This is an actively managed ETF with no tracking index. It combines top-down thematic research with bottom-up company analysis to select companies leading disruptive innovation. It concentrates on growth companies that have entered a phase of rapid market adoption and have a clear path to monetization.

It invests in long-term structural growth themes such as artificial intelligence and digital transformation, and suits growth-oriented investors who prefer active stock selection over a passive index.

AllianceBernstein launched the ETF in 2023, and it uses an active management approach.

The fund uses top-down thematic research to identify disruptive innovation sectors, then uses bottom-up company analysis to select individual companies in a phase of rapid growth. It broadly covers industry-reshaping themes such as artificial intelligence, cloud, fintech, clean technology, and digital commerce, and holds global growth stocks.

• Discretionary active management without index tracking allows the fund to adjust its thematic concentration
• A dual research structure combines top-down thematic analysis with bottom-up company selection

Assets under management (AUM) stand at $3.1B, and the expense ratio is 0.65% per year.

Unlike passive ETFs that target the same innovation growth theme, this fund can build its portfolio without index-tracking constraints, so it can flexibly adjust sector and regional weightings to market conditions. However, because it is actively managed, its fees tend to be higher than those of comparable passive products.

Against the backdrop of expanding demand for artificial intelligence and cloud infrastructure, there were periods when the portfolio's tech growth holdings contributed notably to returns. The portfolio also shows a pattern in which valuation pressure across growth stocks rises and falls with changes in interest rates.

As institutional and retail investor interest in disruptive innovation themes has grown, the fund has attracted inflows, and those inflows tend to strengthen when investors favor growth stocks.

Its strength is the active stock selection of a professional management team, while its main risks are the high fees and the volatility that comes with a concentration in growth stocks.

Similar ETFs covering the same innovation theme include INFL, FEOE, MGNR, CCNR, and GEME, shown in the table, each with a different thematic approach and fee structure. Representative passive alternatives for the disruptive innovation theme include ARKK from ARK Invest and QQQM from Invesco. Investors who want to focus on cloud software can also consider WCLD, and those who want a higher weighting in semiconductors can consider SOXX.

Here are the points to review before investing in FWD. Because this is an actively managed ETF, it is important to thoroughly check the fee level, the manager's capabilities, and the portfolio concentration in advance.

Because the portfolio is concentrated in growth stocks, short-term drawdowns can be large during periods of rising interest rates and economic slowdown. Active management risk and high fees can also affect long-term returns.

It suits growth-oriented investors who want to invest in disruptive innovation companies through the discretionary judgment of a professional management team. If cost is your priority, a passive innovation ETF may be the better fit; if you trust the manager's capabilities, FWD is an option.