What Is the Neuberger Berman Disruptors ETF?

An actively managed ETF that includes firms reshaping existing sectors or creating new markets — so-called disruptors. The portfolio is concentrated in U.S. and international companies pursuing disruptive innovation themes such as artificial intelligence, cloud computing, autonomous driving, and gene therapy.

It is well suited for investors with a more aggressive risk profile who are willing to accept volatility in pursuit of long-term exposure to high-growth innovation themes.

The ETF is actively managed by Neuberger Berman.

"How Does the Neuberger Berman Disruptors ETF Invest?"

The portfolio managers select disruptor companies through bottom-up fundamental analysis, evaluating growth potential, earnings power, management quality, and industry leadership. Under normal market conditions, the fund concentrates the bulk of its assets in U.S. and international equities pursuing disruptive growth, while also including emerging-market companies and a broad range of market-capitalization segments.

• Actively managed theme-focused approach
• Global disruptor selection including emerging markets

Assets under management (AUM) stand at $172.0M, with a total expense ratio of 0.40% per year.

Unlike passive index-tracking ETFs, performance depends on the managers' stock selection — and as a result, the fee burden tends to be higher than that of passive peers.

Given its concentration in innovative growth names, the fund tends to be highly sensitive to the technology-stock cycle and broader risk appetite. It can deliver elastic upside in risk-on markets, but drawdowns may be relatively sharp in corrections, resulting in above-average volatility.

Thematic active ETFs tend to see capital inflows and outflows swing with overall risk sentiment and investor appetite for innovation themes. Compared with broad core ETFs, the fund sits in the small-to-mid AUM category, making flows more sensitive to shifts in the market environment.

Its active approach to disruptive innovation themes is a strength, while the elevated fee and the volatility tied to concentrated exposure represent its main drawbacks.

Within the same actively managed category, the comparison set includes fellow disruptor-thematic ETF FWD, the inflation-beneficiary ETF INFL, the international active equity ETF FEOE, the natural-resources active ETF MGNR, and the emerging-markets active ETF GEME. Each carries a different expense ratio and pursues a different theme, so the best choice depends on the area of exposure an investor wants. As a direct active alternative within the innovation-growth theme, ARKK is a natural comparison, while XLK offers broad tech-sector exposure and QQQ provides diversified access to large-cap growth names.

Key points to review before investing in NBDS. Because it is a thematic active ETF, it pays to check costs, concentration, and volatility in advance, and to weigh these against your own risk tolerance and time horizon for innovation-growth themes.

Given its concentration in innovative growth names and active-management profile, volatility tied to shifts in market risk appetite is the main risk. During corrections, drawdowns can be steeper than those of broad core ETFs, so diversification and a defined holding period are important.

The fund is a fitting choice for investors who want active access to disruptive innovation themes. Those who can stomach the costs and volatility and want to back long-term growth potential may consider it as a satellite allocation within a broader portfolio.