Valerio
Baselli:
Hello,
and
welcome
to
Morningstar.
This
week
we
are
all
about
thematic
investing
and
I’m
very
glad
to
be
joined
today
by
one
of
the
most
famous
thematic
investors,
the
founder
and
CEO
of
Ark
Invest,
Cathie
Wood.
So
Cathie,
first
of
all,
thank
you
for
joining
me.
Let’s
start
with
a
general
question.
Thematic
investing
was
one
of
the
biggest
winners
in
the
post-pandemic
recovery
period,
but
it
struggled
in
the
following
market
downturn.
We
even
saw
record
outflows
from
the
thematic
strategy
last
year,
for
example.
Now,
of
course,
AI
is
back
on
the
trend,
but
overall,
what
do
you
expect
from
thematic
investing
in
2024?
Cathie
Wood:
Well,
Valerio,
if
we
are
correct
that
interest
rates
have
peaked
globally,
they’re
already
starting
to
come
down
in
the
rest
of
the
world.
U.S.
will
lag
just
as
it
did
on
the
way
up.
We
think
that’s
going
to
be
a
very
good
environment
for
thematic
investing.
Last
year,
it
was
a
very
good
year
on
balance
for
thematic
investing,
but
we’re
seeing
some
see-saws
as
fears
about
inflation
and
interest
rates
continue.
We
think
they
will
resolve
towards
lower
interest
rates
and
much
lower
than
expected
inflation.
Great
for
thematic.
Baselli:
Of
course,
artificial
intelligence
is
the
big
story.
Speaking
of
AI,
you’ve
been
investing
in
it
for
years.
Now
that
it
has
become
a
mainstream,
let’s
say,
can
we
still
consider
it
a
disruptive
innovation?
Wood:
Yes,
actually,
it
has
just
begun
in
terms
of
its
impact
on
enterprises
and
consumers.
Right
now,
we
feel
we’re
in
the
equivalent
of
the
early
90s
when
it
came
to
the
internet.
We
had
just
begun
and
we
had
miles
to
go.
In
fact,
we’re
still
learning
how
powerful
the
internet
is.
That
is
where
we
are
with
artificial
intelligence
today.
I
also
think
what
is
not
appreciated
is
how
big
a
catalyst
AI
is
going
to
be
to
all
kinds
of
innovation
around
robotics,
energy
storage,
blockchain
technology,
multiomic
sequencing.
It’s
a
huge
catalyst
and
it’s
barely
begun.
Baselli:
In
your
latest
research
paper,
Big
Ideas
for
2024,
you
listed
your
strongest
convictions.
Among
them,
you
mentioned
robotics,
AI,
Bitcoin,
and
also
electric
vehicles.
You
anticipate
that
EV
sales
will
grow
from
roughly
10
million
units
in
2023
globally
to
74
million
in
2030,
which
is
a
lot,
frankly,
and
which
today
I
think
is
a
very
contrarian
view
given
the
increasingly
unpopularity
of
electric
vehicles
worldwide.
Why
are
you
so
positive
about
that?
Wood:
Well,
we
believe
that
one
of
the
issues,
range
and
range
anxiety,
is
going
to
change
as
range
increases.
But
more
important,
we
see
electric
vehicle
prices
dropping
into
the
$20,000
to
$25,000
range
within
the
next
5
to
10
years.
And
if
you
look
at
price
points
historically,
you
adjust
for
inflation,
you
look
at
price
points
at
which
auto
sales
really
take
off
model
by
model.
It
is
around
that
$25,000
to
$30,000
range.
And
so
we
believe
that
electric
vehicles
will
scale
to
roughly
70%
of
the
market
by
that
time,
and
price
will
be
the
biggest
reason.
Baselli:
Right.
In
a
few
days,
there
will
be
the
long-awaited
Bitcoin
halving.
You
have
been
one
of
the
early
adopters
of
Bitcoin.
What
do
you
expect
from
it?
Wood:
Well,
I
think
there
has
been
some
anticipation
about
the
impact
of
halving.
Typically,
after
halving,
and
this
time
we’re
going
from
1.9%
increase
in
supply
per
year
to
0.9%
increase
in
supply
per
year,
and
that’s
below
the
long-term
average
of
gold
supply
growth
if
you
look
at
very
long-term.
So
it’s
an
important
milestone
and
really
highlights
the
rules-based
monetary
system
that
Bitcoin
represents.
While
there
may
have
been
some
anticipatory
moves,
we
think
that,
just
like
in
the
other
halvings,
it
will
generate
more
significant
publicity
this
year
because
more
people
understand
it
now
that
institutions
are
getting
involved,
and
therefore
we
think
the
result
will
be
much
like
it’s
been
in
the
past,
which
is
solid
appreciation
going
forward,
not
without
volatility,
but
solid
appreciation.
Baselli:
Absolutely.
Now,
more
broadly,
searching
for
disruptive
innovation
is
the
core
of
your
investment
philosophy.
Your
flagship
fund,
ARK
Innovation,
provides
exposure
to
some
niche
sectors
as
space
exploration
or
genomics,
and
I
guess
you’re
very
bullish
on
that,
but
what
about
the
risks?
Can
you
articulate
downside
scenarios
for
some
companies
or
themes
you
hold
in
your
portfolio,
and
how
do
you
manage
a
stronger
correction?
Wood:
Well,
the
biggest
risk
we
faced,
we
think
has
passed,
and
that
was
the
impact
of
monetary
shock,
interest
rates
going
up
24-fold
within
a
little
more
than
a
year’s
time.
We
think
that
innovation
and
thematic-based
strategies
paid
their
dues
while
that
was
taking
place.
It
was
a
very
severe
correction.
We
think
we’re
on
the
other
side
of
that.
If
we’re
wrong,
what
we
do
during
a
downturn
is
we
concentrate
our
holdings
towards
our
highest
conviction
names,
as
we
did
during
’21
and
’22.
After
last
year’s
run,
we
began
to
diversify
more.
Our
portfolios
are
a
diversified
exposure
to
innovation
compared
to
what
you
would
find
in
traditional
benchmarks,
and
therefore
the
volatility
is
higher.
But
if
we’re
right
and
we’re
moving
into
these
themes,
onto
these
platforms
in
their
early
days,
based
on
the
convergence
between
and
among
the
technologies
that
we’re
analyzing,
the
growth
rate
should
be
longer
term,
what
we
call
super
exponential,
rapid
growth
accelerating
as
artificial
intelligence
really
catalyzes
or
accelerates
the
pace
of
innovation.
Baselli:
Very
interesting.
At
the
same
time,
we
know
that
investing
in
disruptive
innovation
could
be
beneficial
in
terms
of
the
diversification
of
the
portfolio.
Of
course,
there
are
several
possible
strategies
to
do
that.
How
do
you
suggest
investors
choose
between
them,
and
how
do
you
envision
their
use
within
investors’
portfolios?
Wood:
I
think
very
importantly,
research
on
how
these
technologies
are
going
to
evolve
is
critical.
You’ll
see
many
strategies
will
put
anything
that
has
the
word
artificial
intelligence
into
a
portfolio,
anything
in
the
prospectus,
let’s
say.
That’s
one
way
of
doing
it.
But
we
are
much
more
focused
on
who’s
going
to
take
the
lion’s
share
of
this
market.
And
it’s
a
winner
take
most
market
in
many
cases.
The
most
interesting
one
to
us,
and
probably
the
one
that
will
scale
enormously
during
the
next
5
to
10
years,
is
robo-taxis
or
autonomous
taxi
platforms.
That’s
the
convergence
among
robotics,
autonomous
vehicles,
are
robots,
energy
storage,
they
will
be
electric
because
costs
are
coming
down
with
this
new
technology
and
artificial
intelligence.
They’ll
be
powered
by
AI.
We
believe
that
that
entire
opportunity
is
going
to
generate
revenues
of
$8
trillion
to
$10
trillion
in
2030,
half
of
which
will
go
to
the
platforms
like
Tesla.
Tesla
is
the
biggest
artificial
intelligence
project
in
the
world,
we
believe,
as
it
moves
towards
this
goal
of
autonomous
taxi
networks.
Baselli:
Well,
that’s
very
interesting.
Finally,
last
year,
Ark
Invest
acquired
Rize
ETFs
and
officially
entered
into
the
European
market.
What
are
your
plans
for
Europe
at
this
stage?
And
what
are
your
expectations
on
active
ETFs
adoption
in
Europe?
As
you
know,
active
ETFs
are
a
sort
of
a
new
thing
for
European
investors.
Wood:
Yes.
Well,
we
started
here
in
2014,
and
it
was
the
same
thing.
Active
equity
ETFs
barely
had
begun.
I
think
Europe
is
a
little
more
advanced
than
the
U.S.
was
at
that
time,
and
it
has
the
U.S.
example
to
see
how
successful
this
wrapper
has
been
in
terms
of
these
thematic
portfolios.
So
what’s
interesting
about
Europe,
and
it’s
country
by
country,
of
course,
but
certain
countries
in
Europe
are
extremely
interested
in
thematic.
I
would
say
all
are
interested,
but
I
would
say
your
own
country,
Italy,
from
my
experience,
is
intensively
interested
in
thematic
and
where
the
world
is
likely
to
go.
That’s
a
very
good
thing
for
our
strategies.
And
I
know
because
of
regulatory
constraints,
we
can’t
say
too
much
right
now,
but
stay
tuned
in
the
very
near
future.
I
think
we’ll
be
able
to
showcase
the
three
portfolios
that
we
are
evolving
and
actually
launching
in
the
not
too
distant
future.
Baselli:
Well,
Cathie,
thank
you
so
much
for
your
time,
and
I
can
confirm
about
Italy,
by
the
way.
For
Morningstar,
I’m
Valerio
Baselli.
Thanks
for
watching.
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