The US financial services provider ARK Invest offers the appropriate investment solutions for a new technology age. The ARK Next Generation Internet ETF was brought into being in September 2014 with a view to enabling a focused investment in the internet with all its opportunities. It invests in companies that profit from a new technology infrastructure. Key roles are played by sectors such as cloud computing, cyber security, e-commerce, big data, artificial intelligence, blockchain and social platforms. The great potential of new technologies can be demonstrated by taking the example of deep learning. According to figures from ARK Research, this segment has already achieved a market capitalisation of USDtn 1. The experts anticipate another USDtn 30 being added by 2037. Taking a sector view, cloud computer and cyber security account for the highest share, at 21.3%, although the absolute heavyweight in the ETF is the mobility revolutionary Tesla. That the passive investment vehicle hits the sweet spot is evident when looking at performance: since its issue, the ETF has achieved an average annual return of 32.3% – the S&P 500 managed "just" 10.3% over the same period.
With a return of 26.7% p.a., the ARK Innovation ETF, which came on the market at almost the same time as the ARK Next Generation Internet ETF, likewise recorded a significant outperformance of the market as a whole. This product is concentrated on "disruptive innovation", i.e. technologically new products or services that could change how the world operates. These include companies engaged in the DNA technology, industrial or fintech innovation sectors, for instance. The three largest segments in the fund, each currently enjoying a weighting of around one tenth, are e-commerce, gene therapy and molecular diagnostics. The fund is broadly diversified and generally contains between 35 and 50 companies. Among the top 10 at the moment are the financial services and mobile payment provider Square, 3D specialist Proto Labs and gene technology company Illumina.
Health has been one of the most important sectors on the stock market, not least since coronavirus began to grab the world's attention. Launched in 2014, the ARK Genomic Revolution ETF puts the focus on those companies which have dedicated themselves to improving quality of life by including technological and scientific developments allied to progress in genomics in their business. They include technologies such as bioinformatics, molecular diagnostics, stem cells and agrobiology – all sectors with enormous growth potential. ARK Research anticipates, for instance, that DNA sequencing alone will expand by an average 43% p.a. between 2019 and 2024, rising from USDbn 3.5 to USDbn 21. The current heavyweight in the fund is Invitae, provider of a genetic engineering platform. Its share price has already appreciated by more than 160% this year. That the "Health Care Meets Technology" approach pays off on the stock market over the longer term is evident from a look in the mirror. The ARK Genomic Revolution ETF has jumped 19.2% p.a. over the last five years, almost double the rise of the S&P 500.
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