Megaphone icon ETF Database is now VettaFi. Read More >
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
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • 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
    • 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
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. TrueMark Investments on Why to Buy Into the Tech Dip
News
Share

TrueMark Investments on Why to Buy Into the Tech Dip

Aaron NeuwirthMar 17, 2021
2021-03-17

After the pandemic took hold in 2020, technology greatly expanded thanks to businesses relying on working from home strategies, along with biotech’s importance. A recent dip in tech stocks may cause concern for some. ETF Trends caught up with Michael Loukas, Principal & CEO of TrueMark Investments, who shared his thoughts on investors with a long-term horizon buying into this dip, along with other knowledge focused on the Artificial Intelligence & Deep Learning ETF (LRNZ).

Looking at the current adjusted world, when it comes to the market evolving in regards to tech, Loukas explains, “The global demand for tech will continue to skyrocket. Pandemic-related lockdowns certainly increased the intensity of the spotlight on certain tech segments, but the appetite for these technologies isn’t going to simply vanish as covid restrictions come to an end. We’ve been pounding the table on this for the better part of twelve months. The trends were already in place; the pandemic simply sped up the timeline. As the world continues to adjust, there is absolutely no question that the “new normal” will include a major uptick in the presence of technology in our daily lives.”

As far as areas or trends related to tech that investors should be looking into, Loukas states, “We’re big believers in the growing role of Artificial Intelligence and Deep Learning in various categories. It’s the focal point of LRNZ. A variety of valid trends have been receiving attention lately, particularly in the areas of communication, robotics, gaming, autonomous transportation, space, etc., and rightfully so. But as investors, we’re focused on the impact of Deep Learning in any of these areas. Deep Learning technologies can represent such a pronounced competitive advantage for tech-based companies that it’s important we stay versatile enough to identify potential category killers in whichever respective technology segment they arise. It’s an approach that dovetails perfectly with our active management philosophy.”

When considering which secular trends will outlive this recent rising rate-induced sector rotation, Loukas makes it clear, “The rate induced sector rotations are often misinterpreted as a complete abandonment of growth stocks as investors turn their attention to dividend and value characteristics. In reality, secular growth trends tend to survive intact once the dust settles. However, these cycles do place a heightened emphasis on rewarding growth stocks with accelerating fundamentals while simultaneously punishing what are simply “story stocks.” I think investors have definitely seen the latter half of that equation prove out recently. Moving forward, there are quite a few secular growth trends that can be found in the categories and sub-sectors of cybersecurity, cloud migration, software-as-a-Service (SaaS), gaming, and biotech.”

What Can We LRNZ?

As noted, tech has been very popular for the work from home environment and in the medical area. When looking at the role LRNZ has played, Loukas explains, “In our opinion, these industries are great examples of trends that were in motion before the pandemic economy. Yet it’s fairly easy to see how they were thrust into the spotlight with the shift to remote work and the ensuing race for a covid vaccine.”

He continues, “At its core, LRNZ believes in the “winner take all” phenomenon in tech, meaning the ETF invests in companies with the potential to be category killers. A massive increase in the use of AI & Deep Learning within companies that focus on technologies related to drug discovery or the irreversible digitalization of the economy, for example, has allowed us to better identify stocks with increasing fundamentals both before AND throughout the pandemic economy, giving us greater insight into the potential category killers in these segments.”

Regarding the weighting for the fund, Loukas states, “LRNZ is unique in that it’s a fairly concentrated portfolio. It typically holds 20-25 names when fully invested. As we identify tech segments progressing through hyper-growth cycles, the fund will attempt to own a group of 1-3 names that will likely include the potential “winner” of the segment. As that winner emerges, we then consolidate into it and harness the resulting secular growth cycle. That process can take time, making hasty portfolio changes unwise. However, the past twelve months has allowed many category killers to begin distancing themselves from the competition, allowing us to reduce the number of portfolio names in some segments and add new names in others. Biotech and gaming are two sectors that have seen a larger presence in that context.”

Finally, as far as the long-term goals of LRNZ go, Loukas notes, “Simply put, the goal of LRNZ is to identify tech segments that are entering a hyper-growth phase and invest in the segment’s future category killer. More specifically, the fund focuses on companies that possess this potential because they adeptly utilize AI & Deep Learning as a distinct competitive advantage.”

He continues, “Why is this relevant? Because a rather large chunk of market upside performance over the past ten years was delivered by a select group of category killers we commonly refer to as FAANG. We tend to hear a great deal about disruptive technologies these days, but less discussion of what happens after disruption. Disruption gives rise to new tech segments, but which companies will end up becoming the category killer? Seldom does the journey to becoming a household name exist in a vacuum. There will eventually be a few major winners and many more losers in a crowded new tech segment. LRNZ is designed to try and identify those companies best equipped to survive a winner-take-all environment, much like the those that gave rise to the members of FAANG a decade ago.”

For more information, visit truemarkinvestments.com.

This article originally appeared on ETFTrends.com.


Content continues below advertisement

» Popular Pages

  • Tickers
  • Articles

Jul 01

Permian Highway Pipeline Reaches FID for Expansion

Jul 01

Report Shows Blockchain Will Have Impact on Businesses

Jul 01

Despite Market Fears, the Worst Might Be Over for Bonds

Jul 01

July Brings Hope for Sleepy Growth Stocks

Jul 01

Ban on Russian Gold Imports Might Boost Precious Metal

Jul 01

Leveraged Loans Remain Useful to Income Investors

Jul 01

What Goes Up Must Come Down: Beating Volatility With FLLV

Jul 01

NZUS: Efficient Avenue to Paris-Aligned Investing

Jul 01

ETF 360: Q&A With Matt Camuso From BNY Mellon

Jun 30

Are U.S. Equities Overrated?

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

XLE

Energy Select Sector SPDR...

ARKK

ARK Innovation ETF

SCHD

Schwab US Dividend Equity ETF...

XLV

Health Care Select Sector...

VYM

Vanguard High Dividend Yield...

SMH

VanEck Semiconductor ETF

VTI

Vanguard Total Stock Market...


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
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
  • © ETF Flows LLC
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