Growth stocks delivered again in 2020, but the truly remarkable performances are sported by names with the disruptive growth variable.
Not surprisingly, stock-picking in the disruptive growth universe is tricky. Advisors can ease that burden with WisdomTree’s new Disruptive Growth Model Portfolio.
“The WisdomTree Disruptive Growth ETF Model Portfolio targets structural growth themes that are believed to drive innovation across different industries and segments of society in the future,” according to the issuer. “The themes and affiliated ETFs selected for inclusion will typically have above-market growth projections. The model portfolio seeks maximum long-term capital appreciation and may include both WisdomTree and non-WisdomTree ETFs.”
The model portfolio provides an ideal avenue to thematic exchange traded funds, one of the fastest-growing segments of the broader ETF space.
“Thematic ETFs seek to capture investment opportunities in companies or sectors created by long-term structural trends,” according to WisdomTree research. “Examples include demographic and social shifts such as diversity, inclusion and equality; disruptive technologies such as cloud computing; geopolitical changes such as globalization; and environmental pressures such as climate change.”
Growing Innovation and the PLAT ETF
Be it e-commerce, fintech, healthcare innovation, streaming entertainment or other concepts, one of the reasons this model portfolio is relevant for 2021 is because it provides exposure to an array of seismic shifts taking place in the investing landscape, a trend thematic ETFs leverage better than old guard, broad counterparts.
“Similarly, we expect positive thematic performance to be driven by emerging structural shifts, and not reliant on shorter-term cyclical changes or technical signals,” according to WisdomTree.
One ETF that capitalizes on those structural shifts is the WisdomTree Modern Tech Platforms Fund (PLAT), which is part of the aforementioned model portfolio.
PLAT offers investors access to companies that are generating revenue from platform business models – these are companies with non-linear business models focused on creating value by facilitating interactions between two or more groups through technology.
“Our expectation is for platforms to disrupt competitive landscapes, and to gain market share at the expense of traditional, linear businesses—while doing so with better economies of scale and potential for long-term profitability. PLAT can replace or complement both active and passive growth-oriented investment strategies,” concludes WisdomTree.
For more on how to implement model portfolios, visit our Model Portfolio Channel.