The Neuberger Berman Disrupters ETF (NBDS) seeks to invest in companies driving technological and business model disruption across various sectors. This actively managed innovation ETF targets firms that are transforming industries through breakthrough technologies, digital platforms, or revolutionary business approaches.
How It Works
NBDS employs an active management approach where Neuberger Berman's research team identifies companies positioned to benefit from disruptive trends like artificial intelligence, automation, biotechnology, and digital transformation. The fund uses fundamental analysis to select 30-50 concentrated holdings, with position sizes based on conviction levels rather than market capitalization. Portfolio rebalancing occurs as opportunities emerge, allowing for tactical adjustments to capture evolving disruptive themes.
Key Features
- Active management by experienced Neuberger Berman team specializing in identifying early-stage disruptive companies before mainstream adoption
- Concentrated portfolio of 30-50 high-conviction positions allows for meaningful exposure to each disruptive theme
- Recently launched in 2022, providing access to current disruptive trends like AI and digital transformation
Risks
- This ETF can lose significant value if disruptive technology investments fail to gain adoption, as concentrated holdings amplify individual stock volatility
- Active management risk means the fund may underperform passive alternatives if stock selection proves incorrect or timing is poor
- Innovation stocks typically experience high volatility and could decline 40-60% during market downturns as growth stocks face valuation compression
Who Should Own This
Best suited as a satellite holding (5-15% of equity allocation) for aggressive growth investors with 7+ year time horizons and high risk tolerance. Appropriate for investors seeking exposure to disruptive innovation themes who can withstand significant volatility. Works well for younger investors building long-term wealth through emerging technology trends.