FDN: Robust Growth With Terrible Valuation

Vasily Zyryanov
2.13K Followers

Summary

  • FDN is a ~$10 billion portfolio cramming mega/large-cap tech names with strong growth prospects, though coming with stupendous multiples, even for the traditionally generously valued IT sector.
  • FDN is an ETF with what I would like to call an ultimate growth mix, though with quality being also rather strong, which slightly offsets risks.
  • As 2022 is looming, with all the monetary policy shifts it should bring, FDN's risk/reward profile does not look tilted towards the reward to me.

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Today, we are discussing yet another investment vehicle focused on the tech sector that delivered outsized returns in the past but might not be as successful going forward assuming mounting risks, predominantly stemming from interest rates potentially catalyzing

This article was written by

2.13K Followers
Vasily Zyryanov is an individual investor and writer.He uses various techniques to find both relatively underpriced equities with strong upside potential and relatively overappreciated companies that have inflated valuation for a reason.In his research, he pays much attention to the energy sector (oil & gas supermajors, mid-cap, and small-cap exploration & production companies, the oilfield services firms), while he also covers a plethora of other industries from mining and chemicals to luxury bellwethers.He firmly believes that apart from simple profit and sales analysis, a meticulous investor must assess Free Cash Flow and Return on Capital to gain deeper insights and avoid sophomoric conclusions.While he favors underappreciated and misunderstood equities, he also acknowledges that some growth stocks do deserve their premium valuation, and its an investor's primary goal to delve deeper and uncover if the market's current opinion is correct or not.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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