How to buy Ark ETFs?

How to buy Ark ETFs? That will be the topic of this article. Before introducing the topic, it would be useful for people to look at my article about why DIY investors tends to be a struggle for many people.

It is a mistake to assume that investors can easily do it themselves long-term, without some pitfalls.

Research from the Vanguard Group, through their “advisors alpha series” has also shown that people who go through advisors get better returns than people who go directly on a DIY basis.

This is perhaps due to the fact that advisors can help moderate people’s emotional impulses during stock market crashes and other unexpected events which do regularly come up every few years.

If you want to invest, including in Ark,, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below.

For those who prefer visual content, I summarise my main argument on the short video below:

Introduction

An exchange-traded fund (ETF) is a type of security that includes a collection of securities, such as stocks, that often track the underlying index, although they can invest in any number of industry sectors or use different strategies. ETFs are a lot like mutual funds; however, they are listed on exchanges and ETFs are traded throughout the day like ordinary shares.

A well-known example is the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index. ETFs can contain many types of investments, including stocks, commodities, bonds, or a mixture of different types of investments. An Exchange Traded Fund is a marketable security, which means it has a matching price that makes it easy to buy and sell.

An ETF is called an exchange-traded fund because it is traded on an exchange just like a stock. The ETF share price will fluctuate throughout the trading day as the stock is bought and sold in the market. This is in contrast to mutual funds, which are not listed on the exchange and only trade once a day after the markets close. In addition, ETFs tend to be more profitable and more liquid than mutual funds.

ETF types

Investors have access to various types of ETFs that can be used to generate income, speculate, raise prices, and hedge or partially offset risks in an investor’s portfolio. Below are a few examples of ETF types.

  • Bond ETFs can include government bonds, corporate bonds, and government and local bonds called municipal bonds.
  • Industry ETFs track a specific industry like technology, banking, or oil and gas.
  • Commodity ETFs invest in commodities such as crude oil or gold.
  • Currency ETFs invest in foreign currencies such as the euro or the Canadian dollar.
  • Inverse ETFs try to profit from falling stocks by shorting stocks. Selling short is selling a stock in anticipation of a decline in value and buying it back at a lower price.

Investors should be aware that many inverse ETFs are exchange-traded notes (ETNs) and not real ETFs. ETN is a bond, but traded like a stock and supported by an issuer such as a bank. Be sure to check with your broker if ETN is right for your portfolio.

In the United States, most ETFs are set up as open-ended funds and are subject to the Investment Company Act 1940, unless subsequent rules have changed their regulatory requirements. Open-ended funds do not limit the number of investors involved in a product.

ETF advantages and disadvantages

ETFs provide lower average costs as it would be expensive for an investor to buy all of the stocks in an ETF portfolio separately. Investors only need to complete one transaction to buy and one transaction to sell, which results in lower broker fees as investors only make a few trades. Brokers usually charge a commission for every trade. Some brokers even offer commission-free trading on certain cheap ETFs, further reducing investor costs.

The ETF expense ratio is the cost of operating and managing the fund. ETFs usually have low costs as they track the index. For example, if an ETF tracks the S&P 500 index, it can contain all 500 S&P stocks, making it a passively managed fund that takes less time. However, not all ETFs track the index passively.

Advantages

  • Access to many stocks in various industries
  • Low cost ratios and lower broker commission.
  • Risk management through diversification
  • There are ETFs that target industries

Minuses

  • Actively managed ETFs have higher fees
  • Single-Industry ETFs Limit Diversification
  • Lack of liquidity hinders transactions

What is ARK ETF?

ARK defines “disruptive innovation” as the introduction of a technologically advanced new product or service that potentially changes the way the world works.

ARK companies include those that rely on the development of new products or services, technological advances and advances in research and development related to DNA technology (“Genomic Revolution”), industrial innovation in energy, automation and manufacturing (“Industrial Innovation” ), increased use of shared technologies, infrastructure and services (“Next Generation Internet”) and technologies that make financial services more efficient (“Fintech Innovation”).

ARK is an actively managed ETF that seeks long-term capital growth by investing, under normal circumstances, primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are related to the Fund’s disruptive innovation investment theme.

ARK believes that innovation is the key to the long-term growth of a company’s revenues and profits. Its mission is to deliver long-term, low-correlation capital appreciation to traditional investment strategies by identifying and investing in the leaders, supporters and beneficiaries of disruptive innovation.

ARK quick founding story

Cathie Wood registered ARK as an Investment Advisor in January 2014. Katy founded ARK to focus exclusively on disruptive innovation. Throughout her career, Katie has focused on innovation, which has led her to realize that technology is increasingly blurring boundaries between and between sectors. 

As a result, she believes that the traditional research world is not in the mood to follow innovative companies. By conducting research across sectors, industries and markets, ARK aims to identify companies that are leaders and benefit from cross-sectoral innovations such as robotics, energy storage, DNA sequencing, artificial intelligence, and blockchain technology. 

Since launching its first funds in 2014, ARK now provides investment management services in North America, Asia, Australia and Europe. The firm offers a wide range of investment vehicles including ETFs, institutional and retail separately managed accounts, US and international mutual funds, and the UCITS fund. 

ARK’s investment strategies include: autonomous technology and robotics, next-generation internet, genomic revolution, fintech innovation, 3D printing, Israeli technology innovation, mobility as a service, space exploration, and ARK’s overall disruptive innovation strategy.

What is behind ARK’s success?

If we look at the top performing ARK ETFs, we can see that Tesla’s big footprint (TSLA) and focus on companies that benefit from “disruptive innovation” can be seen as their recipe for success. 

Notably, ARK defines disruptive innovation as the introduction of a technologically advanced new product or service that potentially changes the way the world works.

Amid the coronavirus pandemic, increased digitization and increased dependence on the Internet due to some of the new normal trends such as online shopping, work from home, digital payments, digitization of healthcare, the growing popularity of video games and many others have lent support to ARK’s investment strategy.

Cloud computing has become a key technology and is keeping pace with the growing trend of working from home in the fight against coronavirus. 

It supports organizations in remotely processing large amounts of information, developing and launching key applications and services, and helping employees around the world collaborate on the job.

Along with the increased interest in online shopping, customers are also turning to digital payments to pay bills. At the same time, sellers and utility providers are increasingly advocating the same.

The video game industry is booming as people increasingly play video games for home entertainment while maintaining social distancing amid the pandemic. Moreover, the video game boom could continue into the post-pandemic era.

The advancement of genomics is rapidly changing the healthcare landscape, revealing the mysteries of function, structure, evolution, editing and mapping of genomes. 

The global genomics market has been fueled by major developments in sequencing, microarrays, polymerase chain reaction, and nucleic acid extraction and purification. 

In addition, the use of artificial intelligence, cloud technology and increased focus on research and development has provided a competitive advantage to companies that are heavily influenced by genomics.

ARK now

ARK Investment Management now manages $ 41.5 billion ETF products following a huge inflow of investments in 2020, compared to $ 39.7 billion from WisdomTree. Notably, ARK Investment Management ranked WisdomTree among the top 10 issuers in the ETF industry. Interestingly, ARK had less than $ 3.5 billion in total assets last year.

Commenting on ARK’s success, Todd Rosenbluth, director of ETF research at CFRA Research, said: “In the first 25 years of the ETF industry, ETFs meant index products to most investors, and ARK turned that upside down and emphasized that active governance can exist. and you will succeed.”

Best ARK ETFs

Before we will start discussing the available options to invest or buy ARK ETFs let’s first see what are other ARK ETFs available in the market.

Let’s now focus on the active ETFs offered by ARK.

ARK ETFs buy companies that benefit from groundbreaking innovations such as TESLA (TSLA) and CRISPR THERAPEUTICS (CRSP).

There are currently 5 active ARK ETFs:

  • ARKK (ARK Innovation ETF)
  • ARKQ (ARK Autonomous Technologies and  Robotics ETF)
  • ARKW (ARK Next Generation Internet ETF)
  • ARKG (ETF ARK Genomic Revolution)
  • ARKF (ARK FINTECH INNOVATION ETF)

ARK Innovation ETF ARKK – up 169.9%

This actively managed fund includes companies that rely on or benefit from the development of new products or services, technological advances and advances in scientific research related to DNA technology (“Genomic Revolution”), industrial innovation in energy, automation and manufacturing (Industrial Innovation), the increased use of shared technologies, infrastructure and services (Next Generation Internet) and technologies that make financial services more efficient (Financial Technology Innovation). 

Unsurprisingly, Tesla, Roku ROKU, CRISPR Therapeutics and Square SQ are part of its four main holdings.

The ARKK basket contains 51 shares. Its expense ratio is 0.75% and its asset base has amassed $ 21.04 billion. The fund trades on average over three months with a trading volume of 4.3 million shares.

ARK Genomic Revolution ETF ARKG – up 208.4% over the past year

It is an actively managed ETF targeting companies that can benefit from expanding and improving the quality of life of people and others by incorporating technological and scientific developments, as well as improvements and advances in genomics into their business. 

Pacific Biosciences (PACB), Teladoc Health TDOC and CRISPR Therapeutics CRSP are among the fund’s top five holdings.

There are 53 shares in the fund’s basket. Its expense ratio is 0.75% and its asset base has amassed $ 9.44 billion. The fund trades an average of 3.2 million shares in three months on average.

ARK Next Generation Internet ETF ARKW – up 156.9%

Another actively managed ETF includes companies that are focused on bringing underlying technology infrastructure to the cloud and are expected to benefit from this by providing mobile, new and on-premises services, such as companies that rely on or benefit from increased use of shared technologies, benefits, infrastructure and services, internet products and services, new payment methods, big data, the internet of things, and social distribution and media. Tesla, Roku, Grayscale Bitcoin Trust GBTC and Square rank in the top four.

There are 56 shares in the ARKW basket. Its expense ratio is 0.76% and its asset base has amassed $ 5.86 billion. The fund trades an average of 1.1 million shares in three months on average.

ARK ETF Autonomous Technology & Robotics ARKQ – up 119.4%

ARKQ is an actively managed ETF that focuses on the development of new products or services, technological improvements and research advances related to, among others, energy, automation and manufacturing, materials and transportation, and is expected to derive significant benefits from them. Tesla takes first place here too.

There are 43 shares in the ARKQ basket. Its expense ratio is 0.75% and its asset base has amassed $ 2.07 billion. The fund trades with an average three-month trading volume of 588,000 shares.

ARK Fintech Innovation ETF ARKF – up 102.9%

ARKF is again an actively managed ETF that seeks to achieve its investment objective by investing, under normal circumstances, mainly (at least 80% of its assets) in domestic and foreign equity securities of companies that participate in the investment theme of the Fintech Innovation Fund. Square, Zillow (Z) and PayPal Holdings PYPL rank in the top 10 of the fund.

The ARKF basket contains 47 shares. Its expense ratio is 0.75% and its asset base has amassed $ 2.24 billion. The fund trades an average of 1.2 million shares in three months on average.

How to buy ARK ETFs?

ARK ETFs are listed on NYSE Arca. As long as your broker supports NYSE Arca, you should be able to buy from ARK ETFs, just like you can buy any US-listed S&P 500 ETF. If you live in Europe, you may be able to buy it through Tastyworks.

How to buy ARK ETFs on monthly basis?

This is where Robo Kristal.AI comes to the rescue. Kristal.AI allows you to buy individual ETFs for free for AUM under $ 10,000 (excluding ETF expense ratio). They have a wide variety of ETFs that you can include in a System Investment Plan (SIP), which is similar to an RSP.

What is the minimum investment amount?

With Kristal.AI, you cannot buy fractional stocks and your minimum investment in these ETFs must be over $ 100. (From what I’ve observed on ARK ETFs). So instead of setting the investment amount, you should set the number of stocks you want to buy each quarter / month / bi-monthly / week / daily.

The expense ratio is 0.75% for all ARK ETFs except ARKW, which is 0.76%. The expense ratio is higher as these funds are actively managed.

Q&A

What does the name “ARK” mean?

Katie Wood founded ARK Invest to focus solely on groundbreaking innovation and capitalize on the investment opportunities they create. Over the course of her career, she has learned that investing in revolutionary innovation requires:

-ACTIVE management to capitalize on rapid change that creates innovation.

-An open RESEARCH ecosystem free of sectors, geographic regions and market capitalization to capture technology convergence.

– Sharing KNOWLEDGE for a deeper understanding of the areas that we research and in which we invest. So, ARK is an acronym for: Active Research Knowledge.

What is thematic Investing?

ARK uses thematic investing to drive groundbreaking innovation. Thematic investment seeks to capitalize on long-term trends that extend across economic sectors and geographic boundaries. 

ARK believes that thematic strategies can better adapt to rapid change and include a deep understanding of the underlying drivers of long-term value creation and risk. 

ARK conducts research across sectors, industries and markets to better understand the convergence and market potential of disruptive innovation and thus more adequately assess investment opportunities.

ARK thematic analysts ask questions:

– Where is the next big revolutionary innovation?

– What is the size of the entire market?

– Which industries will be undermined?

  • Which companies will be the winners?

What is the ARK investment process?

The ARK investment process initially explores from the top down how the world is changing and where it is headed. ARK uses an open research strategy to gather information, helping define and improve its internal research process. 

Contributions include theme developers who are opinion leaders in their fields, interact with social media, and collect information from people who respond to public ARK research. 

Using this information iteratively, ARK analysts work with the Chief Research Officer and CIO to “size” and “resize” opportunities. As a result of extensive and repetitive research steps, ARK predicts and evaluates multi-year value chain transformations and market opportunities. 

Through this process, certain companies are pushed to the top as the most profitable to benefit from the identified investment premise, after which ARK begins its bottom-up process. 

ARK evaluates potential investments based on key metrics by entering values ​​into a proprietary scoring system to quantify companies in the context of opportunity. Finally, as CIO and Portfolio Manager, Catherine Wood is ultimately responsible for selecting investments and approving all investment decisions.

What is ARK Sales Discipline?

ARK will reduce or increase positions in order to:

  1. take advantage of opportunities created by short-term negative market action or market sentiment; 
  2. provide liquidity for investment in companies that the ARC is relatively more trusting; 
  3. or names of funds that ARK believes offer relatively more market opportunity than current price. 

ARK uses its own scoring system to evaluate companies and track key investment theses. Any score downgraded to 6 or below (1 to 10) triggers a full inventory check. 

ARK will sell a company if it believes the destroyer itself has collapsed or that it is no longer at the forefront of fast-growing industries or innovation. Note. This only applies to actively managed ARK ETFs. Index ETFs are designed to track an index. 

What makes ETFs worth for investing?

Exchange Traded Funds (ETFs) have a number of features that can make these investment vehicles ideal for especially young investors with little capital to invest in. First, ETFs allow you to create a diversified portfolio with relatively small investment amounts. In addition, ETFs are traded throughout the day, providing ample liquidity, and many are relatively low in value. In fact, there are at least five reasons why young investors might want to consider ETFs as potential investment opportunities.

ARK ETFs are good option to start with, which offers suitable minimum investment amount of $ 100, that is totally affordable. Another great thing is that ARK ETF is directly connected to innovations and technology which will also be interesting for younger generation. 

Pained by financial indecision? Want to invest with Adam?

Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 231.2 million answers views on Quora.com and a widely sold book on Amazon

Further Reading

In the article below, taken from my Quora answers, I speak about the following topics:

  • How do most millionaires make their first million? Inheritance, investing, salary or businesses? The answer might surprise you.
  • Has the stock market really changed compared to ten years ago? I challenge that notion.
  • Do attitudes differ between wealthy and non-wealthy people, or is that a misconception that too many people have?
  • Interest rates are 0% in most countries around the world. This presents a challenge for retirees. How can they invest in a safe and long-term manner?

To read more click below:

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