Rather than focus squarely on large companies with war chests of capital to throw at research and development, LOUP also looks at smaller companies that may not compare with respect to financial resources, but can compete with their big ideas and ground-breaking innovations.
“We’re also emphasizing smaller companies–the $500 million to $5 billion market cap,” said Munster.
LOUP studied the performance of 40 tech companies and extrapolated one key metric–the propensity for growth. This provides an impetus for LOUP when it comes to selecting companies that meet this growth criteria for investment opportunities.
“Outside of Apple, over the last five years, companies that grew at greater than 20% returned an average 6x (growth) and the ones that grew less than 20% returned an average 2x,” said Munster. “This ETF really wants to capture growing tech companies that you haven’t heard of.”
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