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Should You Invest in the ARK Innovation ETF (ARKK)?

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Looking for broad exposure to the Technology - Broad segment of the U.S. equity market? You should consider the ARK Innovation ETF (ARKK - Free Report) , a passively managed exchange traded fund launched on 10/31/2014.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

Investor-friendly, sector ETFs provide many options 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 9, placing it in bottom 44%.

Index Details

The fund is sponsored by Ark Investment Management. It has amassed assets over $820.64 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

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 0.20%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Intellia Therapeutics Inc (NTLA - Free Report) accounts for about 7.31% of total assets, followed by Tesla Inc (TSLA - Free Report) and Stratasys Ltd (SSYS - Free Report) .

The top 10 holdings account for about 48.52% of total assets under management.

Performance and Risk

The ETF has added about 21.60% and is up about 54.67% so far this year and in the past one year (as of 06/06/2018), respectively. ARKK has traded between $28.27 and $45.09 during this last 52-week period.

The ETF has a beta of 1.50 and standard deviation of 22.13% for the trailing three-year period, making it a medium risk choice in the space. With about 45 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.