Cathie Wood on the first year of The Ark and Avanza Partnership

ARK is delighted to celebrate the first year of our partnership with Avanza, especially now that artificial intelligence is accelerating the disruptive innovation that is likely to impact most sectors, industries, and investment strategies. Of course, interest rates, geopolitics, and environmental transformation are important variables that we will continue to monitor and assess as we navigate toward the super exponential growth opportunities associated with disruptive innovation.

Review Of The Investment Landscape 

In 2023, investment strategies focused on disruptive innovation performed quite well, buoyed in part by the growing consensus that the U.S. Federal Reserve (Fed) will lower interest rates in 2024. In response to an unprecedented 24-fold hike in interest rates over 17 months, corporations seem to be losing pricing power and are beginning to downsize, which could cause a harder-than-expected landing. During the past two years, the US economy seems to have been in a rolling recession that has depressed housing, autos, and commercial real estate, while inventories have continued to build in the aftermath of the double- and triple-ordering that took place in response to supply chain bottlenecks from 2020 through 2022. As inflation gives way to broad based deflation during the next year, companies associated with ARK’s Five Innovation Platforms could play an outsized role in salvaging corporate profit margins. Innovation solves problems!

While the bear market in 2022 punished companies investing aggressively to capitalize on technology breakthroughs, innovation continued apace thanks to advances in artificial intelligence (AI), blockchain technology, multiomic technologies, robotics, and energy storage. Early last year, OpenAI’s GPT-4 unleashed the power of AI by achieving top-percentile scores across a range of standardized tests from law to calculus. On the Uniform Bar Exam, it scored in the 90th percentile, a leap from GPT-3.5’s 10th percentile in 2022.ⁱ

Annons

Bitcoin’s price appreciated 40%+ during the US regional bank crisis of 2023, validating its role as an insurance policy against central points of failure in the US and European banking systems. Indeed, since the peak of the FTX-related crisis in 2022, the Bitcoin network has not skipped a beat, facilitating $3.6 trillion in ~163 million transactions, issuing ~373,000 new BTC, and attracting ~187 million new addresses. Moreover, bitcoin continued to rally throughout the year as the SEC prepared to approve 11 spot Bitcoin ETFs in early 2024.ⁱⁱ

On December 8, the Food and Drug Administration (FDA) approved the first gene-editing therapy in the US.ⁱⁱⁱ Developed and manufactured by CRISPR Therapeutics and Vertex Pharmaceuticals, Casgevy will treat patients with severe Sickle Cell Disease (SCD) and beta thalassemia. In our view, companies sacrificing short-term profitability to invest aggressively in innovative technologies should enjoy exponential and highly profitable long-term growth opportunities.

Moreover, innovation should be a source of good deflation, as learning curves cut costs and increase productivity. Yet, many legacy companies that have catered to risk-averse short-term oriented shareholders have leveraged their balance sheets to buy back stock, bolster earnings, and increase dividends. In so doing, many have curtailed research and development (R&D) and capital spending and, now, could be ill-prepared for the potential disintermediation associated with disruptive innovation. For these and other reasons, we believe disruptive innovation taking place outside the remit of broad-based equity benchmarks could transform the playing field in 2024 and beyond.

Looking Ahead: Technological Convergence

According to ARK’s research, convergence between and among disruptive technologies will define this decade. Five major technology platforms—Artificial Intelligence, Public Blockchains, Multiomic Sequencing, Energy Storage, and Robotics—are coalescing and could transform global economic activity in ways more impactful than the first and second industrial revolutions. Globally, technological convergence could accelerate real economic growth globally from 3% at an annual rate during the past 125 years to more than 7% during the next 7 years. Breakthroughs in AI, for example, should enable robots to reinvigorate manufacturing, robotaxis to transform transportation, and software to accelerate the growth in knowledge worker productivity. These and other breakthroughs are detailed in ARK Invest’s Big Ideas 2024: Disrupting The Norm, Defining The Future.

// Cathie Wood, CEO and managing director at ARK Invest

Tänk på att det kan svänga! Att spara i fonder, aktier och andra värdepapper har över tid varit ett bra sätt att få pengar att växa, men hur det går i framtiden vet ju ingen. Det kan gå både upp och ner så det är alltså inte säkert att du får tillbaka pengarna du satte in från början. Åsikter och slutsatser som framkommer i bloggen är skribentens egna och skall inte ses som investeringsråd och/eller åsikter från Avanza. Fonden förvaltas av Avanza Fonder i samarbete med ARK Invest. För information om hur fonden förvaltas, faktablad & informationsbroschyr se avanza.se/avanzabyark