Before moving on to the term FANG 2, let's remember the previous version. FAANG is an abbreviation used to represent the Big Five companies:
F - Facebook
A - Amazon
A - Apple
N - Netflix
G - Google
These companies are the hallmark of the revival of the IT industry after the dotcom crash of the 2000s. The peak of the greatness of these companies came during the COVID epidemic 2020-2021, when most of the world was held in lockdowns. These 2 years have led to a sharp growth of the entire IT market and especially companies associated with remote work, for example such as Slack, Zoom. And it seemed like it would always be like this.
But despite the expectations of many about continuing rise of FAANG, about that the era of the metaverses is beginning (especially Meta (former Facebook) tried to convince us of this) and the era of the NFT will continue, we are witnessing the birth of a new era. In 2022, we are seeing something like a repeat of the dot-com crash era - the decline of the growth of IT companies and the beginning of the growth of others, not directly related to IT.
There are many prerequisites for this phenomenon, but the point of no return is 24th February 2022 - the beginning of the Ukrainian-Russian conflict, which is essentially a manifestation of the struggle between the West (led by the EU and the USA) and the East (led by BRICS - Brazil, Russia, India, China, South Africa). The sanctions of the West following Putin's invasion of Ukraine and the counter-sanctions of the Russian Federation to the West are destabilizing the world economy. And the West's freeze of gold and reserve assets of the Russian Federation (28th February 2022) raised the discussion of the existence of the Bretton Woods system and the emergence of new world currencies, primarily the Chinese Yuan (CNY).
Safety issues are also of serious concern - no country in the world can be considered completely safe anymore (I mean safety in a comprehensive sense - military, medical, environmental and economic). And all this on the background of the post-covid crisis, when many industries were stopped and have not yet returned to their previous indicators, as well as the overpopulation of the planet, when most of humanity is experiencing lacks food and water.
Obviously, with this background, metaverses (which will be as deceitful and unsafe as our other social platforms - at least because they were created by the same people) and NTFs (which are impossible to touch, but easy to copy for free) are the last thing to think about. And now we're observing: the main value is not virtual matter, but simple things - raw materials, energy, food, protection.
The concept of FAANG 2.0 is based on similar thoughts. This term was first introduced by Merrill Lynch in their letter to investors dated 7th March 2022 - Capital Market Outlook. This is how the company itself deciphers the term FAANG 2.0:
F - Fuel (and energy)
A - Aerospace (and defense)
A - Agriculture
N - Nuclear and renewables
G - Gold and metals/minerals
These sectors will grow in the coming years. In the letter, Merrill Lynch explains its position - I recommend reading it. I fully agree with this position, because it intersects with my views on what is happening. But I want to add a little more to this concept, and I call it the FAANG 2.1 concept:
F - Fuel, energy and utilities
A - Aerodefense, weapons and communications
A - Agriculture and water
N - Nuclear
G - Gold/cryptocurrencies and metals/minerals/materials
As you can see, my changes contains the following items:
1. Utilities have been added to F. I expect these companies to grow faster than the market.
2. The first A is limited to (and widened to) weapons and communications. Space exploration, in my opinion, will not be a priority, except for its military application. And the same thing with civil aviation. And communications will grow fast because of world continuing digitalization, as well as defense using of new communication technologies.
3. Water is added to the second A. Obviously, it's one of deficit substances and also it needs for agriculture.
4. Dropped renewables from N. I'm not sure renewable sources of energy can cover all necessary capacity, so very likely main focus will be on nuclear.
5. Cryptocurrencies have been added to G - despite their virtuality, they have firmly entered the everyday life of investors and will obviously continue to play their role as an additional protective asset (but this does not apply to NTF and blockchain projects - I guess they won't grow as fast as cryptocurrencies). And materials mentioned in this char - in addition to metals/minerals.
Therefore, I decided to redistribute my long-term investments in accordance with the new concept of FAANG 2. And created this website as a point where I can work to save information about ETFs that take into account this new long-term trend. To begin with, I created a virtual calculator to distribute the amount of investments between different sectors of FAANG 2.1, but decided to make it public. And based on that, I also decided to write the prerequisites and history of the term FAANG 2 and my thoughts on all this. That's why you're reading this text.
Thanks for your attention!
Important note: this site is a personal project, no way it's an investment recommendation, and all the texts and calculations reflects only the personal thoughts of its author, who may be mistaken and who is not a professional investor or financier.