As markets cycle through equities and generate volatility, this can impact some innovative companies. However, pullbacks are often opportunities for investors to capitalize on the innovations that can change the world.
In the upcoming November 4th webcast How to Navigate Through Periods of Volatility with ARK Invest, Lara Crigger, managing editor of ETF Trends and ETF Database, will moderate a discussion with Dan White, CFA and client portfolio specialist with ARK Invest, and Matt Murphy, CFA, CAIA, and vice president of National ETF Sales with Resolute Investment Managers. The discussion will cover the current market environment and how volatility has impacted innovation broadly, why investors should keep an eye on innovative companies, and how exposure to these companies can enhance and complement a portfolio.
During volatile times, investors often think about the “risk” part of “risk vs. reward.” But thematic, multi-cap exposure to cross-section innovation, like the kind found in the ARK suite of disruptive technology ETFs, can capture long-term growth with low correlation of relative returns to traditional growth strategies and negative correlation to value strategies. ARK’s suite of innovative thematic funds includes:
- ARK Innovation ETF (ARKK)
- ARK Next Generation Internet ETF (ARKW)
- ARK Autonomous Tech. & Robotics ETF (ARKQ)
- ARK Genomic Revolution ETF (ARKG)
- ARK Fintech Innovation ETF (ARKF)
- ARK Space Exploration & Innovation ETF (ARKX)
- The 3D Printing ETF (PRNT)
- Israel Innovative Technology ETF (IZRL)
All of these funds offer exposure to a broad section of innovative thematic multi-cap companies. They can be used as tools to garner long-term growth or to diversify a portfolio, as there is little overlap with traditional indexes in these funds, making them ideal complements for traditional value/growth strategies. Dan Murphy and Matt White plan to discuss how the research for these funds combines both top-down and bottom-up processes to identify innovative companies across the market.
During market turmoil and periods of contraction, ARK opted to consolidate its highest conviction stocks instead of off-loading risk and trying to diversify. During periods of market expansion, ARK strategically initiated positions. By understanding the way in which innovative firms can react to market volatility, funds like ARKK have been able to outpace the S&P 500 and MSCI World Index over a five-year period. Since inception, ARKK is up 29.65 points. Over that same period, the S&P only gained 13.96 points.
These tactics allowed ARK’s funds to navigate periods of heightened volatility and provide investors with a low-cost, actively managed alternative to mutual funds in the appealing ETF wrapper.
Financial advisors who are interested in learning more about innovative strategies can register for the Thursday, November 4th webcast here.