With presidential election results solidified, a variety of equity-based exchange traded funds merit a new look, including the Entrepreneur 30 Fund (NYSEArca: ENTR).
At its core, ENTR is a growth ETF, but it deploys a unique factor-driven methodology to deliver that growth exposure.
With the aid of AI and Thematic Research, ERShares incorporates a macro-economic, top-down approach that integrates changing investment flows, innovation entry points, sector growth and other characteristics into a dynamic, global perspective model. ENTR’s positioning as a growth play is relevant following the 2020 elections.
“Joe Biden’s victory in the presidential race likely ushers in a near-term market environment dominated by low rates, a hunt for yield and growth stocks,” according to BlackRock research.
ENTR Going Forward
Growth stocks are often associated with high-quality, prosperous companies whose earnings are expected to continue increasing at an above-average rate relative to the market. They generally have high price-to-earnings (P/E) ratios and high price-to-book ratios. Still, data suggest the growth/value premium isn’t overly elevated relative to historical norms.
“Yet we still expect yields to slowly move up over the next few years, boding well for risk assets, especially for credit and growth companies that have dominated markets for much of the post-crisis period,” notes BlackRock.
The Entrepreneur 30 Fund tries to reflect the performance of the Entrepreneur 30 Index, which is comprised of 30 U.S. companies with the highest market capitalizations and composite scores based on six criteria referred to as entrepreneurial standards. ENTR is considered a large-cap growth ETF, a good status to have in recent years.
Going forward, ENTR could benefit from a divided government as investors embrace growth as a possible safe-haven refuge.
“A Biden divided government would bring significant changes in foreign policy and regulation – both in substance and tone. Yet the legislative agenda would be constrained, taking off the table the more transformative scenarios being contemplated ahead of the election,” notes BlackRock.
For more on entrepreneurial strategies, visit our Entrepreneur ETF Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.