When it comes to investing to the effect of disruptive growth, exchange traded funds make that endeavor easier for investors.
Some ETFs dedicated to innovative growth equities are dedicated to a single theme while others are broad, providing investors with exposure to multiple disruptive growth trends. The Goldman Sachs Future Tech Leaders Equity ETF (GTEK) is in the latter category and that could be to the benefit of long-term investors.
With GTEK, investors leave the stock-picking to the professionals. The same goes for the fund’s thematic exposures, which is relevant because industry/theme identification can be just as difficult as picking individual stocks. Fortunately, GTEK provides exposure to several industries with compelling long-term growth trends. Cybersecurity is just one example.
“Global cybercrime-related losses are projected to reach $10.5 trillion by 2025 — more than the forecast gross domestic product (GDP) of Japan, the world’s third-largest economy — up from $3 trillion just a decade earlier,” according to Charles Schwab research. “As the threat grows, so will the need for cybersecurity technologies, creating an industry ripe for innovation. Though it’s difficult for companies and investors alike to successfully navigate such a fast-moving field.”
Another reason why GTEK’s methodology is attractive is the point that many disruptive technologies intersect with each other. That’s the case with cybersecurity and artificial intelligence (AI). As Schwab points out, CrowdStrike and Palo Alto Networks (NASDAQ: PANW) are among the cybersecurity companies harnessing the power of AI to prevent cyber crimes before they turn into full-blown hacks. Palo Alto Networks is GTEK’s largest component.
Speaking of AI, it’s one of the disruptive themes with the longest growth runway because it’s already reshaping everyday tasks and a variety of industries.
“It’s difficult to find an industry that isn’t likely to be disrupted by AI, which helps explain why global AI revenue is expected to grow tenfold to more than half a trillion dollars by 2023. How we live and do business will possibly be transformed in the years ahead — whether by self-driving vehicles or smart applications that learn from and respond to user behavior,” added Schwab.
Other themes represented in GTEK include cloud computing, e-commerce, and fintech. In the case of cloud computing, that’s another high-growth industry that intersects with AI and cybersecurity. An added benefit is that GTEK is actively managed, meaning its managers can swiftly adjust the roster to capitalize on emerging growth opportunities.
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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.