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ETFs ARK Invest have been the center of media attention and drama so far in 2021. ARK Invest, founded by Cathie Wood in 2014, has been under the microscope after experiencing a bumper year after the pandemic. Today, I am focusing specifically on an ARK Invest ETF, the ARK Innovation ETF (NYSEMKT: ARKK). Over the past year, ARKK has returned investors a whopping 48.75% against Invesco QQQ ETF‘s (NASDAQ: QQQ) spectacular 36.63%. Even after a rocky start to 2021, ARKK outperformed QQQ by over 12%. The question investors are asking is whether this has been fueled solely by the pandemic. If you zoom out and look at the three-year returns, ARKK is up over 177% versus 108% for QQQ. That’s 69% outperformance in three years.
ARKK is an actively managed ETF with an expense ratio of 0.75%. ARK Invest makes daily purchases and sales and shares this information publicly. While the transparency is great, I think a lot of investors are misusing this data. I see people posting on social media and websites worried about what ARK Invest bought or sold the day before. ARKK’s objective is to invest in “breakthrough innovation” over the long term. Cathie Wood was very vocal in explaining that the fund invests with the goal of having multi-year holdings, capturing gains from secular growth trends and disruptive technology.
ARKK invests in the following themes:
- Genomic revolution
- Industrial innovation
- Next Generation Internet
- Fintech innovation
In today’s video, I break down ARKK. I provide a list of its current holdings, opinions on why the ETF has underperformed since the start of the year, my thoughts on its long-term growth prospects, and technical analysis on where the ETF could go. take the price.
* The share prices used in the video below were on the trading day of August 5, 2021. The video was posted on August 5, 2021.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
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