ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Megatrends Channel
  2. NBDS Is the Anti-ARKK
Megatrends Channel
Share

NBDS Is the Anti-ARKK

James ComtoisJan 19, 2023
2023-01-19

While the ARK Innovation Fund (ARKK B+) continues to be popular among investors, Cathie Wood’s flagship fund is down 78% from its February 2021 peak. The issues with ARKK have been well documented. It lacks risk controls. It’s overconcentrated in a few tech names. Its stock selection process is based on the intuitions and decisions of one person rather than a disciplined method.

“Wood’s reliance on her instincts to construct the portfolio is a liability,” wrote Morningstar strategist Robby Greengold. “Rather than gauge the portfolio’s aggregate risk exposures and simulate their effects during a variety of market conditions, the firm uses its past as a guide to the future and views risk almost exclusively through the lens of its bottom-up research into individual companies.”

For investors who want to invest in disruptive technology with risk controls, the Neuberger Berman Disrupters ETF (NBDS ) invests in companies that pursue disruptive growth agendas that the portfolio management team believes will shape the future and can invest globally across market capitalizations. Rather than use traditional sector classification, the fund instead uses a disciplined process to seek highly innovative companies consistent with a longer-term investment horizon.

The portfolio team has access to daily analysis on six terabytes of data through machine learning, language processing, and cloud computing techniques. This includes SKU-level transaction data, search data, and conference call transcripts, complementing its fundamental analysis to result in a rigorously developed and highly targeted portfolio of roughly 30 companies.

Unlike ARKK, NBDS has disciplined risk controls. The Neuberger Berman fund seeks to own higher-quality names, with fundamental sell discipline and attention to factor risk.

The ETF invests in names the portfolio management team believes to be worth owning in any macro environment. With a focus not only on free cash flow but also the sources of free cash flow, NBDS includes only those stocks where a disruptive process/technology is mature enough to contribute to the bottom line and durable enough to withstand downside scenarios.

This approach seems to be working. Since its inception, NBDS has outperformed ARKK by nearly 3,000 basis points.

NBDS Is the Anti-ARKK

“Getting growth right is likely to be more difficult going forward than it was in the past, perhaps requiring more attention,” said Neuberger Berman ETF specialist Fred Edwards. “As investors evaluate options for growth, it’s becoming increasingly important for investors to ask whether or not the tools in their toolkit are compensating them for the risk they’re taking.”

NBDS is one of three actively managed ETFs Neuberger Berman launched in April. The ETFs are an extension of the firm’s thematic equity investment capabilities using traditional fundamental equity research along with alternative data capabilities and consideration of material environmental, social, and governance factors.

For more news, information, and analysis, visit the Megatrends Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X