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‘Life at Home’ and ‘Hot Biotech’ Top Motif’s Big Ideas of 2012

19 December 2012 in Trading Ideas

It’s said that you can’t go home again, but many customers of Motif Investing found their lives at home to be a very profitable idea this year.

Three of the five top-performing motifs of 2012 — Home Improvement, Smart Grid, and Couch Commerce – focus on the new and changing ways that we’re inhabiting our residences.

The Home Improvement motif, which is a portfolio of 20 stocks focused mainly on home improvement stores and retailers selling paints, furniture and other housewares, increased 36.3% year to date (as of Dec. 19), as investors have appeared to embrace that a housing recovery is finally beginning to gain traction. Recent encouraging data on housing starts and home prices has also helped to encourage investors’ optimism.

But consumers are also improving their homes in other ways, not just with new roofs and furniture, but by joining the so-called smart energy movement – sensors, monitors and digital intelligence tools that allow homeowners to manage energy wisely. The Smart Grid motif, a portfolio of nine stocks of companies that make and sell such products, was another of 2012’s top performers, rising 34.1% year to date.

Our homes are also rapidly becoming our prime location for where we shop, a prime example of which is seen in the 14% growth in online holiday shopping this year – to more than $21 billion. The Couch Commerce motif, which comprises stocks of online retail heavyweights like Amazon, eBay, and Priceline, has jumped 33.6% in 2012.

Many investors who focused their shopping for biotech stocks saw that sector bring profit to their portfolio in 2012. The Biotech Breakthroughs motif gained 47.5% this year, as investors increasingly looked at biotech firms to either beat Big Pharma to the punch on developing drugs for cancer and infection diseases – or deliver upside as takeover targets by larger pharmaceutical companies. If you can’t beat ‘em, buy ‘em.

Finally, while consumers did continue to spend, there was evidence to suggest that the backdrop of stagnating income growth has maintained the popularity of bargain-hunting. The Discount Nation motif rose 26.8% in 2012, as retailers known for competing on cost, saw their sales hold up – and then some. Amazon, for example, said sales in the first nine months of the year jumped nearly 30%, while sales at retail king Wal-Mart rose 5.4% to $339 billion.

These motifs were just some of the best-performing ideas of 2012. What were your favorite ideas of the past year? For a look at some possible investment ideas for 2013, click here.


Performance data was as of 12/19/2012. Performance data and returns are based on past performance and are not representative of results an investor could expect to achieve. The 1-month and 3-month return shows how a particular benchmark motif could have performed over a stated period of time. Returns of individual motifs do not take into consideration certain fees and/or commissions, corporate actions, or other activity that can affect the return an investor could expect to incur. The performance results attempt to follow a standardized and consistent methodology for performance reporting. While we believe the performance data is gathered from reliable sources, the information that generates performance results uses historical data that we believe to be accurate but has not been validated and may contain errors in pricing or other conditions. Reference to return of index does not imply its performance is comparable to a motif, but rather serves to provide a reference point. For detailed information on how we calculate returns, please visit www.motifinvesting.com.

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