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.