ARK Shifts Gears In New ETF Filing

ARK Shifts Gears In New ETF Filing

The proposed ARK Transparency Fund is unusual relative to the firm’s existing offerings.

Reviewed by: Heather Bell
Edited by: Heather Bell

As August drew to a close, Cathie Wood’s firm ARK Invest filed for an ETF that will focus on the transparency of its holdings while excluding companies that are involved in a range of industries.

The ARK Transparency ETF does not yet have a ticker or expense ratio in its initial filing. The firm will evaluate companies based on their adoption of transparency standards, frequency in being sued and reputation, among other criteria, according to the fund prospectus.

With the focus on transparency rather than disruptive innovation, the proposed ETF departs from the focus of ARK’s other ETFs. ARK currently offers eight ETFs, all focused on disruptive innovation themes.

This fund differs from other ARK funds since it would track an equal-weighted index rather than relying on active management. Six of ARK’s eight funds are actively managed, with the firm having made its reputation on its stock-picking ability. Its two smallest ETFs, the $522 million 3D Printing ETF (PRNT) and the $284 million ARK Israel Innovative Technology ETF (IZRL), track indexes.


The ARK funds are known for buying holdings based on broad thematic mandates rather than rule-based exclusions. However, the Transparency ETF specifically precludes alcohol, banking, chemicals, confections, fossil fuel transportation, gambling, metals, mineral, natural gas, oil and tobacco from its investable universe.

A lot of those are standard exclusions for any ESG fund, but banking and confectionary, in particular, are somewhat unusual.

Given ARK’s longtime devotion to transparency regarding its trading and research, an ETF targeting transparency as a theme is not completely out of left field. In many ways, the concept fits right in with how the firm operates. It’s less a change in direction than it is adding a new dimension to its offering.

According to its methodology, the fund’s “thematic impact” index selects 100 holdings based on an evaluation that considers the following criteria: transparency standards; the simplicity of the company’s terms and conditions; the seriousness and number of the company’s related lawsuits; the transparency of its pricing structure for its products or services; and the company’s reputation based on a variety of rankings from multiple sources.

From there, the components are equally weighted, with rebalances occurring quarterly.

ARK has a total of $44.7 billion in assets under management in its ETFs, with the largest being the $22.5 billion ARK Innovation ETF (ARKK).

Contact Heather Bell at [email protected]

Heather Bell is a former managing editor of She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.