Core Viewpoint - The article discusses the concentration risk associated with megacap tech firms in the S&P 500 and suggests that investors consider the Goldman Sachs Future Tech Leaders Equity ETF (GTEK) as a potential investment option for 2026, which focuses on innovative companies outside the concentrated group [1]. Group 1: ETF Performance and Signals - GTEK's price recently rose above its 50 and 200-day Simple Moving Averages (SMAs), which is traditionally viewed as a buy signal, with a price of $40.21 as of December 26th [2]. - The fund has shown momentum without entering "Overbought" territory, indicating potential for continued performance [2]. Group 2: Fund Strategy and Characteristics - GTEK charges 75 basis points and employs an active management approach, targeting next-generation disruptors rather than tracking an index [3]. - The ETF excludes companies with market caps over $100 billion and invests in sectors beyond information technology, including healthcare and direct marketing retail, using fundamental metrics to assess quality and growth [4]. Group 3: Historical Returns and Future Outlook - GTEK has returned 24.4% year-to-date, outperforming its ETF Database Category average, and has achieved a 24.7% return over the last three years [5]. - The active focus on innovative firms outside the typical megacap tech companies positions GTEK as a strong candidate for investors looking to enhance their tech allocations in the near future [5].

Core Insights - The Ark Innovation ETF (ARKK) has performed well, up over 35% year to date and more than 78% over the last two years, benefiting from a favorable environment for disruptive innovators [2][4] - Despite recent weaknesses in the growth trade, particularly in the Nasdaq 100, the long-term outlook for disruptive innovation and growth themes remains positive for the next two to three years [3][4] - The Ark Innovation ETF is currently down approximately 17% from its recent highs, suggesting a potential buying opportunity [4][7] ETF Comparisons - The Ark Innovation ETF is characterized by high volatility, with a beta of 2.41, indicating a more turbulent investment compared to the S&P [6] - The Goldman Sachs Future Tech Leaders Equity ETF (GTEK) focuses on technology firms with market caps below $100 billion, with a weighted average market cap of $72.4 billion, and may be a safer alternative during market fluctuations [6][7] - Both ARKK and GTEK charge an expense ratio of 0.75% and employ active management strategies [7]

Group 1 - Active ETFs have gained significant traction among both retail and institutional investors, with technology being a particularly promising area for active investing [1] - The Goldman Sachs Future Tech Leaders Equity ETF (GTEK) charges a fee of 0.75% and focuses on high-conviction investments in emerging tech companies that are expected to drive global innovation [2] - GTEK has achieved a year-to-date return of 19%, outperforming the Vanguard Information Technology Index Fund (VGT), which returned 15.9%, as well as the ETF Database Category and FactSet Segment averages of 18.1% and 16.5% respectively [3] Group 2 - GTEK's portfolio includes companies like Cadence Design Systems (CDNS), which has returned 18% year-to-date and boasts a return on equity of 21.7%, focusing on integrated circuits and electronic devices [3] - Another significant holding is Snowflake, Inc. (SNOW), which has delivered a remarkable 45.4% return year-to-date, specializing in cloud data warehousing and data analysis software [3] - The concentrated investment strategy of GTEK may provide an attractive addition to existing portfolios, particularly in light of concentration risk in the tech sector [3]