With an array of disruptive megatrends still in their infancies, it’s an exciting time to be a growth investor. Fortunately for investors, a growing number of exchange traded funds are up to the task of delivering megatrends exposure.
That group includes the Goldman Sachs Future Tech Leaders Equity ETF (GTEK). GTEK, which debuted last month, is actively managed. That’s potentially beneficial for investors for multiple reasons. For starters, stock picking among disruptive growth names is difficult. Second, GTEK doesn’t focus on established tech titans, such as Apple (NASDAQ:AAPL) or Alphabet (NASDAQ:GOOG). Rather, GTEK’s point of emphasis is companies with market values of less than $100 billion. While that’s not small per se, it’s well below the neighborhood in which many traditional index-based tech funds dwell.
One way of looking at GTEK is that it’s an exciting ETF addressing an investment segment with plenty of its own excitement. Moreover, GTEK appears to be well-timed because some market observers are forecasting epic growth for a variety of megatrends, including some addressed in GTEK. The rise of some trends is being hastened by the coronavirus pandemic.
“At the same time, the pandemic has also reshaped the future of work. Organizations around the world have responded to Covid restrictions by embracing remote working as the default. They are also increasingly adopting digitization and automation in their businesses. Meanwhile, the rise of the gig economy has brought the traditional work model under the microscope,” reports Zavier Ong for CNBC, citing Bank of America research.
GTEK fills another important void: Many old guard tech ETFs simply don’t have adequate exposure to disruptive themes, leaving investors wanting more.
“We believe there is a disconnect between where investors are positioned in technology companies today and where we see the best potential investment opportunities over the next decade. The Goldman Sachs Future Tech Leaders Equity ETF invests in technology companies with market capitalizations of less than $100 billion, seeking to give investors exposure to the next generation of potential tech leaders,” according to the issuer.
Speaking of exciting themes, GTEK, which already has nearly $197 million in assets under management barely more than a month after coming to market, offers exposure to artificial intelligence (AI) and big data.
“Meanwhile, big data and artificial intelligence continue to have ever-wider applications across diverse industries. Bank of America is bullish on the theme’s potential, expecting ‘$15.7 trillion in GDP gains by 2030 across high tech, data analytics, autos, industrials, telecom, healthcare and financials,’” reports CNBC.
For more news, information, and strategy, visit the Future ETFs 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.