Some money managers may loathe the idea of revealing their methodology in a fully transparent actively managed ETF, but others have fully embraced the investment vehicle to provide greater value to investors.
“We believe in transparency. We believe that investors should know what they own and should understand what their asset managers are doing, what their advisors are doing,” Sebastian Benkert, CMO, ARK Invest, said at the 2019 Schwab IMPACT conference.
“All we do is invest in innovation, which we believe you need to be forward-looking, and there’s where active management comes in and it’s very important from our point of view,” Benkert added.
For example, ARK Invest’s flagship ARK Innovation Fund (NYSEArca: ARKK) seeks to invest in the cornerstone companies taken from healthcare, technology and industrial sectors that focus on investing in disruptive innovation. Such companies may include ones that benefit from big data, cloud computing, cryptocurrencies, the sharing economy, genomic sequencing, molecular medicine, agricultural biology, 3D printing, energy storage, and autonomous vehicles.
The actively managed fund includes companies that merge healthcare with technology and capitalize on the revolution in genomic sequencing. These companies try to better understand how biological information is collected, processed, and applied by reducing guesswork and enhancing precision; restructuring health care, agriculture, pharmaceuticals and enhancing our quality of life.
The technology component focuses more in the next generation of internet names. These tech companies benefit from the shifting bases of technology infrastructure to the cloud, enabling mobile, new and local services, such as companies that rely on or benefit from the increased use of shared technology, infrastructure and services, internet-based products and services, new payment methods, big data, the internet of things, and social distribution and media.
Lastly, the industrial exposure covers a so-called new industrial revolution or advances in autonomous vehicles, robotics, 3D printing, and energy storage technology that are enhancing productivity, reducing costs, and transforming the manufacturing landscape.
Additionally, investors can look to the ARK Industrial Innovation ETF (NYSEArca: ARKQ), ARK Web x.0 ETF (NYSEArca: ARKW) and ARK Genomic Revolution Multi-Sector Fund (NYSEArca: ARKG) to target the three innovative segments separately. The ARK Industrial Innovation ETF captures the converging industrial and technology sectors, capitalizing from autonomous vehicles, robotics, 3D printing, and energy storage technologies. The ARK Web x.0 ETF targets next-gen internet innovations like artificial intelligence, cloud computing, cryptocurrencies, and blockchain technology. Lastly, the ARK Genomic Revolution Multi-Sector ETF tracks the convergence of tech and health care.
ARK Invest also came out with the ARK Fintech Innovation ETF (ARKF) this year to help ETF investors capitalize on the burgeoning fintech industry that provides innovative financial solutions in a digital age. ARKF invests in equity securities of companies that ARK believes are shifting financial services and economic transactions to technology infrastructure platforms, ultimately revolutionizing financial services by creating simplicity and accessibility while driving down costs.
Watch the full interview between ETF Trends CEO Tom Lydon and Sebastian Benkert:
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