Thematic investing seeks to capitalize on long-term trends that cut across economic sectors and geographic boundaries. It recognizes that the world is changing rapidly and incorporates a deep understanding of the underlying drivers of long-term value creation and risk.
Active ETFs, Thematic Investing, Disruptive Innovation, ARK ETFs, actively managed etfs, innovation etfs, active technology etfs, ARK ETF TRUST

What are the Benefits of Thematic Investing?

Low Correlation
Thematic investing can offer a low correlation of relative returns to traditional growth strategies and negative correlation of relative returns to traditional value strategies, offering diversification for investors.

Alpha at Scale
While benchmarks reflect past successes, thematic investing seeks to capture future growth allowing investors to earn a market premium.

Hedge Against Rapid Change
Constant focus on secular changes and disruptive innovation can offer a portfolio hedge in a rapidly changing world and complement traditional index-based strategies.


Innovations often have long flat adoption curves as inertia, network effects, and lack of understanding delay their embrace. During this phase, short-term price movements often reflect volatility more than a stock’s underlying value. ARK seeks to identify the true market potential of innovative companies.
Performance declines during the gap between the early adopters and mass market acceptance. The market tends to overestimate impacts of short-term events and to underestimate long-term market performance. ARK works to recognize firms that will “cross the chasm” to large rapid growth.
Many truly innovative products and services are platforms in “winner takes most” markets. ARK looks for platforms of innovation that cut across sectors for maximum potential upside.
As companies realize the commercial successes of their innovations, they must continue to evolve and differentiate. ARK monitors if a company is reinvesting in future opportunities and identifies possible disrupters.

Evaluate a Thematic Trend

Not every trend represents a thematic investment opportunity. ARK judges secular shifts based on three factors. First, a thematic trend must provide alpha, an opportunity to earn a premium over the market. Second, the trend needs to offer a duration of at least 3-5 years. And third, the trend must be investable, unlike early stage startup innovations or disruptive change facilitated through private or institutional companies.

“Investors have deployed thematic strategies for years; they appreciate the way these allow them to manage risk and ensure that their capital is deployed against the opportunities that best reflect their investment convictions.”

– McKinsey on Investing, Number 1, Winter 2014/15

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