Technology disruptors such as artificial intelligence continue to capture the attention and imagination of investors seeking the leaders of tomorrow. Investors shouldn’t overlook the award-winning Fidelity Disruptive Technology ETF (FDTX ), which provides exposure to disruptive tech companies.
To see the impact of disruptive tech, look no further than artificial intelligence. In April, FDTX garnered the Best New U.S. Equity ETF award at the 2024 etf.com Awards. The fund beat out other nominees focused on quality, equity income, and the “Magnificent Seven.”
The fund is actively managed and converted from a mutual fund strategy to ETF in June 2023. It seeks long-term capital appreciation by investing in disruptive technology companies.
These companies develop, support, or provide innovative ways of doing business, including services and products to customers. These innovations have the potential to disrupt the current status quo, injecting a new or unconventional way of doing business into their respective industries.
Under the Hood of Disruptive Tech ETF FDTX
The strategy seeks companies primarily doing business in big data, cybersecurity, software as a service (SaaS), consumer technologies, and e-commerce. Ride-share and next-generation hardware companies augment that list.
The companies FDTX invests in have the potential to disrupt their respective industries, and the fund can invest across sectors. Potential disruptive factors measured include new or expanded business models, pricing, value networks, and product delivery and services. As disruptors, these companies have a potential positioning advantage.
FDTX uses fundamental analysis, including a company’s financial health, industry position, and economic and market conditions. The ETF invests domestically and internationally as well as in growth stocks, value stocks, or both.
Top holdings within the fund include Nvidia (NVDA) at a 6.72% weight, Salesforce (CRM) at a 5.44% weight, and Taiwan Semiconductor Manufacturing (TSM) at a 5.14% weight as of 03/27/24.
Since inception, the fund has gained 16.86% on a total return basis as of 04/22/24 according to Y-charts, as seen in the chart above.
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