Revisiting “Disruptive Growth”

Don’t worry, about a thing 
’Cause every little thing, gonna be all right 
Singin’, don’t worry, about a thing 
’Cause every little thing, gonna be all right 

(From “Three Little Birds” by Bob Marley, 1977) 

In February, we posted a blog piece about our Disruptive Growth Model Portfolio. Two of our primary investment themes for 2021 and beyond are “disruptive growth” and thematic investing. As a reminder, we believe that, even as the global economy reopens and recovers, the COVID-19 pandemic fundamentally and perhaps permanently altered the way we work and socialize, and take care of and entertain ourselves.  

We believe this has led to dramatic growth in certain “thematic” megatrends, and we think these trends will be with us for years to come. This prompted us to launch our disruptive growth model in August of last year. We identified six thematic sectors and ETFs and built a diversified portfolio accordingly. It is intended for growth-focused advisors and end clients who can tolerate highly valued companies and potentially higher volatility in exchange for potentially higher long-term growth rates. 

The six sectors we are currently allocate to include cloud computing (via our own WCLD), diversified platform-based companies (via our own PLAT), cybersecurity, financial technology, genomics and biotechnology, and online gaming and e-sports

How is the portfolio performing? 

Like many technology firms and the so-called “FAANGM” stocks—Facebook, Amazon, Apple, Netflix, Google (Alphabet) and Microsoft1—the ETFs in the disruptive growth model hold many highly valued companies that currently do not generate much in the way of current earnings or dividends. That is, investors are paying high valuations today in exchange for the potential of higher earnings in the future. 

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Disclaimer: Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. U.S. investors only: To obtain a prospectus containing this ...

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