ARK Invest is a global investment manager based in St. Petersburg, Florida. Founded in 2014 by Cathie Wood, ARK is focused solely on investing in disruptive innovation across multiple sectors and industries.

ARK takes a fundamentally different approach to investing by focusing on public companies leading the way in technological breakthroughs.

ARK Invest has several active and index ETFs,

Let us dissect two interesting funds from this pool, which I recently traded.

ARKK - Innovation

Sector Exposure

ARKK's portfolio is heavily tilted toward innovative sectors, with the highest exposure being Intelligent Devices (17.6%), Next Gen Cloud (13.3%), and Precision Therapies (13.0%). This underscores the fund's focus on emerging technologies like artificial intelligence, cloud computing, and gene therapies, which are expected to drive significant growth and disruption in the future.

Top Holdings

The fund's top holdings are dominated by prominent tech giants like Coinbase Global Inc. (10.0%), Tesla Inc. (8.7%), Roku Inc. (7.6%), and Block Inc. (7.0%), reflecting its emphasis on companies at the forefront of technological disruption.

Other notable holdings include UiPath Inc. (5.8%), a leader in robotic process automation, and Crispr Therapeutics AG (5.1%), a pioneering gene-editing company.

Performance

NAV and market price returns are very close across all periods, indicating the ETF trades efficiently with minimal premiums or discounts to its NAV. This alignment between NAV and market price returns is generally desirable for ETF investors.

Despite its forward-looking approach, ARKK's performance has been mixed. Over the shorter time frames of 3 months, YTD, and 1 year, the fund has underperformed the broader market indices, with returns of -4.45%, -4.45%, and 24.20%, respectively, as of March 31, 2024. However, over the longer horizons of 5 years and since inception (October 31, 2014), ARKK has outperformed both the S&P 500 Index and the MSCI World Index, delivering annualized returns of 1.97% and 11.35%, respectively

ARKW - Next Generation Internet

Sector Exposure

The fund's portfolio composition reveals a diverse exposure to elements such as intelligent devices (23.6%), next-gen cloud (18.4%), neural networks (13.8%), digital wallets (12.9%), cryptocurrencies (7.6%), smart contracts (5.7%), autonomous mobility (4.0%), advanced battery technologies (2.4%), and multionic technologies (1.0%).

Top Holdings

The fund's top 10 holdings as of March 31, 2024, include prominent companies like Coinbase Global Inc. (10.3%), Bitcoin ETF (10.0%), Block Inc. (8.4%), Roku Inc. (7.4%), and Tesla Inc. (6.1%). These holdings reflect the fund's focus on disruptive technologies and innovative companies shaping the future of various industries.

Performance

The ARKW fund has delivered impressive returns over the long term, outperforming the S&P 500 Index (SPX) and the MSCI World Index (MXWO) since its inception on September 30, 2014.

This is part of the ETF deep dive series; we have a deep dive into FXAIX.

If you are interested in following my writings, you can subscribe to this free newsletter

Subscribe Newsletter

As of March 31, 2024, the fund's 1-year return stood at 55.46%, significantly higher than the SPX's 29.88% and the MXWO's 25.11% over the same period. However, the fund's 3-year and 5-year annualized returns lagged behind the broader market indices, potentially due to the volatile nature of the disruptive technologies it invests in.

Good Reads

Financial Report By ARK Invest - https://etfs.ark-funds.com/hubfs/2_Download_Files_For_ARK_Funds/Reports/ARK_ETF_Trust_Quarterly_Report.pdf

0 comments

Zero DTE : A High-Risk, High-Reward Opportunity

Trader's Second Brain - A Profitable Trade Setup

Iron Condor = Bear Call + Bull Put

Iron Condor

Options Greeks For Beginners

See all posts from Options Trader