The ARK Innovation ETF (ARKK) is the flagship fund from ARK Invest, an advisory firm led by renowned investor Cathie Wood. This actively managed ETF seeks long-term capital gain by investing in companies that exhibit disruptive innovation. The companies within the fund cover areas including automation, artificial intelligence (AI), robotics & energy storage, and fintech.
The ETF invests at least 65% of its assets in companies relevant to disruptive innovation’s investment theme. Here, disruptive innovation refers to a technologically enabled new product or service that has the potential to bring changes to the way the world works.
After its outsized returns during the COVID-19 pandemic, ARKK has given up all its gains and declined 60% year-to-date and 68% over the past year to close the last trading session at $37.87.
Moreover, the Fed’s interest rate increases have given rise to recession risks by next year. This is expected to hurt high-multiple growth stocks, which ARKK holds. Strategas Securities’ ETF strategist Todd Sohn said, “ARKK has really been the poster child for pain from this environment – global interest rates surging and a Fed set on continuing to tighten until inflation is put to bed.”
Here’s what could influence ARKK’s performance in the upcoming months:
Fund Stats
ARKK has $7.49 billion in assets under management. Its expense ratio of 0.75% is significantly higher than the industry average of 0.51%. Over the past three months, the fund witnessed a net outflow of $516.33 million. It has a beta of 1.56 and a NAV of $37.89 as of October 28, 2022.
Top Holdings
The fund has a total of 34 holdings. Its principal holdings include Zoom Video Communications, Inc. (ZM), with a 9.46% weighting, followed by…
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