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KOMP ETF: Diversifying Through Innovation And Disruption

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  • The ETF is extremely well diversified through 400 of the most disruptive companies in 10 countries, primarily the U.S.
  • Although KOMP widely outperformed the broader tech market, it slightly underperformed the prominent ARK Innovation ETF.
  • After an unprecedented surge throughout 2020, the included companies of KOMP are trading in thin air in terms of valuations.
  • Investors should therefore expect high volatility in coming years, and perhaps lower returns.

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SPDR S&P Kensho New Economies Composite ETF (NYSEARCA:KOMP) offers investors a chance to invest in innovation and disruption through a diversified fund. The ETF tracks a tier-weighted index of U.S-listed companies

This article was written by

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I am a 22 year old investor with a Bachelors degree in Finance and Business. My investing strategy is focused on finding the best opportunities from every sector: value or growth - there is value in everything. For all my investment decisions I undertake extensive research, collecting relevant data, charts and graphs for the given company. The three most crucial ratios for my analysis are margins, CAGR revenue growth and marketing spend as a % of revenue. These measures are all based on 2024 estimates in order to evaluate the given moat of a company/stock. Therefore, all my investments are long-term, with the exception of large fluctuations in the fundamentals of an investment or drastic valuation changes. I hope that I am able to share some of my investment opinions with you and look forward to learning more in the process! Best regards

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

All predictions and projections are solely median estimates by financial analysts and are due for uncertainty. All graphs, charts, etc., may not be up to date and only represent the latest available data. I do not guarantee the accuracy for any of my mentioned price targets, and thus, they should not be used as investment advice.

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Comments (4)

The risk highlighted by the author that the inflated small caps constituting the largest holdings would crash has come to pass and KOMP has been underperforming QQQ in recent days. The rules governing the KOMP portfolio should be revised to lessen this risk. A micro-cap like VUZI should not be able to rise to over 5% of a 400 stock portfolio that includes AAPL, TSLA, GOOG, and FB.
The author fails to understand the word “disruption.” The word was coined by Christian Clayton. A disruptive technology is one that produces an inferior product at a lower cost. In this situation the market leader loses its lead. None of the companies mentioned are disruptive.
@locum2 - I presume you meant to say "superior" rather than "inferior".
A less expensive, inferior product does not meet the definition of disruptive. A generally-accepted term would be "knock-off".
KOMP's top five holdings appear to be very lucritive. Great point of them being possibly overly diversified, while Arkk on the other hand only holds a basket of 55 stocks as you noted, but performed noticably better. Arkk did drop in price much more significantly from the all time high. Also, beware of stock overvaluation. Thankyou for the article.
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