Which ARK ETF Should Investors Veer Toward and Why?
ARK Invest has numerous ETFs (with more on the way). Which ARK ETF is best for investors and why? What can investors expect?
Feb. 1 2021, Published 12:52 p.m. ET
Cathie Wood has positioned herself as a market influencer thanks to her wildly successful lineup of ARK ETFs. As a collection of actively managed baskets, these ETFs are geared toward next-generation innovation and technological advancement for the environment and people alike.
The ARK umbrella crossed $5 billion in assets under management in 2018, and the number soared to $34.5 billion by the end of 2020. The returns appeared to grow just as rapidly.
ARK ETFs have performed well during a volatile era
Currently, ARK Invest has five actively managed ETFs and two indexed innovation ETFs.
ARKK is the staple ETF and has seen a 160.38 percent growth in the 12 months ending Feb. 1. The shares dipped by about 42 percent during the pandemic-induced market crash in February 2020, but they quickly recuperated and have grown dramatically since then.
ARKG, the genomic revolution ETF, has seen even more growth with a 12-month return of over 200 percent. The growth makes sense considering the Nobel-worth movement in gene editing over the last year.
During the same period, ARKQ (autonomous technology and robotics), ARKW (next-generation Internet), and ARKF (fintech innovation) have grown 116.82 percent, 146.97 percent, and 107.71 percent, respectively.
ARK Invest's two indexed ETFs have also seen marked growth, although it isn't quite as sweeping. PRNT (3D printing) grew 77.99 percent, while IZRL (Israel innovative technology) saw a 42.86 percent return during the same 12-month period.
ARK ETFs pay dividends
ARK ETFs do pay dividends. Historically, they have done so on an annual basis in December of the calendar year. These ETFs have only been on the market since 2017, so there haven't been many dividends yet.
Which ARK ETF has Bitcoin?
ARKW holds the Grayscale Bitcoin Trust ("GBTC" on the OTC markets), while ARKF holds Square ("SQ" on the NYSE — a Bitcoin partner).
Which ARK ETF has Tesla?
Tesla ("TSLA" on the Nasdaq) holds a 9.39 percent weight in ARKW and a 9.37 percent weight in ARKK. As a result, Tesla is high up on the priority list for ARK watchers.
Three ARK ETFs are the best to buy
ARKK is probably the best for beginners because it's the most industry diverse. However, a portfolio including ARKK, ARKG, and ARKQ is a solid ARK Invest inclusion.
How to buy ARK ETFs
The ARK ETF collection trades on either the BATS exchange or the NYSE ARCA depending on the basket. You can purchase shares on any online brokerage like Charles Schwab, Fidelity, E-Trade, Envestnet, TD Ameritrade, UBS, RBC, Stifel, Raymond James, Pershing, Morgan Stanley, Robinhood, and more.
Be sure to set your stock to automatically reinvest dividends to help maximize your long-term gains. Consider buying in on a dip as well. However, you might have to be quick because these ETFs tend to grow rapidly.
As ARKX, the space innovation ETF, looms over the market, you might want to keep your eyes on ARK Invest as a whole.