Is there a place for growthier investment plays in the market right now? With inflation slowing down less than expected, and the Fed lurking around the corner with higher and longer rates, it’s a fair question for investors who still want some growth exposure. That may prompt investors to take a good look at ARK Invest, with each of the ARK Innovation Fund (ARKK) and the ARK Autonomous Technology & Robotics ETF (ARKQ) hitting a key buy signal this week.
Following a tough 2022, the ARK Invest suite has seen returns turn around in a big way to start the year, with ARKK returning 30.7% YTD and ARKQ returning 22.7% YTD, for example. ARKK also bucked outflows for the suite over the last year overall, adding $1.1 billion in that time. Those numbers could help prime them to take advantage of a Nasdaq-100 rebound. Yes, the index fell 33% in 2022, but it has only fallen in back-to-back years once before and tends to rebound well.
Now add in that the duo has exceeded their 200-Day Simple Moving Averages (SMAs), and the case for ARK’s strategies becomes more exciting. ARKK sat at $42.28 midday Wednesday, much higher than its 200-Day SMA of $40.33 and its 50-Day SMA of $35.9.
That price momentum could also put the strategy on a collision course with a golden crossover tech indicator in which the 50-Day SMA crosses over its longer-term sibling. ARKQ, meanwhile, sat at $51 Wednesday compared to ARKQ’s $49.2 200-Day SMA and its $45 50-Day SMA, setting it on a similar path to a key buy signal.
ARKK actively invests in firms that benefit from disruptive innovations in areas like AI, DNA, automation, fintech, and cloud computing, charging 75 basis points. The ETF has picked up $57 million in net inflows over the last five days, outperforming its ETF Database Category Average and its Factset Segment Average with returns of 13.4% compared to 2.9% and 5.1% respectively.
ARKQ also invests in disruptive innovation-related companies, but those in the autonomous manufacturing and robotics spaces, charging the same fee. ARKQ has returned 12.2% over the last month, also beating its averages by nearly 10% and 5% respectively.
A growth-oriented view may be tough to navigate this year with the Fed and inflation a dual challenge for investors. For those charting a course to growthier stocks, though, ARK’s suite is one to watch closely as two of its leading strategies hit a key buy signal this week.
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