter validate user permissions lead to unparalleled
connectivity as we already
have more than four
billion internet users
globally
American Tower CEO on
SRVR INDEX: 5G / INTERNET OF THINGS their impressive growth
rate and why they beat
earnings last quarter:
“Unlimited data plans and
increasing mobile video
consumption continue to drive
additional spectrum
deployment and equipment
installations by our domestic
tenants to support 4G network
technology and that's leading
to those elevated growth rates.”
“Moreover, our major U.S.
customers are beginning to
embark on tangible plans for 5G
technology …”
INVESTMENT RESULTS
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS.
It is not possible to invest directly in an index. Exposure to an asset class
represented by an index is available through investable instruments based on that
index.
Presentations are communication tools that can be
Benchmark Investments does not sponsor, endorse, sell, promote or manage any
used as demonstrations, lectures, speeches, reports,
investment fund or other investment vehicle that is offered by third parties and
and more. Most of the time, they’re presented
that seeks to provide an investment return based on the performance of any index.
before an audience.
Please refer to the disclaimers at the end of this document for more information
about Benchmark Investments relationship to such third party product offerings.
Portfolios & Strategies
SRVR XLK SPX
Benchmark Data & Infrastructure
Technology Select Sector SPDR Fund S&P 500 Index
Real Estate SCTR Index
Seeks to provide exposure to the The S&P 500 Index is a diversified
Measures the performance of
Technology Select Sector Index which large cap U.S. index that holds
exchange listed companies in the U.S.
seeks to provide precise exposure to companies across all eleven GICS
that primarily are engaged in
companies from technology sectors. It is a market-capitalization
businesses within the following
hardware, storage, and peripherals; weighted index of the 500 largest
business lines: (i) Data storage and
software; communications U.S. publicly traded companies by
information management services
equipment; semiconductors and market value, The index is widely
including record management, data
semiconductor equipment; IT services; regarded as the best single gauge of
management, document
and electronic equipment, large-cap U.S. equities.
management, and data centers (ii)
instruments and components.
General Infrastructure & Outdoor
Media including fiber cables, wireless
infrastructure, telecommunications
towers, and outdoor media sites.
Market Exposures SRVR INDEX TOP TEN XLK TOP TEN Source: Bloomberg Time Period: 1/12/2019
SRVR INDEX: APPLE REINVENTS
WATERSHED MOMENT THE PHONE WITH
IPHONE
PRESS RELEASE
January 9, 2007
TOTAL RETURNS SINCE 2007
MACWORLD SAN FRANCISCO
iPhone will be available in the US in
June 2007
iPhone is a Breakthrough Internet
Communications Device
iPhone also ushers in an era of
software power and sophistication
never before seen in a mobile
device, which completely redefines
what users can do on their mobile
phones
Time Period: 1/1/2007 to 1/11/2019SRVR INDEX THE START OF CLOUD
WATERSHED MOMENT COMPUTING
In 2012, the biggest thing to
TOTAL RETURNS SINCE 2012 happen to the cloud was the arrival
of three major new IaaS
(infrastructure as a service) players:
Google Compute Engine, HP Cloud,
and Microsoft Windows Azure
All three entrants faced an uphill
battle competing against the
incumbent leader Amazon Web
Services and even against
Rackspace, long the distant No. 2
IaaS provider.
Time Period: 1/1/2012 to 12/31/20187 YR ANNUALIZED SRVR INDEX 14.57
RETURNS Benchmark Data & Infrastructure SCTR
Index Net of Fees
Return is the amount of money an
investment made for a portfolio. Return is
XLK
given as a percentage.
15.52
SPDR S&P Technology ETF
SPX 12.69
S&P 500 Total Return Index
Source: Morningstar Direct
Time Period: 1/1/2012 to 12/31/2018UP/DOWN
UPSIDE DOWNSIDE
SRVR CAPTURE RATIO CAPTURE RATIO
CAPTURE RATIOS INDEX 94.51 70.70
Upside/downside capture ratio show whether a given
strategy has outperformed, gained more or lost less than, a
broad market benchmark during periods of market strength Benchmark Data & Infrastructure SCTR
and weakness, and if so, by how much.
Index Net of Fees
Upside capture ratios for strategy's are calculated by taking
the strategy's monthly return during months when the
XLK
benchmark had a positive return and dividing it by the
benchmark return during that same month. Downside
capture ratios are calculated by taking the fund's monthly
return during the periods of negative benchmark
112.90 102.62
performance and dividing it by the benchmark return.
SPDR S&P Technology
ETF
SPX 100 100
S&P 500 Total Return Index
Source: Morningstar Direct
Time Period: 1/1/2012 to 12/31/2018BETA SRVR INDEX 0.78
Beta is a measure of a strategy's sensitivity to market
movements. Benchmark Data & Infrastructure SCTR
Index Net of Fees
It measures the relationship between a fund's excess
return over T-bills and the excess return of the
benchmark index. Equity funds are compared with the
S&P 500 index. Morningstar calculates beta using the
same regression equation as the one used for alpha,
which regresses excess return for the fund against excess
return for the index. This approach differs slightly from
XLK 1.05
other methodologies that rely on a regression of raw
returns. SPDR S&P Technology ETF
SPX 1.00
S&P 500 Total Return Index
Source: Morningstar Direct
Time Period: 1/1/2012 to 12/31/2018ALPHA SRVR INDEX 4.58
A measure of the difference between a strategy's actual Benchmark Data & Infrastructure SCTR
returns and its expected performance, given its level of
risk as measured by beta.
Index Net of Fees
A positive alpha figure indicates the strategy has
performed better than its beta would predict. In contrast,
XLK 2.18
a negative alpha indicates the strategy's
underperformance, given the expectations established by
the strategy's beta.
SPDR S&P Technology
ETF
SPX 0.00
S&P 500 Total Return Index
Source: Morningstar Direct
Time Period: 1/1/2012 to 12/31/2018SHARPE RATIO SRVR INDEX 1.20
This risk-adjusted measure was developed by Nobel Benchmark Data & Infrastructure SCTR
Laureate William Sharpe. It is calculated by using
standard deviation and excess return to determine
Index Net of Fees
reward per unit of risk. The higher the Sharpe ratio, the
better the fund's historical risk-adjusted performance. It
is calculated for the past 36-month period by dividing a
XLK
portfolios' annualized excess returns over the risk-free
rate by its annualized standard deviation.The Sharpe ratio
can be used to compare directly how much risk two
1.17
funds each had to bear to earn excess return over the
risk-free rate.
SPDR S&P Technology ETF
SPX 1.15
S&P 500 Total Return Index
Source: Morningstar Direct
Time Period: 1/1/2012 to 12/31/2018DISCLAIMERS Data quoted represents past performance, which is no guarantee of future results. The information presented above does not reflect the performance of any fund or account managed or serviced by Benchmark Investments, and there is no guarantee that investors will experience the type of performance reflected above. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any market forecast made in this commentary will be realized. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security and should not be relied upon as investment advice. The views and opinions in the preceding commentary are as of the date of publication and are subject to change without notice. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice, is not intended to predict or depict performance of any investment and does not constitute a recommendation or an offer for a particular security. We consider the information in this presentation to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of suitability for investment. Publication Date: January 2019
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