Exploring The ARK Innovation ETF

ETFs or exchange-traded funds are one of the best ways to invest your money into the financial markets. Investing in an ETF ensures your money is well-diversified and simultaneously balances your portfolio while minimizing the overall risk. However, finding the right ETF to invest in can be a challenging task. With several types and categories of ETFs out there, it can seem pretty overwhelming. But, ETFs are not that complicated. Nowadays, tracking the performance of any fund or ETF is relatively simple. With tons of data available on the internet, you can easily track the performance of any ETF that you wish to invest in. This will help you make better investment decisions as proper research and due diligence are crucial when deploying your capital in the financial markets. 

In this article, we bring to you one of the best performing ETFs of recent times, the ARK Innovation ETF. The ARK Innovation ETF is a fund managed by Cathie Wood’s Ark Invest and it focuses on new and disruptive technologies. With several interesting stocks in its portfolio, this fund has a well-diversified and balanced basket of securities. Companies that comprise ARKK’s portfolio range from various sectors such as DNA Technology, fintech innovation, robotics, automation, artificial intelligence, and more. Managed by Cathie Wood herself, this fund delivered a staggering 170% in the year 2020.

Listed on the New York Stock Exchange, this ETF has over $22 billion in assets under management. Started in 2014 by Cathie Wood, this fund has been constantly outperforming the markets. In this write-up, we will go over the ARK innovation ETF and explore this fund in detail, giving you a proper picture of the ETF and help you make better investment decisions! 

The ARK Innovation ETF

The Ark Innovation ETF or ARKK is an actively managed equity ETF that focuses on disruptive innovation and emerging technologies in various sectors. Being the largest actively managed ETF, this fund allocates its capital in various sectors and aims to capitalize on cross-sector macro and long-term trends. With an expense ratio of 0.75%, this is a very effective and efficient ETF when it comes to generating wealth in the long run. ARKK aims to generate long-term wealth for its investors with an average time horizon of 5 to 7 years. The ARK Innovation ETF generally invests around 65% of its assets in domestic and foreign equity under normal circumstances in the market. Cathie Wood defines disruptive innovation as the future and explains how the introduction of these technologies has the potential to change the way our world functions. 

Cathie Wood and her investment management firm are very confident in their investment decisions and believe that this ETF will deliver an average of 20% return annually. With a heavy focus on emerging sectors and companies like genomic revolution companies, artificial intelligence companies, automation transformation companies, and more, ARKK has a promising portfolio. With thematic investing and cross-sector investing, ARKK utilizes an open approach and uses its “Open Research Ecosystem” to find potential investment opportunities. Diversifying across various market sectors, the fund ensures that no single part of its portfolio can drag down the overall performance and have a negative impact on its returns. The ARK Innovation ETF has undergone a huge growth phase from managing less than $2 billion of assets in August 2018 to amassing and managing a whopping $22 billion in May of 2021, all within a span of 3 years. This shows the remarkable performance of this ETF and excellent investment management executed by ARK’s CIO, Cathie Wood. 

ARK Innovation ETF’s Top 5 Holdings 

The ARK Innovation ETF holds a total of 58 stocks in its portfolio as of May 2021. These stocks range from several different market sectors such as fintech, automation, artificial intelligence, electric vehicles, and many more. With $22.28 billion in assets under management, this is one of the largest actively managed funds. ARKK has an expense ratio of 0.75% and is a highly liquid ETF that is traded primarily on the New York Stock Exchange. The top 5 holdings of ARKK are one of the reasons it has performed so well and delivered a staggering 170% return on investment in 2020. Let’s go over the 5 largest holdings in ARKK’s portfolio as studying them will provide us an interesting finding on how Cathie Wood strategized her investments and handled the financial crash caused by the Covid-19 pandemic in the best way possible. Now, the top 5 holdings of ARKK’s portfolio that have the highest weightage in the fund are the following –

  1. TESLA INC. 
  3. ROKU INC.

Now, let us go over each of the following stocks that make up the top 5 holdings of ARKK. 

ARK Invest's Top 5 Holdings


Tesla, Inc. is an American electric vehicle and clean energy company that is based in Palo Alto, California. Ranked as the world’s best-selling battery-electric and plug-in vehicle manufacturer, Tesla holds almost 16% of the market share in the plug-in segment and 23% of the electric vehicle segment according to sales data for the year 2020. Apart from electric vehicles, Tesla also manufactures battery-energy storage devices, solar panels and roof tiles, and several other energy-related products. Tesla was founded in July 2003 by Marc Tarpenning and Martin Eberhard as Tesla Motors. Elon Musk has been serving as the CEO of Tesla since 2008. 

Tesla Inc. (TSLA) holds the highest weight in ARKK’s portfolio with an overall weightage of around 10.88% (As of 5/11/2021). Tesla’s stock has been in a powerful uptrend since the beginning of 2020 and has contributed quite a bit to the ARKK’s overall excellent performance. As seen in the weekly time-frame chart of TSLA below, Tesla has been in an uptrend from January 2020 up until January 2021. The stock is seeing some consolidation recently and has retraced from its all-time high levels. But moving from levels of around $100 to almost $900 in the span of 12 months is truly remarkable and that’s why Tesla holds the highest weightage in ARKK’s portfolio. 

TSLA - Weekly Timeframe Chart


Teladoc Health, Inc. (TDOC) is a multinational telemedicine and virtual healthcare company based in the United States. This company is involved in several services that include telehealth services, AI and analytics, medical opinions, and licensable platform services. Teladoc Health focuses primarily on providing health care services via telephone and video conferencing software and mobile apps. This is one of the largest telemedicine companies in the United States and was founded back in 2002. Since then, it has acquired several companies such as BetterHelp in 2015, Best Doctors in 2017, and Advance Medical in 2018. Teladoc Health Inc. primarily trades on the NYSE. 

Teladoc Health Inc. holds the second position in ARKK’s portfolio with around 6.17% weightage in the funds’ overall portfolio (As of 5/11/2021). TDOC has witnessed a huge upward trend largely due to the fact that the pandemic caused a huge rise in online healthcare services. Therefore, the large demand and consumption of online telehealth care services during the pandemic fueled the stock’s rally, also benefiting ARKK’s portfolio and its performance. As seen in the weekly time-frame chart of ARKK below, this stock has witnessed huge momentum from January 2020 up until February 2021. The stock saw a huge correction lately and has almost lost half of its previous gains, but this is a consolidation period and TDOC might resume its upward trend soon.

TDOC – Weekly Timeframe Chart


Roku Inc. (ROKU) holds the third-largest position in ARKK’s portfolio with a 5.27% weightage in the overall fund (As of 5/11/2021). Roku Inc. is an American company that is publicly traded on Nasdaq. Based in San Jose, California, Roku Inc. was founded in October 2002 by Anthony Wood. The name “Roku” means “six” in the Japanese language. This represents the fact that Roku Inc. was the sixth company that was founded by Anthony Wood. Roku Inc. is involved in the manufacturing of digital media players used for video streaming. The company is also involved in other businesses that include advertising and licensing its hardware and software to other organizations. 

As seen in the weekly time-frame chart of Roku below, this stock has witnessed a huge upwards trend that began in March 2020 and led up until February 2021. The chart also shows that ROKU has witnessed a corrective phase recently and has retraced back to the levels close to $300 from its all-time high levels of around $480. The Covid-19 pandemic played a huge catalyst in the rally of this stock as the pandemic forced millions of people indoors and thus increased the sales and demand of video streaming services. ROKU was listed on the Nasdaq stock exchange in September 2017, and since then it has been in a gradual but consistent uptrend. 


Square Inc. (SQ) comes in at fourth position with a 4.68% weightage in ARKK’s portfolio (As of 5/11/2021). Square Inc. is an American financial services and digital payments company based in San Francisco, California. Founded in 2009 by Jack Dorsey and Jim McKelvey, Square Inc. launched its first platform in 2010. As of 2020, Square’s market capitalization is valued at over $100 billion. SQ is traded on the New York Stock Exchange since it was listed in November 2015. Fintech and financial services companies have witnessed a huge growth phase in recent times largely due to digitalization and the widespread use of online financial platforms & services.

As seen in the weekly time-frame chart of Square Inc. below, SQ has witnessed a powerful uptrend just like all of the previous stocks we have discussed. From the beginning of March 2020 up until February 2021, SQ was in a solid uptrend. The stock is currently in a consolidation phase and trading range-bound. However, the move from around $40 to levels as high as $280 was largely due to the pandemic and increased usage and demand of online financial services and platforms. By now, we hope you might have sensed that all of the top 5 stocks of ARKK witnessed a similar kind of trend and have performed in a similar fashion. We’ll discuss this point later in the article.

SQ – Weekly Timeframe Chart


Shopify Inc. (SHOP) holds the fifth-largest position in ARKK’s portfolio with a 3.80% weightage in the fund’s portfolio (As of 5/11/2021). Shopify Inc. is a Canadian multinational e-commerce company that is based in Ottawa, Ontario. This company offers online retailers a vast range of services that include making payments, marketing, shipping, and customer engagement tools. Shopify is used in more than 175 countries and has over a million businesses registered with them. Founded by Tobias Lutke and Scott Lake in 2006, Shopify is the largest publicly traded Canadian company by market capitalization. 

As seen in the weekly time-frame chart of Shopify Inc. below, Shopify’s stock also witnessed huge bullish momentum during the pandemic which started in March 2020 and let up to February 2021. After February 2021, the stock has been in a consolidation phase and is trading in a range. However, this move was also fueled by the excessive demand and usage of Shopify’s online platform as people were attracted to the idea of working remotely from home. SHOP witnessed a gain of more than 1000% in a timeframe of less than 12 months. 

SHOP – Weekly Timeframe Chart

How Cathie Wood Strategized her Investments During the Covid-19 Financial Crisis

Now, after going through all the above stocks that make up the top 5 holdings of the ARK Innovations ETF, you might have noticed a similarity. All of these stocks witnessed massive bull runs during the financial crash caused by Covid-19. Where the rest of the financial markets and various securities were down several hundred percent, these companies were largely profitable and witnessed some of the biggest upward momentum trends ever seen. This is where Cathie Wood’s excellent investment planning and expertise made ARK Invest and its investors a ton of fortune. This is the reason ARK Invest’s ARK Innovation ETF delivered a staggering 170% return on investment during the year 2020. Cathie Wood selected stocks and companies that would benefit from the pandemic and was highly accurate in her investment choices.

Using their efficient and effective investment strategies, ARK Invest selected stocks like the above 5 securities and maximized the opportunities that were presented during the 2020 financial crisis. This is how disruptive innovation offers breakthroughs via companies that work in areas that have the potential to change and impact how our world functions. While several of ARKK’s stocks have not been performing very well recently, they have delivered huge returns to ARKK’s portfolio taking their fund’s performance to a whole new level. As seen in the table below, ARKK’s performance has been consistent and impressive since its inception. This investment management firm focuses and invests in companies that benefit from disruptive technologies and trends that present high-potential opportunities. 


We hope that this article provided you valuable information and insights on the ARK Innovation ETF. Via our short analysis of the top 5 holdings of ARKK, it can be seen that proper research and due diligence can pay off handsomely and deliver stunning return on investments. Cathie Wood and Ark Invest have shown how capitalizing on trends in the disruptive technologies sector can generate huge long-term wealth. This is evident and can be seen in their funds overall performance. So, we hope that this has inspired you to start finding opportunities in the financial markets and generate wealth for your coming future. If you found this article helpful, then make sure to check out Jeremy’s YouTube channel “Financial Education” for more such interesting content. Happy Investing!