Artificial Intelligence (AI)

Automize Your Profits With This Innovative ETF

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.

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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.

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 Successful Investing, 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.