ARK Innovation ETF Analysis (ARKK)
Chart done on daily timeframe. Cathie Wood has really made a name for herself on Wall Street in recent years, but unfortunately the reputation that now precedes her is mostly negative and doubtful. The cofounder and CEO of Ark Invest established her name in the name of innovation, taking on high risk names in hopes of long term prosperity. The firm mostly focuses on technology investments across different industries such as: electric vehicles, gene editing, artificial intelligence, streaming…etc. Their focus isn’t necessarily about the current numbers and revenue of these industries, but rather on what they could become as technological advancements take hold of them. Take Tesla for example, which is the largest holding in the Ark Innovation fund $ARKK, the fund holds this because they expect Tesla to become a power house in robotics and self-driving abilities, not so much because of their existing vehicles. Crispr Therapeutics is another major holding in ARKK, which the fund explains by the future they see in gene editing as it revolutionizes medicine.
These audacious goals are what the Ark Funds are built upon, but unfortunately for the funds investors, the plans haven’t followed through just yet. Most investors in the fund are unhappy with their lackluster returns, especially compared to the rest of the market. The investors still holding and buying are those who truly believe in the future of the holdings, which may have some sense to it. ARKK in specific holds Tesla, Coinbase, Roblox, Crispr, Palantir, Shopify, and a few other names; all of these names are leaders in their industry and have a chance to be pivotal in the future.
When planning out an investment portfolio, it is recommended to keep the majority of your capital in a low risk fund such as SPY or VOO, and then utilize another smaller percentage of the capital for higher risk investments. ARKK falls on the higher risk end of the investment grade, but it is still an investable fund that could supply strong returns in the future. The funds goals and vision is valid, especially with how quick technology is evolving. It makes a good high risk high reward holding.