This Fund Focuses on New, Emerging Technologies

servers in the cloud

The Ark Web x.0 ETF (ARKW), an actively managed exchange-traded fund (ETF), seeks long-term capital growth by investing at least 80% of its assets in companies that its managers expect to benefit from a shift away from hardware and software toward cloud and mobile.

ARKW has a very broad mandate that is not limited by geography or by industry, but rather the fund’s managers look to identify companies they see as the next generation of internet evolution. The fund’s managers target companies involved in “internet of things,” “cloud computing,” “digital currencies” and “wearable technology.”

Companies within ARKW are focused on the transition of technology infrastructure to the cloud, enabling mobile, new and local services. Stocks in this fund offer increased use of shared technology, infrastructure and services, internet-based products and services, new payment methods, big data and social distribution and media.

The ETF currently has $1.15 billion in net assets, $5.43 million daily volume and is at 24.61% in year-to-date return. The expense ratio is 0.75%, which means this fund is slightly more expensive to hold relative to other exchange-traded funds.

Chart Courtesy of stockcharts.com.

ARKW’s top sectors include technology, consumer cyclical, financial services, real estate and health care. Its top holdings include NVIDIA Corp. (NASDAQ:NVDA), 7.68%; Tesla (NASDAQ:TSLA), 7.08%; Twitter (NYSE:TWTR), 5.58%; Tencent holdings (OTCMKTS:TCEHY), 4.65%; Netflix (NASDAQ:NFLX), 4.19%; LendingTree, Inc. (NASDAQ:TREE), 3.74%; and Zillow Group, Inc. (NASDAQ:ZG), 3.32%.

While ARKW’s focus may be appealing for investors with conviction in these new technologies, portfolio implementation is a more difficult task; most of the companies developing these advancements are huge corporations for which nascent technologies are only a small fraction of total revenues. As such, it is difficult to get pure-play access to ARKW’s targeted technologies, so be sure to confirm that the fund’s holdings — not just its thesis — align with your view of the space.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.