Should You Invest In The ARK Innovation ETF (ARKK)?

Launched on 10/31/2014, the ARK Innovation ETF (ARKK) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the U.S. equity market.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.

Index Details

The fund is sponsored by Ark Investment Management. It has amassed assets over $726.36 M, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad 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 on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.23%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

Looking at individual holdings, Tesla Inc (NASDAQ:TSLA) accounts for about 7.64% of total assets, followed by Stratasys Ltd (SSYS) and Intellia Therapeutics Inc (NTLA).

The top 10 holdings account for about 46.14% of total assets under management.

Performance and Risk

The ETF return is roughly 7.63% so far this year and it's up approximately 56.86% in the last one year (as of 05/05/2018). In that past 52-week period, it has traded between $25.69 and $44.98.

The ETF has a beta of 1.46 and standard deviation of 22.05% for the trailing three-year period, making it a medium risk choice in the space. With about 46 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.