investment-client-summit-capturing-alpha-through-disruptive-innovation

THEMATIC INVESTING in DISRUPTIVE INNOVATION www.ark-invest.com

INTRODUCTION 2 CATHERINE D. WOOD, CEO/CIO 2014 Founded ARK Invest 12 years at AllianceBernstein Chief Investment Officer of Global Thematic Strategies ($5 billion AUM) Co-founded Tupelo Capital Management $800 million under management, the largest women-run hedge fund in the world in 2000 18 years with Jennison Associates Chief Economist, Equity Research Analyst, Portfolio Manager and Director 3 years with Capital Group University of Southern California B.S., summa cum laude, in Finance and EconomicsARK Invest | ark-invest.com

THEMATIC INVESTING POWERED BY 3DISRUPTIVE INNOVATIONWHAT IS DISRUPTIVE INNOVATION?Disruptive innovation is the introduction of a new product or service that permanentlychanges an industry landscape by creating simplicity, convenienceand accessibility while driving down costs.1781 1876 1923 1977Steam Telephone Television Mobile Phone 2003Engine 1880 1903 First Human 1860 Electric Airplane 1971 Genome Internal Lighting Microprocessor 1990 Sequenced Combustion Internet Engine Selection of Historical DISRUPTIVE INNOVATIONARK Invest | ark-invest.com

TECHNOLOGY IS CHANGING 4EVERYTHING AT AN ACCELERATED RATEUNDERSTAND THE TECHNOLOGICAL TRENDS TO STAY AHEAD OF THE CURVE.ARK Invest | ark-invest.com

DIFFERENTIATION 5COMPANIES THAT FALL BETWEEN THE CRACKSCAPITALIZATION ON THE CONVERGENCE OF SECTORSPercentage Weight in Russell 3000 Growth Index**ATHN: 0.04% *ILMN: 0.25% *SSYS: 0% *NFLX: 0.44% *TSLA: 0.20% *AMZN: 1.71%IDENTIFYING ECOSYSTEM ENABLERS*NVDA: 0% *XLNX: 0.02% *MDSO: 0.02% *SPLK: 0.07% *HDP: 0.002% *AMBA: 0.03% *As represented by the iShares Russell 3000 Growth ETF: http://www.ishares.com/us/products/239713/ishares-russell-3000-growth-etf (as of 08.12.2015) The companies referenced are for illustrative purposes only and are not endorsements by ARK of any particular company or security and are not recommendations by ARK to buy, sell or hold any security.ARK Invest | ark-invest.com

FOUR GENERAL PURPOSE TECHNOLOGY PLATFORMS 6D R I V I N G I N N OVAT I O N T O DAY Genomic Robotics and Sequencing Automation Bitcoin The Cloud Energy and Big Data StorageARK Invest | ark-invest.com

FOUR GENERAL PURPOSE TECHNOLOGY PLATFORMS 7D R I V I N G I N N OVAT I O N T O DAY Genomic Robotics and Sequencing Automation Bitcoin The Cloud Energy and Big Data StorageARK Invest | ark-invest.com

8GENOMIC SEQUENCING Projected Cost to Sequence a Whole Human Genome (monthly, log scale)Historic Cost Per Genome Moore's Law Moore's Law Forecast Historic Rate Forecast$100,000,000 4/19/01 1/14/04 10/10/06 7/6/09 4/1/12 12/27/14 9/22/17 6/18/20 3/15/23 $10,000,000 $1,000,000 $100,000 $10,000 $1,000 $100 $10 $1 7/24/98Source: ARK Investment Management LLCProjections are not guarantees.ARK Invest | ark-invest.com

9GENOMIC SEQUENCING Estimated Number of Human Genomes Sequenced Over the Next 5 and 10 Years MoMooreo’rseL'saLwawFoFreocreacsat st HiHstiosrtoicriRcatleRaFotereFcoarsetcast 34,000,000,000 4,000,000,000100,000,000,000 10,000,000,0001,000,000,000 53,000,000121,000,000 100,000,000 10,000,000 200% 1,000,000 CAGR 100,000 40,000 235,00010,0001,000100101 Human Genomes Sequenced Thus Far Human Genome Sequencing Capacity Human Genomes Sequenced by 2019 Human Genomes Sequenced by 2024 2014Source: ARK Investment Management LLCEstimates are projections and not guarantees.ARK Invest | ark-invest.com

GENOMIC SEQUENCING 10ILLUMINA CASE STUDY – AN EXAMPLE OF A DISRUPTIVE COMPANYSource: BloombergThe information shown is historical and not a prediction of future results. The company is referenced for illustrative purposes only. Such reference is not anendorsement by ARK of the company or any security and is not a recommendation by ARK to buy, sell or hold any particular security.ARK Invest | ark-invest.com

FOUR GENERAL PURPOSE TECHNOLOGY PLATFORMS 11D R I V I N G I N N OVAT I O N T O DAY Genomic Robotics and Sequencing Automation Bitcoin The Cloud Energy and Big Data StorageARK Invest | ark-invest.com

12ROBOTICS AND AUTOMATION Accelerating Capital Spending on Robotics will Disrupt Labor $300 $250 $242 $185 2035 $200Billions $150 32% $100 GROWTH RATE $50 2025 $11 $0 2015 By 2035: •  47% of American Jobs will be replaced by automation •  Automation will generate $12 trillion in additional GDPSource: ARK Investment Management LLC, Oxford University StudyProjections are not guarantees.ARK Invest | ark-invest.com

ROBOTICS AND AUTOMATION 13ARK’S ORIGINAL RESEARCH ON THE FUTURE OF AUTOMATIONSource: ARK Investment Management LLCARK Invest | ark-invest.com

ROBOTICS AND AUTOMATION 14 3D PRINTINGSource: ARK Investment Management LLCEstimates are projections and not guarantees.ARK Invest | ark-invest.com

ROBOTICS AND AUTOMATION: 3D PRINTING 15STRATASYS CASE STUDY – AN EXAMPLE OF A DISRUPTIVE COMPANYSource: BloombergThe information shown is historical and not a prediction of future results. The company is referenced for illustrative purposes only. Such reference is not anendorsement by ARK of the company or any security and is not a recommendation by ARK to buy, sell or hold any particular security.ARK Invest | ark-invest.com

FOUR GENERAL PURPOSE TECHNOLOGY PLATFORMS 16D R I V I N G I N N OVAT I O N T O DAY Genomic Robotics and Sequencing Automation Bitcoin The Cloud Energy and Big Data StorageARK Invest | ark-invest.com

17THE CLOUD AND BIG DATADATA ANALYTICS WILL BE REQUIRED TO STAY RELEVANT•  Mining massive unstructured datasets via machine learning will be crucial for insights•  In 2000 98% of connected devices were computers, by 2020 it will be only 9%Putting Useful Data to Use 11% % Analyzed 7.5x % Unanalyzed 6% 2015 2020Source: ARK Investment Management LLCProjections are not guarantees.ARK Invest | ark-invest.com

18THE CLOUD AND BIG DATASHARING ECONOMYIf the sharing economy reaches 5% penetration, US auto sales will fall from 14-15 million to 7-8 million by 2020, evenin a strong economy. Projected Annual New Car Sales in the US No Additional Car Sharing Car Sharing 5% Adoption Car Sharing 2.5% Adoption 18 16 14Units (millions) 12 10 8 6 4 2 0 2015 2016 2017 2018 2019 2014Source: LA Times, Center for Automotive Research (CAR), USDT Federal Highway Admin 2009 National Household Travel Survey, Zipcar 2014 Annual ReportProjections are not guarantees.ARK Invest | ark-invest.com

THE CLOUD AND BIG DATA 19SHARED AUTONOMOUS VEHICLES US car owners spendUS drivers travel three Personal vehicle travel costs $2.1 trillion on drivingtrillion miles per year roughly 70 ₵ /mile per year + $450 billion opportunity for shared autonomous~ 60% of miles driven are Google could price travel vehicles addressable by SAVs at 25 ₵ /mile + Consider: •  If SAVs replace 60% of US vehicles, 740 million parking spaces worth $13 trillion free up •  Human error contributes to 90% of auto accidents •  Vehicles are stranded assets, utilized only 4% of the time on averageSource: ARK Investment Management LLCProjections are not guarantees.ARK Invest | ark-invest.com

FOUR GENERAL PURPOSE TECHNOLOGY PLATFORMS 20D R I V I N G I N N OVAT I O N T O DAY Genomic Robotics and Sequencing Automation Bitcoin The Cloud Energy and Big Data StorageARK Invest | ark-invest.com

21ENERGY STORAGEElectric vehicles are 4x more energy efficient than combustion engine vehicles.Battery pack system costs will drop 40% by 2020. Estimated Cost of Tesla Battery vs. Cost of Total Battery Pack System Just the Battery Total Battery Pack System$450$400$350$300$250$200$150$100 $50 $0 2013 2014 2015 2016 2017 2018 2019 2020Source: ARK Investment Management LLCEstimates are projections and not guarantees.ARK Invest | ark-invest.com

ENERGY STORAGE 22 OIL CASE STUDYSource: BloombergThe information shown is historical and not a prediction of future results.ARK Invest | ark-invest.com

FOUR GENERAL PURPOSE TECHNOLOGY PLATFORMS 23D R I V I N G I N N OVAT I O N T O DAY Genomic Robotics and Sequencing Automation Bitcoin The Cloud Energy and Big Data StorageARK Invest | ark-invest.com

BITCOIN 24 Payment Method Transaction Fees Remittances (Consumer)Percent of Transaction 10% 9% 8% Credit Card (Merchant) PayPal (Merchant) 7% 6% 5% 4% 3% 2% 1% 0% Bitcoin (Sender)Source: ARK Investment Management LLCThe information shown is for illustrative purposes only and is not a recommendation by ARK to buy, sell or hold any security.ARK Invest | ark-invest.com

25BITCOIN Deterministic Expansion of Bitcoin Supply35%30%25%20%15%10%5%0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2012Source: ARK Investment Management LLCThe information shown is for illustrative purposes only and is not a recommendation by ARK to buy, sell or hold any security. The information showndepicts the expansion of the bitcoin monetary base through 2025.ARK Invest | ark-invest.com

26BITCOIN United States Money Supply M0 5000000 4000000 USD Million 3000000 2000000 10000001980 1991 2002 2013 0•  By 2030, the United States Money Supply M0 is projected to trend around 5,537,118 USD MillionSource: The United States Money Supply M0:http://www.tradingeconomics.com/united-states/money-supply-m0/forecast (as of 8.21.2015)The information shown is historical and not a prediction of future results. Projections are not guarantees.ARK Invest | ark-invest.com

27BITCOIN$180,000 Value of One bitcoin $170,000$160,000 in Global Financial Gold Market (GFGM) 100% of GFGM$140,000$120,000 $280 $1,700 $17,000$100,000 Today 1% of GFGM 10% of GFGM $80,000 $60,000 $40,000 $20,000 $-Source: ARK Investment Management LLCThe information shown is for illustrative purposes only and is not a recommendation by ARK to buy, sell or hold any security.ARK Invest | ark-invest.com

DIFFERENTIATION 28COMPANIES THAT FALL BETWEEN THE CRACKSCAPITALIZATION ON THE CONVERGENCE OF SECTORSPercentage Weight in Russell 3000 Growth Index**ATHN: 0.04% *ILMN: 0.25% *SSYS: 0% *NFLX: 0.44% *TSLA: 0.20% *AMZN: 1.71%IDENTIFYING ECOSYSTEM ENABLERS*NVDA: 0% *XLNX: 0.02% *MDSO: 0.02% *SPLK: 0.07% *HDP: 0.002% *AMBA: 0.03% *As represented by the iShares Russell 3000 Growth ETF: http://www.ishares.com/us/products/239713/ishares-russell-3000-growth-etf (as of 08.12.2015) The companies referenced are for illustrative purposes only and are not endorsements by ARK of any particular company or security and are not recommendations by ARK to buy, sell or hold any security.ARK Invest | ark-invest.com

DISRUPTIVE INNOVATION IS A 29THEMATIC INVESTMENT OPPORTUNITY WHAT IS THEMATIC INVESTING? A thematic approach seeks investable ideas to capture opportunities from long-term trends or secular shifts that cut across economic sectors and geographic boundaries. Recognize that the world is changing rapidly. Incorporate a deep understanding of the underlying drivers of long term value creation and risk. Look forward to provide a dynamic and flexible way to validate conviction-based decisions.ARK Invest | ark-invest.com

30HOW INVESTORS BENEFIT FROM THEMATIC①  PORTFOLIO DIVERSIFICATION TOOL Thematic investing can offer a low correlation of relative returns to traditional growth strategies and negative correlation to value strategies.②  UNIQUE SOURCE OF ALPHA Top down approach looks at secular trends and ecosystems to find attractive growth opportunities across sectors.③  HEDGE FOR INDEX-BASED STRATEGIES Constant focus on secular changes and disruptive innovation can offer a portfolio hedge in a rapidly changing world and complement traditional strategies.ARK Invest | ark-invest.com

31 DISRUPTIVE INNOVATION IS KEY TO GROWTH OFFERING INVESTORS POWERFUL PORTFOLIO DIVERSIFICATION AND PROSPECTS FOR LONG-TERM GROWTH IN A SLOW GROWTH WORLD INVESTING IN THE COMPANIES THAT ARE CHANGING THE WAY THE WORLD WORKS AND MAKING IT A BETTER PLACEARK Invest | ark-invest.com

32©2015, ARK Investment Management LLC. No part of this material may be reproduced in any form, or referred to in any other publication, without the express writtenpermission of ARK Inestment Management LLC.The content of this presentation is for informational purposes only and is subject to change without notice. This presentation does not constitute, either explicitly or implicitly, any provision of services orproducts by ARK and investors should determine for themselves whether a particular investment management service is suitable for their investment needs. All statements made regarding companies orsecurities are strictly beliefs and points of view held by ARK and are not endorsements by ARK of any company or security or recommendations by ARK to buy, sell or hold any security. Certain of thestatements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on ARK's current views and assumptions and involve knownand unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The matters discussed in thispresentation may also involve risks and uncertainties described from time to time in ARK's filings with the U.S. Securities and Exchange Commission. ARK assumes no obligation to update any forward-looking information contained in this presentation. Certain information was obtained from sources that ARK believes to be reliable; however, ARK does not guarantee the accuracy or completeness ofany information obtained from any third party. ARK and its clients as well as its related persons may (but do not necessarily) have financial interests in securities or issuers that are discussed.Index Descriptions: The Russell 3000® Growth Index measures the performance of those Russell 3000® Index companies (the largest 3,000 U.S. companies representing approximately 98% of theinvestable U.S. equity market) with lower composite value scores.