As investors look to growth opportunities ahead, many are looking to ongoing technological breakthroughs and targeted ETF strategies to capture these growing segments and enhance a diversified portfolio.
In the recent webcast, Big Ideas: Technological Breakthroughs Investors Shouldn’t Miss in 2020, Brett Winton, Director of Research, ARK Invest, tried to help investors identify investment opportunities in innovative breakthroughs.
“ARK’s investment process recognizes that true disruptive innovation causes rapid cost declines and demand growth, cuts across sectors and geographies, and spawns further innovation, stimulating growth over extended time horizons,” Winton said.
Looking to the year ahead, Winton highlighted a number big ideas for 2020. For example, deep learning is expected to create more economic value than the proliferation of the Internet. While the Internet added $10 trillion to the global equity market cap within two decades, deep learning could add $30 trillion by 2037.
Streaming media is projected to grow at a 35% annual rate from an estimated $86 billion in 2019 to $390 billion in 2024.
Using Wright’s law, ARK Invest calculated that electric vehicle sales will rev up to 37 million units in 2024, or six times higher than the forecasted agencies’ consensus estimates. Wright’s Law states that for every cumulative doubling of units produced, costs will fall by a constant percentage, reflecting growing efficiency in the production of new goods.
Automation is anticipated to add $800 billion in U.S. GDP over the next five years and $12 trillion for the next 15 years.
Autonomous ride-hailing may be worth over $1 trillion today, and it could grow to $5 trillion by 2024 and $9 trillion by 2029.
The global 3D printing market could scale to $97 billion by 2024 as it compounds at a 65% annual rate.
Aerial drones are beginning to take on a larger presence, and drone delivery platforms could generate $275 billion in delivery revenue, $39 billion in hardware sales and $12 billion in mapping revenue by 2030.
In the healthcare industry, the cost of sequencing a human genome could fall to $200 by 2024, and next generation DNA sequencing revenues could grow at an annual rate of 43% to $21 billion. Meanwhile, biotechnology research and development efficiency could add $9 trillion to the market capitalization of therapeutic companies in the next 5 years.
The increasing reliance on digital technology is also expanding into the financial industry where U.S. digital wallets could be valued at $800 billion by 2024, or 27 times lager than the $29.5 billion today.
As a way to tap into growth opportunities in these various fields of technological innovations, ARK Invest has come out with a suite of innovation-focused ETF strategies. For instance, ARK Invest’s flagship ARK Innovation Fund (NYSEArca: ARKK) seeks to invest in the cornerstone companies taken from healthcare, technology and industrial sectors that focus on investing in disruptive innovation. Such companies may include ones that benefit from big data, cloud computing, cryptocurrencies, the sharing economy, genomic sequencing, molecular medicine, agricultural biology, 3D printing, energy storage, and autonomous vehicles.
For more targeted exposures, investors can look to the ARK Industrial Innovation ETF (NYSEArca: ARKQ), ARK Web x.0 ETF (NYSEArca: ARKW), ARK Genomic Revolution Multi-Sector Fund (NYSEArca: ARKG), ARK Fintech Innovation ETF (ARKF) and ARK 3D Printing ETF (CBOE: PRNT).
Additionally, the ARK Israel Innovative Technology ETF (Cboe: IZRL) provides access to Israeli companies whose main business operations are causing disruptive innovation in the areas of genomics, health care, biotechnology, industrials, manufacturing, the Internet or information technology.
Financial advisors who are interested in learning more about innovative growth opportunities can watch the webcast here on demand.