Daily ETF Watch: ARK Launches 2 Funds

ARK Investments is launching two more innovation-focused ETFs.

HeatherBell_green_bg
|
Reviewed by: Heather Bell
,
Edited by: Heather Bell

ARK Investments is following up its late September launch of two ETFs respectively targeting “innovation” in the industrial and Internet sectors of the economy with the launch of two more funds focused on next-generation technologies.

The ARK Genomic Revolution Multi-Sector ETF (ARKG) and the ARK Innovation ETF (ARKK) continue the “disruptive innovation” theme established by the first two funds. The two new funds, like the original, have their primary listings on NYSE Arca, according to a communique from the company.

ARKG crosses sector lines to focus on companies linked to the genomics industry—including those whose products or services are based on or rely on genomics-related discoveries, research and innovation.

ARKK encompasses all three areas of innovation covered by the other ARK ETFs—genomics, industrial and technology.

Like the original two ETFs—the ARK Industrial Innovation ETF (ARKQ) and the ARK Web x.0 ETF (ARKW) —ARKG and ARKK are actively managed and come with expense ratios of 0.95 percent.

Portfolio Management

ARK will leverage its in-house expertise and outside research when selecting the holdings for each of the funds. All four funds are managed by ARK’s founder, CEO and Chief Investment Officer, Catherine Wood.

The ETFs are notable because the group represents the first actively managed ETF family to target specific sector-related niches.

Most active ETFs use a strategy- or style-based approach, such as value or growth, or absolute returns or quantitative analysis, but the ARK funds are evaluating the business activities of their potential holdings for how well they benefit from different business trends.

With very few actively managed ETFs having achieved notable success, any funds in the space that come forward with a new approach—such as those that rely heavily on industry-related expertise—will be closely watched.

 

Heather Bell is a former managing editor of etf.com. 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.