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Innovation ETF (ARKK) Hits New 52-Week High
For investors looking for momentum, Ark Innovation ETF (ARKK - Free Report) is probably on your radar now. The fund just hit a 52-week high of $23.94. Shares of ARKK are up roughly 30.54% from their 52-week low price of $17.93/share.
But could more gains be ahead for this ETF? Let’s take a quick look at the fund and the near-term outlook to get a better idea on where it might be headed:
ARKK in Focus
ARKK is an actively managed fund, providing significant exposure to domestic technology and health care companies among others. It has key holdings in the Health Care, Information Technology, and Consumer Discretionary sectors, with almost 90% allocation to them. The fund charges 75 basis points in fees. It has around 52% allocated to its top 10 holdings and the top three holdings are Athenahealth Inc , Tesla Motors Inc (TSLA - Free Report) , and Illumina Inc (ILMN - Free Report) (see : all the Alternative Energy ETFs here).
The fund has AUM of $17.7 million and trades in an average volume of 5,100 shares.
Why the Move?
The recent blow to President Trump’s healthcare bill led to a rally in the sector. This was a positive for this fund, given its high exposure to the space. From an individual holdings perspective, Tesla Inc. has 9% allocation while 4.7% is allocated to Amazon (AMZN - Free Report) . Recently, China’s Tencent Holdings acquired a 5% stake in Tesla, which led to a surge in the stock (read: Tencent Buys 5% Stake in Tesla: ETFs in Focus).
Furthermore, Amazon is set to expand into the Middle East, with its recent deal to acquire Souq.com. Both these deals impacted the ETF (read: Amazon Inks Deal to Acquire Souq.com: 2 ETFs in Focus).
More Gains Ahead?
There is still uncertainty regarding President Trump’s policy implementation. So it is hard to get a handle on the fund’s future returns one way or another. However, the ETF has a weighted alpha of 27.5 and a moderate 14-day standard deviation of 14.9%. So there is definitely some promise for those who want to ride this surging ETF a little further.
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