The ARK Web x.0 ETF (NYSEArca: ARKW) isn’t an ordinary internet exchange traded fund and that’s more than alright if one asks its investors.
What makes ARKW vaunted in this ETF category is flexibility and ability to more rapidly react to changing market trends and growth opportunities than prosaic index-based fare.
ARKW aims to capture long-term growth with low correlation of relative returns to traditional growth strategies and negative correlation to value strategies. It serves as a tool for diversification due to little overlap with traditional indices. The actively managed strategy combines top-down and bottom-up research in its portfolio management to identify innovative companies and convergence across markets, and this active strategy comes in the low-cost and efficient ETF wrapper.
One area where ARKW’s disruptive properties offer investors opportunity is home buying, an old guard industry already being disrupted by increasing digitization.
ARKW: An Agile Choice for a Changing World
“On Zillow’s third quarter earnings call, CEO Rich Barton stated, ‘In September, we saw the pace of existing home sales climb to the highest level since 2006, exceeding 6.5 million annualized units,’” according to ARK Invest. “We believe that the combination of increased demand for personal space during the coronavirus crisis and mortgage rates at 50-year lows has contributed to the surge in home sales.”
Actively managed, ARKW is focused on and expected to benefit from shifting the 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.
“In our view, sales will continue to rise as digital platforms reduce the friction associated with buying and selling homes,” notes ARKW. “During the third quarter, for example, nearly two thirds of the home purchases on Zillow Offers closed digitally with an online notary. In our view, next generation real estate platforms like Zillow, Opendoor, and Redfin will continue to simplify the home buying and selling processes, adding significant liquidity to the real estate market during the next five to ten years.”
For more on disruptive technologies, visit our Disruptive Technology Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.