Exchange Traded Funds (ETFs)

Invest in Disruptive Innovation with This Technology Fund

The ARK Innovation ETF (NYSEARCA: ARKK) is an actively managed exchange-traded fund (ETF) that seeks long-term capital growth from companies globally involved with, or that benefit from, disruptive innovation.

Its investments in foreign equity securities will be in both developed and emerging markets. The non-diversified fund may invest in foreign securities listed on foreign exchanges as well as American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs).

One reason I like ARKK is that it is full of cutting-edge firms, selected to represent the adviser’s highest-conviction investment ideas in this space. ARKK, launched on October 31, 2014, defines “disruptive innovation” as a technologically enabled new product or service that has the potential to change the way the world works.

The fund’s portfolio focuses on companies involved in genomics, automation, transportation, energy, artificial intelligence and materials, shared technology, infrastructure and services and technologies that make financial services more efficient. ARKK’s proprietary macroeconomic and fundamental research, aimed at assessing company potential, drives security selection and weighting.

Source: StockCharts.com

ARKK, with net assets totaling $7.7 billion, currently trades around $44 a share with an expense ratio of 0.75%, meaning it is relatively expensive to hold in relation to other ETFs. The fund typically has anywhere between 35 and 55 holdings, and is part of the investment empire of its famed founder and technology aficionado, Cathie Wood. ARKK’s year-to-date return is an impressive 29.61%.

However, as with any opportunity, I urge all potential investors to exercise their own due diligence in deciding whether or not this fund fits their own individual portfolio goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You may just 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.