GE

General Electric (GE)

It’s been a long and winding road for General Electric (GE), one of the first 12 companies to be included as part of the Dow Jones Industrial Average when the list was first launched in 1896. Founded by none other than Thomas Edison, who created the Edison Lamp Company in the late 1880s to market his newest innovation, the electric lightbulb, GE as a company was formed in 1889 by Edison’s financial backers, including J.P. Morgan and the Verderbilt family, as a way to support all of the various applications for electricity that were emerging at the time. In the early days, those applications included everything from railroads, to radio, to power generation and more.

Today GE is one of the largest conglomerates in the world, with interests in aviation, healthcare, renewable energy, additive manufacturing, financial services and, of course, electric lighting.

For 2018, GE’s worldwide revenue was more than $121 billion, placing it 18th on the Fortune 500 list of the largest U.S. companies by revenue. It employs more than 230,000 people across 130 countries.

Rationale

For more than a century, the most direct way to gain exposure to General Electric has been to buy its listed shares. But lately there have been a number of good reasons for investors to reconsider that approach. For one thing, GE was delisted from the Dow Jones Industrial Average in 2018 after its enterprise value was nearly cut in half in 2017 following years of disappointing financial results. Between 2016 and 2018, the company lost 74% of its market cap, due in large part to bad moves in its power generation business.

However, investors interested in gaining exposure to the sectors that General Electric competes, rather than buying GE shares themselves should consider buying funds that provide exposure to General Electric and other conglomerates. After all, the return drivers that will benefit GE might also benefit other similar companies in aviation, manufacturing, consumer staples and more. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like General Electric through these types of funds.

Investing in GE

A search on Magnifi suggests that investors can gain access to GE via a number of different funds and ETFs, including those shown below.

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.] 


bac

Bank of America (BAC)

Despite its name, Bank of America (BAC) actually isn’t the largest bank in the United States. That honor actually goes to JPMorgan Chase, which has $2.74 trillion in assets. Bank of America is number two, with $2.38 trillion, as of 2018, making it the eighth largest bank in the world. And, despite its name today, it traces its roots back to two divergent banks – Bank of Massachusetts on the east coast, founded in 1784, and Bank of Italy, a San Francisco-based bank for Italian immigrants, founded in 1904.

The bank as it’s known today was formed in 1998 after the merger of NationsBank and BankAmerica, and it is today part of the Big Four of U.S. banks, serving more than 10% of all American deposits and offering services in commercial banking, retail banking, wealth management and investment banking. Its subsidiaries include Merrill Lynch and it operates branches in all 50 U.S. states, more than 15,000 ATMs machines and serves more than 46 million customers.

Bank of America’s market cap is $296 billion as of 2019, and it generated more than $91 billion in revenue in 2018.

Rationale

The most direct way to gain exposure to Bank of America is to buy its listed shares, of course, but there are reasons for investors to reconsider that approach. As a bulge bracket bank, BAC operates in a highly regulated space, subject to ongoing government oversight and scrutiny. This helps to protect its customers and other participants in the financial system from loss due to corporate misdeeds, but limits BAC’s potential for growth as a business itself. What’s more, Bank of America received a bailout during the 2008 financial crisis, highlighting its susceptibility to worldwide financial problems that have not entirely gone away in the years since.

However, for investors interested in gaining exposure to the banking sector, rather than buying BAC shares themselves should consider buying funds that provide exposure to Bank of America and other financial services firms. After all, the return drivers that will benefit BAC might also benefit other similar banks. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like Bank of America through these types of funds.

Investing in BAC 

A search on Magnifi suggests that investors can gain access to Bank of America via a number of different funds and ETFs, including those shown below. 

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]      

 

 

 


payments

Visa (V)

Visa (V) is a financial services company that oversees a worldwide network of electronic fund transfers, through its Visa-branded credit cards, debit cards and prepaid spending cards. The company is an intermediary, working with banks and other financial institutions to offer Visa-branded financial services products for their customers. It was created in 1958 as a Bank of America spinoff, which first introduced the idea of an all-purpose credit card that could be used at a variety of merchants, rather than the revolving credit accounts that were popular at the time but limited in their use.

Visa’s products generally break down into three categories: debit cards, credit cards and prepaid cards. It also operates the Plus network of ATM machines as well as the Interlink EFTPOS point-of-sale network. In addition, Visa provides direct commercial payment solutions for a range of B2B users and, in 2014, partnered with Apple to support the iPhone maker’s Apple Wallet spending feature.

Visa operated the world’s largest card payments network until 2015, when it was surpassed by UnionPay, a Chinese credit card processor. Today the company has operations worldwide and processes more than 100 billion transactions every year. As of 2018, its revenues were more than $20 billion on a $280 billion market cap.

Rationale

The most direct way to gain exposure to Visa is to buy its listed shares. But investors have good reason to reconsider that approach given Visa’s exposure to the global financial system as a whole. As the second-largest financial services network operator in the world, V grows alongside overall global growth. But, when that consumer spending slows, so does Visa’s long-term growth plans.

However, for investors interested in gaining exposure to the financial services sector, rather than buying V shares themselves should consider buying funds that provide exposure to Visa and other similar firms. After all, the return drivers that will benefit V might also benefit other similar firms in financial services that are better diversified. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like Visa through these types of funds.

Investing in V 

A search on Magnifi suggests that investors can gain access to Visa via a number of different funds and ETFs, including those shown below. 

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]      

 

 

 


Citicorp (C)

One of the largest financial services companies in the world, Citicorp (C) is also the parent company of one of the oldest banks in the U.S., Citibank, which can trace its roots back to the City Bank of New York, founded in 1812. Citibank today has more than 2,600 branch locations in 19 countries, although most of its operations are focused in the United States and Mexico.

Formed by the merge of Citicorp and Travelers Group in 1998, Citicorp’s business can today be split in two – investment banking and financial services, both tied to each of the original partner companies. Citicorp is the third largest bank in the U.S. and is considered a “systemically important financial institution” by U.S. regulators, placing it on the “too big to fail” list, leading to its government bailout in 2009.

As of 2019, Citi has more than 200 million customer accounts and offices in more than 160 countries. Its revenues for 2018 totaled more than $72 billion.

Rationale

As a Big 4 financial institution, naturally the simplest way to gain exposure to Citicorp is to buy its listed shares. But given Citi’s rocky history in recent years, that can open investors up to excess risk. Citicorp was the recipient of more than $300 billion in bailout funds in the wake of the 2008 financial crisis and, although operations have stabilized since then, its business is largely left to the whims of the global financial system. Given its size, there is little Citigroup can do to outperform its peers directly.

A solution that can dampen some of that volatility is to buy funds that provide exposure to Citicorp and other similar firms, rather than C shares themselves. After all, the return drivers that will benefit Citi might also benefit other similar firms in financial services. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like C through these types of funds.

Investing in C

A search on Magnifi suggests that investors can gain access to C via a number of different funds and ETFs, including those shown below. 

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]