Ark Investment is linked to “disruptive innovation” investments
What kind of company is Ark Investment
Ark Investment Inc. was founded in 2014 and is an institutional investor headquartered in Florida, USA. Cathy Wood, the founder of the company, prefixed the company name with ARK (arc), which means ark. The company's assets under management as of the end of December 2022 were 11.54 billion dollars, down 2.81 billion dollars from the end of the previous quarter.
Ark Investment Inc. was founded in 2014 and is an institutional investor headquartered in Florida, USA. Cathy Wood, the founder of the company, prefixed the company name with ARK (arc), which means ark. The company's assets under management as of the end of December 2022 were 11.54 billion dollars, down 2.81 billion dollars from the end of the previous quarter.
As a result of repeated intensive investments in companies with “disruptive innovation,” the average annual investment return from 2014 to 2021 for the Arc Innovation ETF under the umbrella of the company rose to 39%, and a return rate of more than three times that of the S&P 500 during the same period was recorded.
Under such circumstances, the Wall Street Journal issued a report in 2022/12 stating that “the Ark Innovation ETF has fallen 63% since entering 2022 until now, and has fallen 78% from its peak in 2021/2.” Regarding poor management of ETFs under the company's umbrella, Mr. Wood defended his own investment strategy, saying “we have set an investment period of 5 years.”
Top 10 Ark Investment Portfolios (as of 2022/4Q)
Top 10 Ark Investment Portfolios (as of 2022/4Q)
What is “disruptive innovation” at the core of the company's investment policy
Regarding “disruptive innovation,” the company positions technology, products, and services that can change the way people work. Specifically,
Bringing about a dramatic increase in productivity
Bringing about dramatic cost reductions
Being a platform that creates new innovations, etc.
The company defines that technology, products, and services that can clear any of the three conditions will be disruptive innovation.
The company also focuses on more than 10 fields with potential for disruptive innovation, such as artificial intelligence, DNA sequencing, CRISPR gene editing, robotics, electric vehicles, energy storage, fintech, 3D printing, blockchain, etc., and is investing heavily in stocks that are expected to double in stock prices over 5 years. Incidentally, the company is also investing in crypto assets, and Mr. Wood revealed his view in a Bloomberg TV interview that the price of Bitcoin will reach 1 million dollars in 2030.
The company's ETF list and features
Of the 8 ETFs managed and managed by the investment strategy, 6 are active management types and 2 are index management types. The characteristics and operating balances (as of 2023/2/13) of each ETF of the company are as follows.
1. ARKK (ARK Innovation ETF)
ARKK is an actively managed ETF that aims for long-term capital growth by investing in stock securities (65% or more of assets) of domestic and foreign companies related to the investment theme of disruptive innovation. The main incorporated brands include ZOOM, EXACT SCIENCES CORP, TESLA, ROKU, SQUARE, etc. ARKK, the company's flagship ETF, has an operating balance of 7.54 billion dollars. ARKK's total annual return as of 2022/10/31 was ▲ 59.55%.
Comparison of average operating return rates for 5 years until the end of 2021 for the S&P 500 Index, MSCI World Index, and ARKK
2. ARKW (ARK Next Generation Internet ETF)
ARKW is an actively managed ETF that aims for long-term capital growth by investing in US listed foreign equity securities (ADR) (80% or more of assets) in addition to companies in the US and overseas related to next-generation internet investment themes. The main incorporated brands include ZOOM, SQUARE, ROKU, and SHOPIFY TESLA. ARKW has an operating balance of 1.2 billion dollars. The ETF's total annual return as of 2022/10/31 was ▲ 59.28%.
Comparison of average operating return rates for 5 years until the end of 2021 for the S&P 500 Index, MSCI World Index, and ARKW
3. ARK Genomic Revolution ETF (ARK Genomic Revolution ETF)
ARKG is an actively managed ETF that invests in US and domestic stocks (80% or more of assets) in multiple sectors such as healthcare, IT, materials, energy, and consumer-related sectors related to genomic revolution theme investments, and aims for long-term capital growth. The main brands incorporated include EXACT SCIENCES CORP, IONIS PHARMACEUTICALS, PACIFIC BIOSCIENCES OF CALIFORNIA, TELADOC HEALTH, INCYTE CORP, etc. ARKW's operating balance is 1.2 billion dollars. The ETF's total annual return as of 2022/10/31 was ▲ 59.28%.
4. ARKQ (ARK Autonomous Technology & Robotics ETF)
ARKQ is an actively managed ETF that aims for long-term capital growth by investing in US and foreign stocks (80% or more of assets) related to investment themes such as autonomous driving and robot companies. The main incorporated brands include TRIMBLE, KRATOS DEFENSE AND SECURITY, TESLA, IRIDIUM COMMUNICATIONS, UIPATH, etc. ARKQ's operating balance is 960 million dollars. The ETF's total annual return as of 2022/10/31 was ▲ 39.72%.
Comparison of average operating return rates for 5 years until the end of 2021 for the S&P 500 Index, MSCI World Index, and ARKW
5. ARKF (ARK Fintech Innovation ETF)
ARKF is an active management ETF that aims for long-term capital growth by investing in US and foreign stocks (80% or more of assets) related to investment themes such as companies working on financial technology (hereinafter, “Fintech”) innovation. The main incorporated brands include SHOPIFY, SQUARE, COINBASE, MERCADOLIBRE, TWILIO, etc. ARKQ's operating balance is $890 million. The ETF's total annual return as of 2022/10/31 was ▲ 59.17%.
Comparison of average operating return rates for one year until the end of 2021 for the S&P 500 Index, MSCI World Index, and ARKF
6. ARKX (SPACE EXPLORATION & INNOVATION ETF)
ARKX is an actively managed ETF that aims for long-term capital growth by investing in US and foreign stocks (80% or more of assets) related to investment themes such as space exploration and innovation. The main incorporated brands include TRIMBLE, IRIDIUM COMMUNICATIONS, AEROVIRONMENT, KRATOS DEFENSE AND SECURITY, L3HARRIS TECHNOLOGIES, etc.
ARKX is an actively managed ETF that aims for long-term capital growth by investing in US and foreign stocks (80% or more of assets) related to investment themes such as space exploration and innovation. The main incorporated brands include TRIMBLE, IRIDIUM COMMUNICATIONS, AEROVIRONMENT, KRATOS DEFENSE AND SECURITY, L3HARRIS TECHNOLOGIES, etc.
ARKX has an operating balance of 290 million dollars. Since the ETF was established at the end of March 2021, there is no comparative data.
7. PRNT (3D PRINTING ETF)
PRNT is an index management type ETF that aims for investment results that almost match the performance of the Total 3D-Printing Index, which is designed to be linked to the stock prices of companies involved in the 3D printing industry. The main incorporated brands include CELLINK, ANSYS, FARO TECHNOLOGIES, PTC, DASSAULT SYSTEMES, etc. PRNT has an operating balance of 190 million dollars. The ETF's total annual return as of 2022/10/31 was ▲ 38.51%.
Comparison of average operating return rates for 5 years until the end of 2021 for the S&P 500 Index, MSCI World Index, and PRNT
8. IZRL (Israel Innovative Technology ETF)
IZRL is an index-managed ETF linked to the ARK Israeli Innovation Index and aims for investment results linked to the stock prices of Israeli companies listed on the Tel Aviv Stock Exchange, such as genomics, healthcare, biotechnology, and the internet. The main incorporated brands include TABOOOLA.COM, WALKME, MONDAYCOM, LEONARDO DRS, SILICOM, etc. IZRL has an operating balance of 110 million dollars. The ETF's total annual return as of 2022/10/31 was ▲ 36.47%.
Comparison of average operating return rates for one year until the end of 2021 for the S&P 500 Index, MSCI World Index, and IZRL
What are the highlights of Ark Investment Portfolio (2022 4Q)?
Looking at the 2022 4Q (as of the end of December) form 13F submitted by the company, from comparison with the Form 13F as of the end of 2022/9, while the company's operating balance decreased 20% to 11.54 billion dollars, incorporated stocks decreased from 250 stocks to 232 stocks, and stocks with a total market value exceeding 300 million dollars also decreased from 18 stocks to 14 brands. What is attracting attention is that the company has consistently focused on the healthcare sector and IT sector. The healthcare sector has recently expanded slightly from 32.8% in the 2016/4Q to 36.1%, and the IT sector has also risen from 23.9% to 35.4%. Meanwhile, in addition to the telecommunications sector falling from 21.5% to 5.0%, the general consumer goods sector also fell from 13.0% to 6.4%. From the changes in the company's portfolio in the last 5 years, the company's investment stance, which is shouldering an investment strategy with disruptive innovation, is clear at a glance.
Changes in the ratio of Ark Investment portfolios by sector (as of 2022/4Q)
Looking at the 2022 4Q (as of the end of December) form 13F submitted by the company, from comparison with the Form 13F as of the end of 2022/9, while the company's operating balance decreased 20% to 11.54 billion dollars, incorporated stocks decreased from 250 stocks to 232 stocks, and stocks with a total market value exceeding 300 million dollars also decreased from 18 stocks to 14 brands. What is attracting attention is that the company has consistently focused on the healthcare sector and IT sector. The healthcare sector has recently expanded slightly from 32.8% in the 2016/4Q to 36.1%, and the IT sector has also risen from 23.9% to 35.4%. Meanwhile, in addition to the telecommunications sector falling from 21.5% to 5.0%, the general consumer goods sector also fell from 13.0% to 6.4%. From the changes in the company's portfolio in the last 5 years, the company's investment stance, which is shouldering an investment strategy with disruptive innovation, is clear at a glance.
Changes in the ratio of Ark Investment portfolios by sector (as of 2022/4Q)
Legendary investor George Soros bought the company's ETF
While Tesla's stock price in 2022 was plummeting, famous investor George Soros has been buying more Tesla shares through Soros Fund Management. According to recent reports, Soros Fund bought 242,399 additional Tesla shares in the fourth quarter of 2022, bringing Tesla's total holdings to 332,046 shares. Also, the purchase of ARKK (ARK Innovation ETF) by Mr. Soros has also been revealed. Mr. Soros purchased 500,000 shares of ARKK (ARK Innovation ETF) as of 22/3Q. The ratio of Tesla shares in the same ETF was 6.5%. Along with the insight of Mr. Soros, known by the nickname “The Man Who Broke the Bank of England” (The Man Who Broke the Bank of England), we can't take our eyes off Ark Investments in the future.
While Tesla's stock price in 2022 was plummeting, famous investor George Soros has been buying more Tesla shares through Soros Fund Management. According to recent reports, Soros Fund bought 242,399 additional Tesla shares in the fourth quarter of 2022, bringing Tesla's total holdings to 332,046 shares. Also, the purchase of ARKK (ARK Innovation ETF) by Mr. Soros has also been revealed. Mr. Soros purchased 500,000 shares of ARKK (ARK Innovation ETF) as of 22/3Q. The ratio of Tesla shares in the same ETF was 6.5%. Along with the insight of Mr. Soros, known by the nickname “The Man Who Broke the Bank of England” (The Man Who Broke the Bank of England), we can't take our eyes off Ark Investments in the future.
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