“Innovation distinguishes between a leader and a follower.” — Steve Jobs
People tend to think of innovative companies as start-up companies driving change in the tech sector however innovation exists in all industries. These innovative companies can be either long standing, stable, or growth companies with track records that continue to innovate themselves through R&D. Examples of these can be either:
- Tech driven
- Cloud computing
- 5G mobile broadband
- Artificial intelligence (AI)
- Tech enabled
- Autonomous driving or ride sharing apps
- Traditional retailers offering flexible pickup options
- Internet of Things assist in digital asset management with predictive maintenance
- Non-tech
- Athletic apparel with innovative fabrics
- Hydrogen as a potential substitute for fossil fuels
- Skincare and cosmetics with personalized service and products
Why report investment in R&D?
Companies within the Russell 1000 benchmark, as shown below, that continuously focus on R&D despite economic headwinds, challenge the status quo. This promotes growth which in turn also leads to stronger shareholder returns. In simpler terms, companies that report investments in R&D tend to outperform those that don’t.
Growth of $100
Russell 1000 Index companies. Source: J.P. Morgan Investment
Management
Explore opportunities across all innovation driven sectors
- High growth are the next up-and-comping names that we may not all know about but that are in markets that are ripe for disruption.
- Growth companies challenge the status quo with a good mix of growth and profitability.
- Stable and mature companies are growth names that are rethinking how they can make change and create new opportunities.
- And lastly, cyclicals are focused on products and services that are in demand that help drive up higher margins.
Discover the NBI Innovators Fund sub-advised by J.P. Morgan Investment Management and ask your investment advisor to include it in your portfolio to further its diversification.
The Fund aims to aggressively seek capital appreciation for investors over the long term primarily by investing in global companies whose activities are partially focused on scientific and technological research.
