How does ARK view volatility?

Understandably, during the past years of financial volatility, investors may have gravitated more towards risk-averse strategies, including cash, bonds, and high dividend yielding stocks. It seems investors might have associated change more with crisis and risk than with innovation and opportunity. ARK believes that the path to creating a well-balanced portfolio is by combining both higher and lower risk investments. In fast-moving themes, like those of our ETFs, volatility can be the foundation of opportunity and potentially higher returns. For that reason, ARK focuses on promising areas of disruptive innovation centered around robotics/automation, energy storage, genomic sequencing, and next generation internet technologies, including deep learning, mobile connected devices, and blockchain technology, all of which are combining to disrupt most industries around the world.

While innovation is likely be more volatile in the short-term, as companies and investors are adopting and learning about new technologies, ARK believes if evaluated over a longer time horizon (3-5 years) volatility associated with innovative companies should become more manageable and less concerning for investors.