Analyst Report
The ARK Genomic Revolution ETF (ARKG) 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.
ARKG invests in companies that could profit from technological and scientific advancements in gene editing, genetic therapy, molecular diagnostics, and stem cell advances.
It’s a niche product without a lot of competition. ARKG’s nearest rival is likely the iShare Genomics immunology and Healthcare ETF, an index-tracking ETF that launched in June 2019.
Beyond the active/passive difference, IDNA’s holdings are dominated by major pharmaceutical firms like Moderna, Regeneron and Gilead Sciences, whereas ARKG’s portfolio is tilted toward significantly smaller firms.
There isn’t a lot of performance history to compare, but it’s worth nothing that IDNA beat ARKG in the first ten weeks of 2020, when global markets were rocked by the coronavirus outbreak and investors were eagerly hunting for potential profit in companies researching treatment and vaccines.
But that’s just a fleeting snapshot during a particularly turbulent time. 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 favor of the prospect long-term alpha.
