With artificial intelligence (AI) taking up so much headline space, it might be easy to simply label it as a temporary market trend. However, this could not be further from the truth. While the boom in AI is recent, it has its roots in the broader trend of autonomous technology, an industry that has been growing for several years now.
Autonomous technology is a general term used to describe technology that can accomplish tasks without the need for human input. This includes AI systems, as well as physical technologies such as robotics and self-driving cars. Autonomous devices have been utilized in the automobile and manufacturing industries for years and have recently begun to expand into other industries such as health care.
As demand for speed and efficiency grows, automated technologies are quickly becoming not only a vital part of numerous industries, but of our day-to-day lives as well. And with AI now standing as a prominent component of autonomous technology, the need for automation is more prevalent than ever. The autonomous technology market is thriving, and no investment is better suited to take advantage of that than the ARK Autonomous Technology & Robotics ETF (ARKQ).
Established in 2014 by ARK Investment Management LP, ARKQ is an actively managed fund that invests solely in companies that benefit from technological advancements, especially automation.
Companies held by ARKQ are both focused on and expected to benefit from technological improvements, research and products and services related to energy, automation and manufacturing, materials, transportation and, of course, AI. The fund uses its own internal analysis to select companies that capitalize on disruptive innovation to spur advances in their respective markets.
At present, ARKQ has an average market cap of $173.01 billion, and has $1.06 billion in assets under management. The fund’s current expense ratio is 0.75%. The majority of ARKQ’s holdings are U.S. based, making up 87.79% of the total. The fund’s additional holdings are in Japan (3.47%), Canada (3.26%), Taiwan (1.91%), Israel (1.69%), Hong Kong (1.25%) and Belgium (0.63%).
ARKQ’s primary market sectors include electronic technologies (37.47%), technology services (26.70%), consumer durables (12.44%), producer manufacturing (12.17%) and communications (6.54%). Its current top 10 holdings are Tesla, Inc. (TSLA), UiPath, Inc. Class A (PATH), Kratos Defense & Security Solutions, Inc. (KTOS), Trimble Inc. (TRMB), Teradyne, Inc. (TER), Iridium Communications Inc. (IRDM), Archer Aviation Inc Class A (ACHR), AeroVironment, Inc. (AVAV), Deere & Company (DE) and Komatsu Ltd. Sponsored ADR (KMTUY).
Courtesy of www.stockcharts.com
As of Jan. 2, the fund is up 2.53% in the past month, 8.25% in the past three months and 37.60% year to date.
While autonomous tech is making our lives easier than ever, it is important to not automize your investment decisions. Remember to always consider your personal financial situation and goals before making any investment. Investors are always encouraged to do their due diligence before adding any stock or exchange-traded fund (ETF) to their portfolios.
Finally, remember that 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.
