Investing along the lines of disruptive growth and specific emerging themes can be tricky business for many market participants, but this style is compelling for many risk-tolerant investors.
That’s understandable. Growth stocks are out of favor at the moment, but there is no denying that themes such as e-commerce, fintech, and many more are disruptive and fast becoming permanent fixtures in our daily lives. Plenty of exchange traded funds provide exposure to these concepts, but investors need to be selective in this space. Enter the Goldman Sachs Future Tech Leaders Equity ETF (GTEK).
While plenty of innovative themes are credible and have staying power from an investment perspective, some don’t check those, but investors can still find their ways to funds with questionable exposures. GTEK potentially solves that problem because it’s a diverse fund with leverage to multiple themes. It’s not a one-theme offering.
That’s relevant when considering the sprawl in a sector such as technology. Cloud computing, cybersecurity, and fintech, among other industries, are fixtures on the thematic front, but knowing when to engage those groups on a singular level is difficult for many investors.
“90% of the world’s data has been produced in the last two years, increasing the need for enterprises to effectively store, manage, and work with large data sets,” according to Goldman Sachs Asset Management (GSAM). “Companies such as UiPath and C3.ai provided innovative software solutions, such as robotic process automation, to organizations seeking to automate their operations at large scale.”
As a tech-heavy ETF, an actively managed one at that, GTEK provides robust leverage to exciting advances in software, artificial intelligence, and robotics — industries with long, compelling runways for growth. GTEK’s exposure to the metaverse is also potentially attractive for long-term investors, particularly when it comes to gaming.
“Today, small, mid-sized, and independent content creators have access to a number of platforms for creating and operating real-time content, decreasing the time, capital, and expertise required to develop a game,” adds GSAM. “Mobile gaming is becoming an increasingly social experience for users of all ages, and older generations are beginning to represent a larger share of gaming demographics.”
As an active fund, GTEK offers benefits such as avoiding the backward-looking methodology associated with rival index-based strategies. Additionally, GTEK’s managers can focus on important metrics such as profitability and valuation, keeping investors away from money-losing, richly valued companies.
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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.