Thematic Investing For An Exponential World

Thematic investors seek to capitalize on rapidly changing trends— anticipating, identifying, and quantifying multi-year value-chain transformations— normally caused by technology enabled innovation. Conventional wisdom typically underestimates the implications of these transformations, giving thematic investors opportunities to identify stocks poised to benefit from trends not yet priced properly in the market.

In this paper, ARK Invest examines how thematic strategies have outperformed broad market indices on an absolute and risk-adjusted basis and concludes that thematic strategies, which deliver moderate to negative correlation of relative returns, can offer an attractive complement to traditional investment strategies.