When will the turn come when it comes to interest rates? That’s the question that’s beguiled investors for more than a year now. Investors and advisors of all sizes are watching rates closely as a key macroeconomic signal. Many investors have started to look somewhat askance at their expensive U.S. equities allocations. Tech has dominated growth investing, but if pieces fall in the right direction, a growth investing boost could still appeal.
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Adding more growth options to a portfolio may stand out as a bit of a surprising idea, given the persistence of headwinds like inflation and, of course, rates. However, the robust performance of the broader U.S. economy and even the global economy save for China merits attention.
Why Look to Growth Investing Now?
Outside of tech, which remains very expensive in the mega-cap space, growth investing can continue to provide an important set of benefits to a portfolio. While many investors are adding current income to a portfolio, it’s important not to forget the star funds that can provide that juicy capital appreciation. Indeed, a patient outlook now could eventually see rate cuts give that big kickstart that growthier options are looking for.
A strategy like the Natixis Loomis Sayles Focused Growth ETF (LSGR) could present just such a long-term option. Charging 59 basis points (bps), its active approach doesn’t just default to the biggest tech names. Its remit requires firms to meet deep fundamental research standards and the expectations of their active managers.
Adding more growth investing exposures may represent a big swing to many, especially given electoral, geopolitical, and other risks still floating around. However, the right growth approach, even to replace a more staid growth index, could be just the portfolio tune-up many investors are looking for.
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