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SPECIAL PROMOTIONAL FEATURE

INNOVATION

have the research capabilities and weren’t actively managing their strategies. There was a gap with more sophisticated advisors wanting research. Thankfully, there was ARK and Cathie’s approach, which she was open to discussing.” Wood’s strategy focuses on five areas of innovation that Emerge’s ETFs offer exposure to: DNA sequencing, robotics, energy storage, AI and blockchain technology. “These technologies were born during the tech and telecom bubble but have taken years to gestate,” Wood says. “Now we have to figure

That underlying philosophy is a tremendous point of pride for Langley in Emerge’s offerings, and she says it’s an important factor for advisors who are looking to add disruptive innovation to their portfolios. “You need to look for experts who understand the space as purely as ARK does,” Langley says. “They have an expertise in understanding information that is available to the public but is best understood by experts. ARK has proven they can give away research, help advisors build their business, and everyone can be participating in the future if

“I like it when we go through periods of testing like this because it shows where stocks find support – that’s info for us. Once in a while, we like a wall of worry because the strongest bull markets are built on it” Cathie Wood, ARK Invest out how quickly they will move into the sweet spots of their S curves. We have done deep research on how these technologies evolve, if are they ready, if they are cost-effective and if the cost will continue to be driven down to unleash waves of demand. We think these five platforms are doing just that.” That research has been key not only for the success of the ETFs, but also as a differentiator for ARK. Wood notes that the company gives its research away for free, enabling true access. “We give our research away to educate and to engage with the innovators,” she says. “What we do for them is size the market and educate them where we see barriers to entry, unit economics, and give them the best way to capitalize on the innovations they are involved in. What has come back is so much more as we battle-test our assumptions and build out our models.”

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they can afford one unit of an ETF.” Wood adds that “giving access to the same kind of innovation, priced more reasonably, in the public equity markets has been rewarding. We are helping to change lives. This is a volatile strategy – you need to have a five-year time horizon, but younger investors should have those long horizons. We often say we are the closest thing to a venture capitalist firm in the public markets, and giving investors access to big ideas has hit a response accordingly.” So far, this year has been rocky for the tech industry and many of the innovations Wood looks to provide exposure to. However, she has seen it as an opportunity to bolster positions in ARK’s high-conviction names. “In risk-off periods, when investors diversify by adding benchmarks, they sell our stocks,” she says. “We are happy to buy them, as it creates great opportunities. In the last six months, the rotation towards value

and cyclicals has gained momentum. We told our clients this is good news because the bull market has broadened out. I like it when we go through periods of testing like this because it shows where stocks find support – that’s info for us. Once in a while, we like a wall of worry because the strongest bull markets are built on it.” When it comes to recent opportunities, Wood and Langley saw one in the Emerge ARK Space Exploration ETF (EAXP), which launched in late March in both Canada and the US. “Space exploration is happening because of the convergence of many technologies,” Wood explains. “If you look at the costs associated with launching rockets, satellites and antenna technology, they are coming down. You are also seeing two big markets come into focus. One is broadband – 3 billion people in the world do not have access to broadband. This is a $40 billion opportunity; the satellites shooting up will address that.

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