The ARK Innovation ETF (NYSEArca: ARKK) isn’t just the largest actively managed equity ETF, its 10.64% weight to Tesla is among the biggest among all ETFs. These days, that’s a favorable trait to have.
“Companies within ARKK include those that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the areas of DNA technologies (‘’Genomic Revolution’), industrial innovation in energy, automation, and manufacturing (‘Industrial Innovation’), the increased use of shared technology, infrastructure and services (‘’Next Generation Internet’), and technologies that make financial services more efficient (‘Fintech Innovation’),” according to ARK Invest.
More importantly, there are positive, long-term implications for investors considering ARKK as a Tesla proxy.
“Select Tesla Model S sedans have achieved a 400-mile range rating from the Environmental Protection Agency,” reports Al Root for Barron’s. “It is an impressive feat, even if investors don’t know what it means for the stock and the electric-vehicle industry.”
EV, Tesla Talk
Global automotive industry observers believe electric vehicles will reach comparable price points to traditional internal combustion engine vehicles sometime in the next several years, making it more compelling for drivers to make the switch to electric vehicles. Vital to increased adoption of EVs is increased driving ranges and charging capacity.
“The better existing EVs get, and the longer they travel on one charge, the closer Tesla, and its EV peers will come to eliminating concerns about the cars’ range. Improved battery technology also has the potential to lower costs relative to gasoline-powered cars,” according to Barron’s.
The automotive industry is constantly innovating whether it’s the rise of electric vehicles, autonomous self-driving transportation, and organizational initiatives to drive more innovation in the sector. ARKK enables investors to access high growth potential through companies critical to the development of autonomous and electric vehicles – a potentially transformative economic innovation.
For Tesla and potentially ARKK, the increased range is important.
“This significant achievement reflects Tesla’s obsession with efficiency and energy frugality and is realized through several changes, both iterative and transformational, in core hardware and system architecture development by the Tesla engineering, design and production teams,” according to Tesla. “These changes went into production earlier this year when we first started manufacturing Model S Long Range Plus at our factory in Fremont, California. All Model S Long Range Plus vehicles will receive the new 402-mile rating.”
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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.