The GINN ETF: Disruptive Investing in All 11 GICS Sectors

While many thematic exchange traded funds focus on a single investment niche or segment, the pace of disruption and innovation moves at breakneck speed. What’s in style today may be out of fashion tomorrow.

That’s confirmation that broad approaches to disruptive investing, including the Goldman Sachs Innovate Equity ETF (GINN), are applicable to a broad swath of investors.

“Whether it’s the Internet of Things, cloud computing, mobile entertainment, or pandemic-related themes like remote-working technology, Wall Street’s attention flits from one idea to the next whenever a bigger and fresher opportunity seems to come along,” reports Business Insider.

GINN tracks the Solactive Innovative Global Equity Index, which does something many competing benchmarks don’t do: provide exposure to all 11 GICS sectors. The fund is not limiting its quest for disruptive exposure to the old standbys of the technology and communication services sectors.

The ETF’s approach is relevant because it can keep investors comfortably engaged in disruptive investing for longer periods of time, diminishing the chances they’ll miss out on promising themes by being too narrowly exposed to a small group of sectors and stocks. To that end, the Goldman Sachs exchange traded fund has 460 holdings – a deep bench relative to category peers. GINN’s depth is important for other reasons.

Investors are always looking for “companies making things better, faster, and cheaper, and that, in doing so, will maintain an edge for years. While that sounds like a recipe for tech-heavy investing, companies in fields from food and drinks to retail have achieved this goal,” Business Insider reports citing Macquarie’s Alex Ely, chief of growth equity investment at the firm.

GINN offers investors another benefit: it’s not excessively allocated to a small number of stocks. The largest weight assigned to any of its holdings is 2.6% and its top 10 holdings combine for just 18.7% of the roster, according to issuer data. Conversely, many thematic funds, even those purporting to be diverse, become proxies for one or small number of stocks.

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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.