Fund Idea We like Disruptive Innovation too, but which fund | FSMOne SG - Research Highlights

Fund Idea

We like Disruptive Innovation too, but which fund should you choose?

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• Despite a stuttering 2021 thus far, we believe that Disruptive Innovation remains a long-term growth theme too important for investors to ignore.

• With the theme also inherently risky by nature, we feel that the Ark Funds have undertaken too much unnecessary risk in the form of highly concentrated positions, perhaps reflecting overconfidence in their stock picking abilities after a successful 2020.

• Identifying tomorrow’s winners is ultimately a numbers game, often boiling down to a probabilistic well-educated bet – and we believe diversification is key.

• Therefore, we prefer the Blackrock Next Generation Technology Fund – which through its diversification, has also provided comparable returns at lower risk compared to the Ark Funds.

• In addition, its more balanced geographical distribution provides exposure to companies in typically hard to access markets, such as Kakao Corp or Samsung SDI (listed in Korea).

• Investors would also do well to not neglect today’s Tech giants, and complementing the O'Shares Global Internet Giants ETF (BATS:OGIG) and/or the Blackrock World Technology Fund with the Blackrock Next Generation Technology Fund should help to “future-proof” investors’ portfolios and capture future growth opportunities.

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: Blackrock Next Generation Technology Fund