ARK Invest, led by Cathie Wood, offers several exchange traded funds with the focus on disruptive innovation. The five actively managed ARK funds have had amazing returns recently. The following is the returns for the actively managed ETFs for 1 year as of November 30, 2020:
-ARK Innovation ETF (ARKK) 123%
-Autonomous Technology and Robotics ETF (ARKQ) 97%
-Next Generation Internet ETF (ARKW) 142%
-Genomic Revolution ETF (ARKG) 141%
-ARK Fintech Innovation ETF (ARKF) 97%
These returns are absolutely amazing especially considering the S&P 500 returned about 17% during the same time period. The returns that the ARK funds provide do come at a price. Because these are actively managed funds the expense ratio is rather high at around 0.75%. For many investors the expense ratio is worth it to pay others to actively manage the funds so they can remain passive. Despite the high expense ratio the ARK funds look to be a great investment.
I have decided to take a different approach to investing in the ARK funds. I took a look at the top 10 holdings in each of the five ARK funds listed above. Some of the funds have some overlap in companies. In all I invested in 30+ companies that the ARK funds invest in. I also added a couple of other companies that I expect to grow fairly rapidly over the next few years. You can see all of the holdings here: https://m1.finance/yhahVyq_HLoE . I chose M1 Finance for this account because of the user interface. I created a pie and decided the percentage of the portfolio for each holding. As I add money to the account M1 Finance will dynamically rebalance the account by buying the holdings that are underweight based my settings. If you are interested in opening an account with M1 Finance here is my referral link: https://m1.finance/ktIiFeOI5zDr . M1 Finance offers promotions for referrals. At the time of this writing, M1 is offering $30 if you use the referral link and fund your new account. I would also receive $30. M1 does change its promotions often so please read the terms before opening an account.
The approach I am taking is rather risky which is why I am only investing a small amount into this account. The wise move would probably be to invest in the ARK funds directly. The first week has gone well as illustrated in the picture above I have returned almost 12%. I will continue to provide regular updates on how this account is performing over time.
*Disclaimer – I am not a financial professional. The information shared here should not be considered financial advice. I am just a factory worker sharing my experience as I strive to achieve financial freedom. Before investing or making any financial decision do your own research and due diligence and consider seeking the advice of a financial and/or tax professional.