ARK Innovation ETF (ARKK) is the flagship actively managed fund from ARK Invest, an advisory firm led by renowned investor Catherine Wood. This ETF seeks long-term capital growth by investing in companies that exhibit disruptive innovation. The companies within the fund cover areas including automation, artificial intelligence, robotics & energy storage, and fintech innovation.
ARKK has declined significantly in 2022 amid a broad market sell-off that majorly hit high-growth tech stocks, vulnerable to rising interest rates and slowing economic growth.
As the stocks in ARKK’s portfolio continued their downtrend, investors holding ARKK lost significantly. A shift in investor sentiment is evident from the fund’s outflow. According to data compiled by Bloomberg, the fund saw an $803 million outflow in August, the largest monthly outflow since last September.
Here are the factors that could affect ARKK’s performance in the near term:
ARKK has $8.67 billion in assets under management. Its expense ratio of 0.75% is significantly higher than the industry average of 0.50%. Over the past three months, the fund witnessed a net outflow of $188.4 million. It has a beta of 1.62 and a NAV of $42.60 as of September 13, 2022.
The fund has a total of 36 holdings. Its principal holdings include Tesla Inc (TSLA) with 9.66% weighting, followed by Zoom Video Communications, Inc (ZM) with a 7.70% weighting, and Roku, Inc. (ROKU) and Exact Sciences Corporation (EXAS) with 6.94%, 5.05% weightings, respectively.
Brutal Tech Sell-Off
Since the beginning of 2022, tech stocks have gotten crushed in a broader market sell-off, driven by multi-decade high inflation, subsequent rate hikes, and an economic slowdown. The massive tech selloff has caused Wood’s ARK Invest flagship fund, ARKK, which primarily invests in disruptive innovation companies, to…
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