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

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If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than 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.

Sector ETFs are also funds of convenience, offering many ways 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 6, placing it in top 38%.

Index Details

The fund is sponsored by Ark Investment Management. It has amassed assets over $1.22 B, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market.

This ETF is active and does not track a benchmark.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.75%, making it one of the most expensive products in the space.

It has a 12-month trailing dividend yield of 0.19%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Tesla Inc (TSLA - Free Report) accounts for about 8.12% of total assets, followed by Stratasys Ltd (SSYS - Free Report) and Intellia Therapeutics Inc (NTLA - Free Report) .

The top 10 holdings account for about 47.27% of total assets under management.

Performance and Risk

So far this year, ARKK has added roughly 27.05%, and was up about 57.60% in the last one year (as of 07/24/2018). During this past 52-week period, the fund has traded between $29.62 and $48.37.

The ETF has a beta of 1.49 and standard deviation of 22.32% 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.