Investing in augmented reality stocks

This accessible and popular tech may be vulnerable to privacy regulations.

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Augmented reality is becoming an increasingly popular integration for mobile games and apps, but has to compete with similar technologies like virtual reality. Here’s what Australian investors should consider before investing in augmented reality stocks.

What are augmented reality stocks?

Augmented reality stocks are stocks from companies that design or produce augmented reality (AR) hardware or software — including chipsets, 3D sensors, headsets, haptic technology, laser projections, varifocal displays and semiconductors.

What is augmented reality?

AR is a form of technology that superimposes sounds and images onto what we observe. In this way, augmented reality tweaks our experience of the world around us by adding to what we perceive. The technology typically requires a lens-equipped screen to operate — like the camera on your mobile device — but can also rely on laser projections.

Since augmented reality is a screen-dependent technology, we typically experience AR through a mobile device. Today, a number of mobile games make use of AR technology, including Pokemon Go, Ingress and Harry Potter: Wizards Unite. But the technology can be used in a variety of other ways, too — including AR projections to assist complex neurosurgeries and projections on fighter planes to assist pilots with speed and navigation.

Augmented reality vs. virtual reality

While sometimes used interchangeably, augmented reality and virtual reality are two different sets of technologies. While augmented reality adds to the observable environment, virtual reality aims to replace it entirely.

Virtual reality (VR) is a computer-simulated experience that allows users to interact with a simulated 3D environment. To access this technology, you often need some form of wearable technology, like a VR headset or head-mounted display. Today, virtual reality is being used in video games, training simulators, real-estate tours, online retail, architectural design and more.

Why invest in augmented reality stocks?

Augmented reality is an emerging technology that is chock-full of potential. And market projections are promising.

According to Mordor Intelligence, the global AR market was worth $US 882 million in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 55.8% from 2020 to 2025. During this time, over 800 million smartphones will be equipped with AR-supporting technology. And other market sectors, like the automotive industry, are also integrating the technology into new models with heads-up displays and AR co-drivers.

Augmented reality is a flexible and adaptive technology with a myriad of practical, real-world applications. Not only do investors in Australia have the opportunity to back progressive new technology — they have the opportunity to invest in something they may actually use, both now and in the future.

Risks of investing in augmented reality

Augmented reality is a technology on an upward trajectory, but there are investment risks to consider — namely: data protection regulations and market competitors.

Tech companies have come under public scrutiny in the past for infringing on data privacy rights. AR technology is particularly reliant on consumer locations and cameras to operate. Enhanced data protection regulations could impact the industry’s process and hamper growth.

Another consideration is market competitors. Potential is no guarantee of growth and close competitors in the virtual reality and mixed reality markets may take aim at AR companies by targeting the same consumer base.

Augmented reality stocks

Augmented reality is a complex technology with many moving parts, including chipsets, sensors, headsets, and varifocal displays. While there are few pure-play augmented reality stocks — companies that focus on augmented reality and nothing else — you can add AR technology to your portfolio by investing in companies that contribute to the technology.

What ETFs track the augmented reality category?

Most of the ETFs that offer exposure to augmented reality stocks are heavily weighted with software and robotics companies.

  • Bailador Technology Investments Limited (BTI)
  • BetaShares Asia Technology Tigers ETF (ASIA)
  • ETFS Morningstar Global Technology ETF (TECH)

Compare trading platforms

To invest in augmented reality stocks, you’ll need a brokerage account in Australia. Review your platform options below.

Name Product Standard brokerage fee Inactivity fee Markets International
eToro Share Trading (US stocks)
US$0
US$10 per month if there’s been no login for 12 months
US shares, ETFs
Yes
Zero brokerage share trading on US stocks with trades as low as $50.
Join the world’s biggest social trading network when you trade stocks, commodities and currencies from the one account.
Superhero share trading
$5
No
ASX shares, ETFs
No
Pay zero brokerage on all Australian ETFs.
Trade ASX stocks with a flat $5 commission fee and a low minimum investment of just $100.
ThinkMarkets Share Trading
$8
No
ASX shares, ETFs
No
Limited offer: Get 5 free ASX trades when you open a new account with ThinkMarkets before June 30, 2021 (T&Cs apply).
Buy and sell CHESS sponsored ASX shares with $0 brokerage on your first 5 trades. Only $8 flat fee brokerage thereafter, plus enjoy free live stock price data on an easy to use mobile app.
Bell Direct Share Trading
$15
No
ASX shares, mFunds, ETFs
No
⭐ Finder Exclusive: Get 5 free stock trades and unlimited ETF trades until July 31, 2021 when you join Bell Direct.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
IG Share Trading
Finder Award
IG Share Trading
$8
$50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares
Yes
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, plus get access to 24-hour customer support.
Saxo Capital Markets (Classic account)
$6.99
No
ASX shares, Global shares, Forex, CFDs, Margin trading, Options trading, ETFs
Yes
Acess 19,000+ stocks on 37 exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
CMC Markets Stockbroking
$11
No
ASX shares, Global shares, mFunds, ETFs
Yes
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, ETFs and managed funds, plus access up to 15 major global and Australian stock exchanges.
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Important: Share trading can be financially risky and the value of your investment can go down as well as up. “Standard brokerage” fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Bottom line

Augmented reality is a growing technology many of us can access through our mobile devices — but it isn’t without its risks. Data protection regulations and pressure from competing technologies may pose threats to this industry’s development.

Explore your brokerage account options across multiple platforms to find the account that best meets your needs.

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