As the market faces more and more concentration risk from the dominance of just a few AI hyperscalers, investors are on the lookout for ETF tools to diversify their portfolios while still chasing upside. Thematic ETFs may provide one such toolset, a notable ETF segment for many years – in particular disruptive versions of thematic ETFs can help meet that goal, with Fidelity Investments offering particularly useful options.
Key Takeaways:
- The ETF wrapper’s flexibility and easy tradability makes ETFs powerful portfolio building blocks.
- Fidelity Investments’ disruptive ETF suite uses flexible, in-depth, active ETFs to target areas like tech, automation, and more.
- That focus could make the ETF suite a solid option to give investors bespoke allocations that fit their plans.
The firm, for example, offers the Fidelity Disruptive Technology ETF (FDTX ). FDTX charges a 50 basis point (bps) fee to actively invest in disruptive technologies. Specifically, the fund actively invests in innovative firms engaged in segments like big data, AI, cybersecurity, e-commerce, and more.
That has helped FDTX return 46.3% over the last 12-month period, according to ETF Database data. The ETF offers exposure to the key names that investors want, while also rising disruptive names that could prove important differentiators in tech overall.
See More: Get Enhanced International Equities Exposure in FENI
Perhaps the most useful funds out there are those offering to disrupt other categories. Automation, for example, represents massive potential to benefit from AI advancements. The Fidelity Disruptive Automation ETF (FBOT ) charges the same 50 bps fee and applies a similar approach to disruptors in automation.
FBOT invests in key names like Nvidia (NVDA) as well as key machinery names like Deere & Company (DE). The strategy has returned 53.6% over the last 12-month period. It has produced strong numbers over the last month, as well. The strategy invests in firms with the potential to displace incumbents or disrupt important market segments over time. That includes segments like robotics, pneumatic systems, autonomous driving, and AI firms.
Fidelity also offers communications, financials, medicine, and overall disruptors through thematic ETFs within the suite. Overall, that can help investors calibrate their desired type of equities exposure. Rather than try to find the one perfect fund, stacking together disruptive ETFs can offer greater flexibility — and potentially upside.
For more news, information, and analysis, visit the ETF Investing Content Hub.
Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
1266637.1.0
