Investing in disruptions

The search for investment growth remains a central, critical goal for today’s investors especially during periods of market volatility. While finding a reliable source can be a challenge, if we look historically at small-mid cap growth companies, we see a potential for opportunity.

Historically, during challenging market environments, small and medium -sized companies that are focused on disruptive technologies seem to break out in their space. Examples include Microsoft* during the energy crisis and Groupon* during the global financial crisis.

Potential for opportunity amid volatility

S&P 500® Index 1970-2020

S&P 500® Index 1970-2020

Sources: Bloomberg, and Macquarie Investment Management.

Past performance does not guarantee future results. Charts shown throughout are for illustrative purposes only and not meant to predict actual results. Chart is for illustrative purposes and not representative of the performance of any specific investment.

What this means for investors:

We view investing in disruptions as a key potential opportunity in 2020, with technology-induced disruptions leading to secular expansion in several industries. With this in mind, we believe, there is potential for companies focused on disruptive technology. A small-mid cap growth equity strategy may provide this exposure and potential growth despite a short-term market drawdown.


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Source: Matt Rosoff, “BORN FROM THE ASHES: Big Tech Companies Founded During Busts and Recessions,” Businessinsider.com.

*Examples given are for illustrative purposes only. This is not a recommendation to buy or sell any security. The securities discussed should not be construed as investment recommendations.

IMPORTANT RISK CONSIDERATIONS

Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.

Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.

Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.

The views expressed represent the investment team’s assessment of the market environment as of April 2020 and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice and may not reflect the Manager's views.

All third-party marks cited are the property of their respective owners.

The S&P 500 Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.