Investing in innovation, sustainability, and technology requires a specific approach and environment for success. One of the most high-profile examples may be taken from Cathie Wood and Ark Invest.
Cathie Wood is Ark Invest’s founder and CEO. She invests in early-stage companies investing in unproven and unscaled technology and business models. However, she takes a long-term position with a focus on how these companies will disrupt and revolutionize their industries in the future and gain significant market share thereafter. This means that large investments need to be made into companies that are either not generating any revenue or are making significant yearly losses as they scale their business.
ARK believes that its existing investment philosophy and process inherently considers ESG principles that align with the United Nations Sustainable Development Goals. Hence, their strategy is fully aligned with a more sustainable world and drive towards net zero emissions.
ARK’s five innovation platforms are Artificial Intelligence (AI), Energy Storage, Robotics, Genomic Sequencing and Blockchain Technology. According to ARK’s research, these five innovation platforms are converging to create unprecedented growth trajectories.
Artificial Intelligence is the most important catalyst, its velocity cascading through all other technologies. The market value of disruptive innovation platforms could scale 40% at an annual rate during this business cycle, from $13 trillion today to $200 trillion by 2030. In 2030, the market value associated with disruptive innovation could account for most of the global equity market capitalization, according to Ark Invest.
An investor can invest in ARK’s investment strategy by purchasing shares in its Exchange Traded Fund (ETF) stock market listing. There are two main reasons to buy and hold this innovation-oriented ETF. Firstly, ARK Innovation ETF offers investors exposure to ultra-high-growth areas of the economy. The fund invests in companies leading the way in fields such as genomics, fintech, robotics, artificial intelligence, and clean energy. These sectors have the potential to transform the world and generate huge returns for investors who are willing to take on some risk and volatility.
Secondly, Cathie Wood is a highly regarded fund manager with big successes like Tesla and has also been a big holder of superstar stock and chipmaker Nvidia. ARK Innovation ETF is actively managed by Wood and her team of analysts, who have a proven track record of identifying and investing in winners. Wood and her team conduct rigorous due diligence on the companies in the portfolio and adjust their positions daily to take advantage of market opportunities and trends. All their analysis and positions are fully transparent and available on Ark Invest’s website.
Since 2015, Ark has invested in companies disrupting their industries with innovative technologies, such as Tesla, Roku, and Shopify. Since inception, the fund has delivered impressive returns of over 121%, although its performance has lagged the benchmark S&P 500 index over this period. Other technology focused ETFs have also outperformed Ark Invest. Nevertheless, given Ark’s focus on early disruptive companies and market volatility, short to medium term performance varies. Cathie Wood is confident about her predictions for 2030, which if come true could produce seismic returns for long term holders. Cathie Wood is also very bullish on Bitcoin where previous forecasts have suggested that a Bitcoin could be valued at US$ 650,000 compared to just over US$ 40,000 now. Do your own research.
