The ARK Fintech Innovation ETF (ARKF) is an actively-managed fund from the team at ARK Invest that tries to pick the companies best positioned to profit from advancements in energy, automation, manufacturing, materials and transportation. The advisory firm, led by Catherine Wood, has an impressive track record doing what most stock pickers fail to do: beating the market. This fund aims to pick the winners in financial technology such as blockchain, transaction innovation, and customer platforms. The fund owns about 40 stocks. Its top holding is mobile payment company Square Inc., real estate listings giant Zillow, and MercadoLibre, an online trading site for Latin American markets. ARKF also owns sizable slugs of tech and social media giants like Apple and Pinterest.
ARKF launched in late 2019, years after some of its closer competitors, so it lags in size but has still raised more than $100 million in assets. ARKF’s management fee of 75 basis points might seem expensive in the ultra-low-cost world of passive ETFs, but it’s cheap for active management. It might look like an especially good bargain compared with passive competitors such as the ETFMG Prime Mobile Payments ETF (IPAY) which charges the same fee as ARKF, or the Global X FinTech ETF (FINX) which costs 68 basis points. Any actively-managed product is ultimately a bet on the portfolio managers who pick the stocks. ARK’s products are geared toward investors who have the fortitude and faith to ride out short-term blips in the hopes of earning long-term alpha.