With many exchange-traded funds, all an investor needs to believe is that the stock market will continue to rise. With more than a century of stock market history supporting that idea, that’s not a big ask. But when you move into the realm of actively managed ETFs, you have to believe in the vision that the fund manager has for the future. In the case of ARK Innovation ETF (NYSEMKT: ARKK), fund manager Cathie Wood has been quite open about her expectations and what she’s hoping to see from the companies whose stocks you’ll find in her portfolio.
This final article on ARK Innovation for the Voyager Portfolio focuses on the investment case that Wood sets out for her flagship ETF. If you agree with it, then this ETF might make sense for you. If not, it’s still valuable to understand the views of an influential fund manager and how they relate to what’s happening in the stock market right now.
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Wood’s thesis for ARK Innovation ETF focuses on five major platforms for innovation. Artificial intelligence is the one that’s getting the most attention right now, along with the related efforts in robotics that uses that AI technology to fuel autonomous decision-making and work. Public blockchains have gotten a lot of attention with the establishment of Bitcoin (CRYPTO: BTC) and other digital assets. Energy storage has become a vital part of the electrification trend in areas like mobility and renewable power. And finally, the multiomics trend is getting the least attention from the general public, but this revolutionary approach toward biological sciences gears itself toward developing precision therapies that could personalize medicine and lead to unprecedented breakthroughs.
Wood believes that as these disruptive technologies integrate with each other, they create a positive flywheel that accelerates advances in all of them. So far, AI has been the most important catalyst toward technological advances. However, the ARK Innovation ETF manager sees robotics making big strides forward, particularly in the area of reusable rocketry for space launches.
Wood sees disruptive technology’s primary benefit being the ability for people to use their time more productively. For instance, robotaxis allow passengers to do work instead of driving, while also making more efficient use of vehicles. The resulting economic activity involved in disruptive innovation boosts the overall economy for the benefit of all.
