The Ark Innovation ETF and Ark Next Generation Internet ETF are both actively managed funds. There is quite a bit of overlap between the ETFs' portfolios.
On finance Twitter, FinTwit for short, Cathie Wood's ARK Innovation ETF (ARKK) gets a lot of flack, some of it rightfully so.
Tech powerhouses Apple, Microsoft, and Nvidia form over 35% of the Vanguard Growth ETF. ARK Innovation ETF's 0.75% expense ratio costs investors far more in fees than cheaper options.
ARKK has underperformed significantly, with its top 5 holdings showing weak growth expectations compared to the Nasdaq's top holdings like Nvidia and Microsoft. The fund's heavy reliance on a few underperforming stocks, particularly Tesla, Roku, and Roblox, has been a major drag on returns. ARKK's companies have lower gross and profit margins compared to the more consolidated and profitable Nasdaq top 5.
It is always fun to root for the underdog. Who doesn't like a good Cinderella story?
On this week's episode of ETF Prime, host Nate Geraci was joined by Cinthia Murphy, VettaFi investment strategist. They discussed the future of ARK Invest and the ARK Innovation ETF (ARKK).
Investors often have to choose between high-growth or high-yield stocks. However, there are some individual stocks that offer both attractive dividend yields and high growth. We discuss several of them in this article.
Cathie Wood‘s ARK Innovation ETF ARKK was once the darling of the market, boasting bold bets on disruptive technologies and promising massive returns.
The ETF has returned an average annual gain of 9.7%. But the annual return for investors is -17%.
As expected, the ARK Innovation ETF ARKK has faced significant losses, down 14% over the past week. ARKK is losing its positive correlation to long-term bonds, likely as the odds of a soft landing decline. Most holdings in ARKK are tied to equity financing needs, which may become difficult as more investors look to increase their cash allocations.
This year has been a big year for active ETFs! According to Morningstar, even though actively managed ETFs still only represent 7% of ETF assets, they accounted for 25% of the flows in the first half of this year, growing to a record $889 billion from their start of the year, $714 billion.
One of the well-known benefits of investing in ETFs is diversification. However, with benchmark indexes reaching record levels of concentration, broad-based ETFs may not be as well diversified as investors expect.