The Goldman Sachs Future Tech Leaders Equity ETF (GTEK) is up over 3% on Thursday as a week plagued by volatility for the general markets nears a close.
GTEK uses an active, bottom-up approach to build a high-conviction portfolio of potential next generation tech leaders. These are firms at various growth stages that are developing disruptive or emerging technologies.
Notably, the fund excludes mega-cap tech companies since the focus is on growth potential, investing only in globally listed firms with market capitalizations of less than $100 billion, according to VettaFi.
The fund’s largest holdings are currently ON Semiconductor Corporation (ON, 3.28%), Marvell Technology Inc. (MRVL, 3.08%), Tokyo Electron Ltd. (8035, 2.99%), Palo Alto Networks Inc. (PANW (2.82%), and Cadence Design Systems Inc. (CDNS, 2.71%), as of May 18, according to VettaFi.
GTEK concentrates its investments in the information technology sector; however, it may also include tech-enabled firms in communication services, internet & direct marketing retail, and healthcare. To select securities, the fund advisor uses fundamental metrics to screen for quality and growth such as those indicating sustainable free cash flow generation. The fund also considers company valuation and may integrate ESG factors in the selection process.
The fund offers exposure to companies domiciled in the U.S. (52.85%), Taiwan (13.88%), China (10.11%), Japan (7.96%), the Netherlands (3.47%), Uruguay (2.24%), Germany (2.11%), and South Korea (2.04%), among others, as of May 18, according to VettaFi.
Examining additional factor exposure, GTEK holds highly liquid stocks. More liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market sell-offs. They are also easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time, according to Morningstar.
For more news, information, and strategy, visit the Future ETFs Channel.