Should You Invest In The ARK Web X.0 ETF (ARKW)?

If you're interested in broad exposure to the Technology - Internet segment of the U.S. equity market, look no further than the ARK Web x.0 ETF (ARKW), a passively managed exchange traded fund launched on 09/30/2014.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 7, placing it in top 44%.

Index Details

The fund is sponsored by Ark Investment Management. It has amassed assets over $540.36 M, making it one of the average sized ETFs attempting to match the performance of the Technology - Internet segment of the U.S. equity market.

This ETF is active and does not track a benchmark.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.75%, making it the most expensive product in the space.

It has a 12-month trailing dividend yield of 0.22%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Tesla Inc (NASDAQ:TSLA) accounts for about 5.51% of total assets, followed by Amazon.com Inc (NASDAQ:AMZN) and Twitter Inc (NYSE:TWTR).

The top 10 holdings account for about 45.36% of total assets under management.

Performance and Risk

Year-to-date, the ARK Web x.0 ETF return is roughly 23.46% so far, and is up about 57.05% over the last 12 months (as of 06/07/2018). ARKW has traded between $34.43 and $56.88 in this past 52-week period.

The ETF has a beta of 1.27 and standard deviation of 21.60% for the trailing three-year period, making it a medium risk choice in the space. With about 43 holdings, it has more concentrated exposure than peers.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.