The ARK Innovation ETF (ARKK) is well known among investors for offering exposure to disruptive technology, but it’s important to look under the hood to properly understand what that entails.
The actively managed equity strategy seeks long-term capital growth by investing in the U.S.-listed securities, including ADRs, of companies focused on disruptive innovation, which is defined by the firm as the introduction of a technologically enabled product or service that potentially changes the way the world works.
Companies in ARK’s cornerstone strategy aim to capture the substantial benefits of new products or services associated with scientific research in DNA technologies, energy storage, the increased use of autonomous technology, next generation internet services, and technologies that make financial services more efficient, according to the firm.
Taking a deep dive into ARKK’s top holdings as of June 2, according to the fund’s website, unearths upward momentum in recent history, with top holdings recouping some of the negative impacts felt by growth stocks earlier this year.
Zoom Video Communications (ZM, 9.54%) is the fund’s top holding currently. The stock is up 8.94% over a five-day period, regaining some losses realized during the first quarter.
Zoom has new upside potential thanks to the tech market pullback, according to Daiwa Capital Markets, which says that the video communication company’s core business demand is stabilizing, Barron’s reported.
Tesla Inc. (TSLA, 9.03%), the automotive and clean energy company best known for designing and manufacturing electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, is up 18.81% over the past five days.
Roku Inc. (ROKU, 8.27%), the manufacturer of a variety of digital media players for video streaming, which has an advertising business and also licenses its hardware and software to other companies, is up 12.78% over a five-day period.
Block Inc. (SQ, 5.60%), formerly Square, Inc., is an American financial services and digital payments company. However, “calling Block a payments company is like calling Amazon a bookseller,” CFO Amrita Ahuja told CNBC last month. “We’ve grown in so many different ways across multiple dimensions.”
Shares of Block have increased 15.62% over a five-day period.
Exact Sciences Corp. (EXAS, 5.31%) rounds out the top five holdings in ARKK. Shares of the molecular diagnostics company specializing in the detection of early stage cancers have advanced 1.82% over the past five days.
The next top holdings include Crispr Therapeutics (CRSP, 4.64%), Teladoc Health Inc. (TDOC, 4.59%), Coinbase Global Inc. (COIN, 4.52%), Twilio Inc. (TWLO, 4.37%), and UIPATH Inc. (PATH, 4.14%), according to the fund’s website.
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