Advertisement
mutual funds

Funds That Focus on Innovators

Invest in a collection of groundbreaking companies via these actively managed funds and ETFs.

Given the difficulties in determining whether a company can translate innovation into profits, you may prefer professional help in spotting the next big thing. Two mutual funds, Fidelity New Millennium (symbol FMILX) and Baron Opportunity (BIOPX), are worth a look. New Millennium manager John Roth holds a mix of sometimes-volatile, high-growth companies balanced with steadier, bargain-priced fare. Among his holdings: Tesla Motors (TSLA), Google (GOOG) and Illumina (ILMN). He also owns KEYW Holding (KEYW), a cyber-security play. Roth keeps his stakes in the most speculative com­panies small at the outset, increasing his investment only as a company proves itself. “The more long term the bet, the smaller the position,” he says. From the time Roth became New Millennium’s manager in July 2006 through December 31, the fund returned 9.6% annualized, compared with 7.4% for Standard & Poor’s 500-stock index.

Baron Opportunity manager Mike Lippert invests thematically. Current themes include DNA sequencing (Illumina is a top holding) and Big Data, a catchall phrase that refers to collecting and applying advanced analytics to massive quantities of fast-moving data. Lippert owns Acxiom Corp. (ACXM), a marketing company at the forefront of behavioral, or targeted, advertising, which harnesses information about consumers to serve up ads that are relevant to their interests. Other themes Lippert likes include mobile technology, cloud computing and electric cars. “You have to go where the growth is,” says Lippert, “but you have to be patient for some of these things to play out.”

Advertisement - Article continues below

A host of exchange-traded funds allow you to sample up-and-coming themes while diversifying your investment among several holdings. You can invest in cloud computing—external data storage that’s accessible from anywhere through the Internet—via First Trust ISE Cloud Computing Index (SKYY). The Robo-Stox Global Robotics & Automation ETF (ROBO) includes companies in such businesses as unmanned vehicles, 3D printers and medical robots.

Advertisement
Advertisement

Most Popular

What Trump's Payroll Tax Cut Will Mean for You
Tax Breaks

What Trump's Payroll Tax Cut Will Mean for You

President Trump issued an executive order to suspend the collection of Social Security payroll taxes. How much could it save you?
August 13, 2020
8 Things You Must Know About Retiring to the Carolinas
retirement

8 Things You Must Know About Retiring to the Carolinas

From the mountains to the beaches, North Carolina and South Carolina offer retirees plenty of incentives.
August 14, 2020
7 Surprisingly Valuable Assets for a Happy Retirement
happy retirement

7 Surprisingly Valuable Assets for a Happy Retirement

If you want a long and fulfilling retirement, you need more than money. Here are the most valuable retirement assets to have (besides money), and how …
August 3, 2020

Recommended

Bonds: 10 Things You Need to Know
Investing for Income

Bonds: 10 Things You Need to Know

Bonds can be more complex than stocks, but it's not hard to become a knowledgeable fixed-income investor.
July 22, 2020
Warren Buffett Stocks Ranked: The Berkshire Hathaway Portfolio
stocks

Warren Buffett Stocks Ranked: The Berkshire Hathaway Portfolio

The Berkshire Hathaway portfolio is a diverse set of blue chips and, increasingly, lesser-known growth bets. Here's a look at every stock picked by Wa…
August 15, 2020
The 7 Best Funds for Beginners
mutual funds

The 7 Best Funds for Beginners

New investors have it better than ever. The best mutual funds and ETFs for beginners feature no minimum investments, dirt-cheap fees and broad market …
July 30, 2020
Kip ETF 20: The Best Cheap ETFs
ETFs

Kip ETF 20: The Best Cheap ETFs

You can build a solid core for your portfolio and explore new opportunities with our favorite low-cost exchange-traded funds.
July 28, 2020