Technological advances or innovative disruptions will change the way interactions take place around the world, and many of these new developments offer attractive growth opportunities for exchange traded fund investors to capitalize on.
“We seek to capture long-term exponential growth andoffer capital appreciation created by disruptive innovation,” Catherine Wood, Chief Investment Officer and CEO of ARK Invest, said on the recent webcast (available On Demand), A Road Map to Investing is the Future of Transport.
ARK’s ETF strategies provides access to disruptive innovation, aiming for exponential growth in the public market, without the costs, high carry, and illiquidity of venture capital funds. Due to overcrowding in the private space, there is diminished opportunities in the pre-IPO space. Meanwhile, there are still many opportunities to capture exponential growth in the public markets if one is capable of identifying leaders, enablers and beneficiaries of innovation or those positioned for future growth.
Accordingly, ARK has identified five areas where innovation can translate to growth, including automation, energy storage, DNA sequencing, next generation internet and blockchain technology.
Automation is one interesting area of growth as the industry is still in its nascent stages. For example, autonomous travel may be set for a growth spurt as compelling economics will drive consumer adoption, Tasha Keeney, Analyst at ARK Invest, argued.
ARK research shows that the price of autonomous travel will be roughly half the cost to drive a personal car. Autonomous taxis are expected to exhibit an all-in cost per mile cost of $0.35 by 2020, whereas personal cars show an all-in cost per mile of $0.70.