What is the "outdoor recreation economy"?

The outdoor recreation economy refers to all business activity related to outdoor activities like hiking, camping, fishing, boating, and more. It includes manufacturing of gear and equipment, sales of outdoor-related products, and services that support these activities. In the US alone, this sector contributes hundreds of billions of dollars to the economy annually and continues to grow as more people prioritize nature-based experiences.

What makes outdoor recreation stocks a potential growth opportunity?

Outdoor recreation stocks have growth potential for several reasons: increasing consumer interest in experiences over material goods, growing health and wellness trends, sustained demand for domestic travel options, and continuous product innovation that encourages equipment upgrades. Additionally, many outdoor activities gained new participants during the pandemic who have maintained their interest, creating a larger customer base for these companies.

Are outdoor recreation stocks seasonal investments?

While some outdoor activities are seasonal (like skiing or water sports), many companies in this fund have diversified product lines that perform well year-round. Some sell gear for multiple seasons, while others have global operations that balance seasonal fluctuations across hemispheres. Additionally, many outdoor equipment purchases happen in anticipation of seasons, spreading sales throughout the year and reducing the impact of weather-dependent revenue cycles.

What is "consumer discretionary" and why does it matter for these stocks?

Consumer discretionary refers to non-essential products and services that people buy when they have extra income to spend. Outdoor recreation equipment falls into this category because it's not a necessity like food or housing. This matters because these stocks can be more sensitive to economic conditions - they may perform well when the economy is strong and consumers feel confident spending on leisure, but might face challenges during economic downturns when people cut back on non-essential purchases.

What does "powersports" mean in this investment context?

Powersports refers to recreational vehicles that are powered by engines, including ATVs (all-terrain vehicles), snowmobiles, jet skis, motorcycles, and off-road vehicles like side-by-sides. Companies in this fund that focus on powersports (like Polaris, BRP, and others) manufacture these vehicles for recreational use in various outdoor settings. These products typically represent higher-ticket purchases within the outdoor recreation industry and appeal to enthusiasts looking for powered adventure experiences.

16 handpicked stocks

Great Outdoors Fund

Invest in the brands that power your adventures in nature. These carefully selected companies represent the best in outdoor gear, apparel, and vehicles, benefiting from our growing passion for fresh-air experiences and natural exploration.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17