--- title: How Innovation-Focused Strategies May Provide Both Offense and Defense description: How innovation investing protected the downside in Q1 image: https://insights.evolutionarytree.com/hubfs/2020.06-Blog-15-LinkedIn-2.png --- [![Evolutionary Tree Capital Management](https://insights.evolutionarytree.com/hubfs/Evolutionary_Tree_Capital_October2019/Image/logo.png)](https://evolutionarytree.com/) - About - [Our Firm](https://www.evolutionarytree.com/content/about-our-firm) - [Our Mission](https://www.evolutionarytree.com/content/our-mission) - [Key Strengths](https://www.evolutionarytree.com/content/key-strengths-evolutionary-tree) - Philosophy - [How We're Different](https://www.evolutionarytree.com/content/What-Differentiates-Us) - [Core Beliefs](https://www.evolutionarytree.com/content/core-beliefs) - [Our Philosophy](https://www.evolutionarytree.com/content/our-philosophy) - Investment Approach - [Approach](https://www.evolutionarytree.com/content/investment-approach) - [Investment Process](https://www.evolutionarytree.com/content/investment-process) - 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[Subscribe](https://info.evolutionarytree.com/subscribe-to-the-evolutionary-tree-blog) - [Contact](https://www.evolutionarytree.com/content/contact-us) # How Innovation-Focused Strategies May Provide Both Offense and Defense [![Share on linkedin](https://7528302.fs1.hubspotusercontent-na1.net/hub/7528302/hubfs/raw_assets/public/mV0_d-web-default-modules_hubspot/img/linkedin-color.png?width=24&name=linkedin-color.png)](https://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Finsights.evolutionarytree.com%2Fblog%2Fhow-innovation-focused-strategies-may-provide-both-offense-and-defense%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [![Share on twitter](https://7528304.fs1.hubspotusercontent-na1.net/hub/7528304/hubfs/raw_assets/public/mV0_d-web-default-modules_hubspot/img/twitter-color.png?width=24&name=twitter-color.png)](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Finsights.evolutionarytree.com%2Fblog%2Fhow-innovation-focused-strategies-may-provide-both-offense-and-defense%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Finsights.evolutionarytree.com%2Fblog%2Fhow-innovation-focused-strategies-may-provide-both-offense-and-defense%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=) [![Share on email](https://7528311.fs1.hubspotusercontent-na1.net/hub/7528311/hubfs/raw_assets/public/mV0_d-web-default-modules_hubspot/img/email-color.png?width=24&name=email-color.png)](mailto:?subject=Check+out+https%3A%2F%2Finsights.evolutionarytree.com%2Fblog%2Fhow-innovation-focused-strategies-may-provide-both-offense-and-defense%3Futm_medium%3Dsocial%26utm_source%3Demail&body=Check+out+https%3A%2F%2Finsights.evolutionarytree.com%2Fblog%2Fhow-innovation-focused-strategies-may-provide-both-offense-and-defense%3Futm_medium%3Dsocial%26utm_source%3Demail) ![PSN Top Guns 1 Stars 1Q 2020](https://insights.evolutionarytree.com/hs-fs/hubfs/Blog%20and%20Social%20Images/PSN%20Top%20Guns%201%20Stars%201Q%202020%20(1).png?width=114&name=PSN%20Top%20Guns%201%20Stars%201Q%202020%20(1).png)If you missed our [recent press release](https://insights.evolutionarytree.com/blog/press-release-evolutionary-tree-flagship-strategy-wins-psn-top-guns-award), we are proud to have been awarded one of PSN’s Top Guns within the large cap growth manager universe for 1Q20. The Russell 1000 Growth Index fell -14.10% during the worst quarter for stocks since 1987. In comparison, our strategy was only down -5.22% (gross of fees), outperforming the Index by 8.88ppts. *See important information below on gross and net performance.*\* ###### [![2020.Q1-ETree-PSN-LargeCapGrowth.full](https://insights.evolutionarytree.com/hs-fs/hubfs/Blog/Q1.2020%20PSN/2020.Q1-ETree-PSN-LargeCapGrowth.full.png?width=600&name=2020.Q1-ETree-PSN-LargeCapGrowth.full.png)![2020.06-ETree-PSN-peers](https://insights.evolutionarytree.com/hs-fs/hubfs/2020.06-ETree-PSN-peers.png?width=600&name=2020.06-ETree-PSN-peers.png)](https://insights.evolutionarytree.com/hubfs/Blog/Q1.2020%20PSN/2020.Q1-ETree-PSN-LargeCapGrowth.full.png) **What drove the strong relative performance during the first quarter?** **In a word: *Innovation*. ** Evolutionary Tree is a specialist in innovation-focused, concentrated growth strategies. The firm believes that investing in leading innovators driving secular trends is the best way to add value for clients over the long term. In our experience, in times of crisis or recession, consumers and businesses often adopt certain innovations at a faster pace. Given the pandemic-driven stay-at-home and work-from-home dynamic, many secular trends and evolutionary shifts—such as the shift to e-commerce, video streaming, and cloud computing—have seen acceleration. The team at Evolutionary Tree believes that these behavioral changes will prove to be durable.  Recessions often drive consumers and businesses to adopt innovations that offer cost reduction, convenience, or a better way of performing an activity. **In short, tough times accelerate the future. Innovation-focused portfolios allow clients to benefit from these dynamics.** In addition to offering growth opportunities, innovation-focused strategies can, at times, *be lower risk* than other investment strategies, especially when leading innovators benefit from structural shifts. The 2020 pandemic and bear market demonstrates that innovation-focused strategies may offer both offense and defense. Innovation-focused portfolios, such as [Evolutionary Tree’s Beagle US Innovators strategy](https://evolutionarytree.com/resources/materials), have held up exceptionally well in the current environment. Additionally, the firm believes owning leading innovators will also allow clients to be well positioned when the economy finally re-opens.            If you are interested in reading our PSN Top Guns official press release, please [click here](https://insights.evolutionarytree.com/blog/press-release-evolutionary-tree-flagship-strategy-wins-psn-top-guns-award).   **[![\[Watch Webinar\] Innovation Investing: Navigating Accelerating Change in an Evolving Economy (recorded May 5, 2020)](https://no-cache.hubspot.com/cta/default/4802837/a2aaf374-0acb-427d-b82c-f90a60543de2.png)](https://cta-redirect.hubspot.com/cta/redirect/4802837/a2aaf374-0acb-427d-b82c-f90a60543de2)** ### Receive our latest views on *investable innovation* # *This site and the content within is intended for US-based investors only.* # *The information and views expressed herein are provided for informational purposes only and do not constitute investment advice. If performance is shown, it is based on a composite of actual trading in client accounts, but is not necessarily reflective of the performance of any individual client account. Differences in account size, timing of transactions, and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. Differences in the methodology used to calculate performance may also lead to different performance results than those shown. Past performance does not guarantee future results. Any projections, outlooks, or estimates contained herein are forward looking statements based on specific assumptions that are current as of the date indicated, subject to change without notice, and should not be construed as indicative of any actual events that have occurred or may occur. The inclusion of particular investments is not intended to represent, and should not be interpreted to imply, a past or current specific recommendation to purchase or sell a security and should be considered in the context of an overall portfolio. Investing in equity securities involves risk and principal loss is possible. Nothing contained herein constitutes investment, legal, tax, or other advice and should not be relied upon in making an investment or other decision. Investors should always obtain and read up-to-date investment services material before deciding whether to appoint an investment advisor.* See our Thought Pieces on Innovations, Evolutionary Shifts, and Secular Trends. ** [Click Here](https://evolutionarytree.com/content/thought-pieces)** [![Evolutionary Tree](https://insights.evolutionarytree.com/hubfs/Evolutionary_Tree_Capital_October2019/Image/footer-logo.png)](https://evolutionarytree.com/) ## GET IN TOUCH 1199 N. 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