Biotech Breakthroughs, Discount Shoes, Home Builders and Big Banks Drive Theme-Based Stock Gains in 2012

Motif Investing Drills Down to Parse Stock-Performance Data by Themes, Ideas

Dec 27, 2012, 10:45 ET from Motif Investing

SAN MATEO, Calif., Dec. 27, 2012 /PRNewswire/ -- Motif Investing, the company that pioneered ideas-based stock investing, found that investment themes such as biotechnology, home improvement, Internet commerce, the "smart" electric grid, and big financial institutions drove stock gains this year. This same theme-based approach to investing can help guide investors as they navigate the turbulent financial markets in 2013.

The analysis looked at the year-to-date performance of dozens of motifs, which are professionally built portfolios of up to 30 stocks on the Motif Investing web site that track specific trends. The purpose was to gain a deeper understanding of the forces shaping the markets over the past year beyond widely reported, top-line numbers.

The results were in many ways surprising: The motif with the biggest year-to-date gains was "Biotech Breakthroughs", which was up over 46% thanks to gains from several innovative, little-known drug companies focusing on infectious and other diseases. The "Housing Recovery" motif was up 26.9% even as the nation's housing-market recovery based on housing starts is forecast at 1-2% for the year. And the "Too Big to Fail" motif, buoyed by shares of big commercial and investment banks, soared 33.5% despite a tougher financial regulatory environment and zero interest rates.

"In 2012, it was smart for investors to put money in science," said Hardeep Walia, Motif's co-founder and chief executive. "But you didn't need any expert knowledge to understand other key trends shaping the market, like the continuing boom in home improvement, Internet commerce and discount stores, all popular with cash-strapped Americans trying to save money and fix up their homes. Investors can find similar investment ideas for 2013 by simply looking at the real-world trends happening around them."

Indeed, Motif's "Home Improvement" motif was the year's second-best performer, logging a 36.3% gain thanks to strong performance by companies like Home Depot, Lowe's and Lumber Liquidators Holdings. Actual home-building companies, as part of the "Housing Recovery" motif, did even better with a gain of 67.3% year-to-date. Even the first signs of recovery in the housing market led to outsized gains for housing stocks, Motif found. Other standouts included:

  • "Couch Commerce", including Internet retailers and travel companies, up 34.7%;
  • "Smart Grid", including smart utility-meter companies, up 35% despite a lack of focus in the recent election on "green" issues;
  • "Discount Nation", including cut-rate retailers and shoe companies, up 26.9% (the shoe segment increased 117%, providing about 10% of the motif's overall return);
  • "Seven Deadly Sins", including tobacco, casino, fast-food, alcohol and lingerie stocks, up 23.6%. In tough times, people still drink beer, gamble and watch cable TV.

About Motif Investing

Motif Investing is an online broker that lets you invest in a world of big ideas. The company, based in Silicon Valley, is changing the face of online investing through an innovative new platform that allows individuals to invest in stock and fixed income portfolios based around real-world ideas and broad economic trends—and share those ideas with friends. Motif is a registered broker-dealer and a member of SIPC. The company's investors include Foundation Capital, Ignition Partners and Norwest Venture Partners. Learn more at

Investing in securities involves risk, you should be aware of prior to making an investment decision. An investment in individual stocks, or a collection of stocks focused on a particular theme or idea, such as a motif, may be subject to increased risk of price fluctuation over more diversified holdings due to adverse developments which can affect a particular industry or sector.  The views and opinions contained herein are intended for informational purposes only and not representative of results an investor can expect to achieve.  The securities mentioned herein do not represent a recommendation for a particular investment or strategy. Investors are responsible for determining the appropriateness and suitability for all investment decisions they make.

Data as of 12/20/2012. The year-to-date performance return shows how a particular benchmark motif could have performed over the defined period of time.  Stated 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. Past performance is no guarantee of future results.

For detailed information on how we calculate returns, please visit


Marisa Lam
GMK Communications for Motif

SOURCE Motif Investing