Need a more diversified portfolio as part of your investment strategy? This article will discuss an in-depth comparison of ARKK vs. ARKQ.
ARKK and ARKQ are two Exchange-Traded Funds (ETFs) created and issued by ARK Invest. ARK Invest is an asset management company that operates using an investment thesis that targets companies that create innovative products that transform how humans live and interact.
Their core investment philosophy focuses on robotics, artificial intelligence, DNA sequencing, blockchain, and energy storage businesses. ARK Invest also targets cloud computing, big data analytics, autonomous vehicles, and cryptocurrencies.
In addition, they also target companies that utilize the above mentioned technologies. So far, all the ETFs created by ARK Invest have shown promise, and two of the most subscribed of the lot are ARKK and ARKQ.
In this review, we will analyze both ARKK vs. ARKQ individually and collectively, and in the end, the choice will be yours to decide which of the two will be the ideal investment instrument for you.
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ARKK: ARK Innovation ETF
ARKK or ARK Innovation ETF is created by ARK Invest. This fund seeks to track assets with long-term growth potential. Overall, the fund invests about 65% of its assets on securities traded in the US stock market and foreign countries.
The core focus of ARKK is disruptive innovation. The theory of disruptive innovation simply means that any new product or service that will change the way things are done is a viable investment opportunity. So ARKK invests in companies that offer new technology or are in the process of developing one that will have a long-lasting effect on the world.
ARKK investment managers also seek out assets by companies that improve scientific and technological processes.
Since September 2014, when ARKK was launched, it has done quite well and helped investors increase their earnings. Also, its top ten holdings represent a little over half of its total assets.
ARKK’s top ten holdings represent 54.16% of all assets.
| Asset | Percentage |
| Tesla Inc. | 8.16% |
| Teladoc Health Inc. | 6.51% |
| Zoom Video Communications-A | 6.51% |
| Roku Inc. | 6.21% |
| Coinbase Global Inc. Class A | 5.26% |
| Unity Software Inc. | 4.56% |
| Exact Sciences Corp. | 4.55% |
| Spotify Technology SA | 4.34% |
| UiPath Inc. Class A | 4.09% |
| Twilio Inc. – A | 3.97% |
ARKQ: ARK Autonomous Technology & Robotics ETF
ARKQ or ARK Autonomous Technology & Robotics ETF is another ETF created and managed by ARK Invest. Just like ARKK, ARKQ tracks assets with long-term growth potential.
ARKQ invests in the US and foreign assets with technological innovation themes.
But unlike ARKK, ARKQ focuses more on companies in the information technology industry. At least 80% of all funds are invested in this industry. If you browse through the holdings, you will find a significant percentage of securities by companies into artificial intelligence, robotics, and autonomous technologies.
The same disruptive innovation themes present in other ARK Invest securities are present in ARKQ. The overall goal of fund managers is to track companies that develop new technology or are in the process of doing so.
As an investor, you stand to reap significant financial rewards when you invest in ARKQ because the fund buys stocks cheap from emerging companies. You stand to enjoy a significant value increase if you hold the ETF.
ARKQ’s top ten holdings represent 56.61% of all assets.
| Asset | Percentage |
| Tesla Inc. | 10.45% |
| UiPath Inc. Class A | 8.01% |
| Kratos Defense & Security | 7.38% |
| Trimble Inc. | 7.31% |
| Iridium Communications Inc. | 5.00% |
| Komatsu Ltd. | 4.66% |
| Deere & Co. | 4.16% |
| 3D Systems Corp. | 3.42% |
| Unity Software Inc. | 3.31% |
| Aerovironment Inc. | 2.91% |
ARKK Vs. ARKQ: Key Differences
Many investors like yourself, having reviewed ARKK vs. ARKQ, will then ask themselves which one they should go for. To make the right decision, you need to understand the key differences between ARKK and ARKQ. Although they track and invest in disruptive technology companies, they still have differences that set them apart.
ARKK invests in companies across different sectors in the technology value chain. That means you will find stocks from different industries. However, ARKQ is far more limited, with most of its robotics and autonomous technologies stock. ARKQ also invests in financial technology companies.
In a nutshell, ARKK invests in the following:
- DNA Technologies and the Genomic Revolution
- Automation, Robotics, and Energy Storage
- Next-Generation Internet
- Fintech Innovation
And a host of other industries. So as you can see, ARKK is a diverse ETF.
ARKQ, on the other hand, is far more limited in terms of reach. ARKQ invests in disruptive technology companies in the following areas:
- Autonomous Transportation
- Energy Storage
- Robotics and Automation
- 3D Printing
- Space Exploration
To simplify their differences, see the table below for a breakdown.
| Categories | ARKK | ARKQ |
| Autonomous Vehicles | 2.7% | 37.5% |
| 3D Printing | 1.2% | 15.3% |
| Robotics | 3.9% | 18.6% |
| Energy Storage | 2.6% | 15.6% |
| Space Exploration | 1.5% | 7.3% |
| Infrastructure Development | 1.6% | 5.4% |
| Innovative Materials | – | 0.1% |
| Alternative Energy | – | – |
| E-commerce | 7.4% | – |
| Digital Media | 12.0% | – |
| Cloud Computing | 15.0% | – |
| Genomics | 6.7% | – |
| Big Data | 5.3% | – |
| Mobile Technology | 5.0% | – |
| Internet Technology | 4.8% | – |
| Molecular Diagnosis | 4.0% | – |
| Bioinformatics | 4.7% | – |
| DNA Technology | 2.2% | – |
| Targeted Therapeutics | 1.6% | – |
| Instrumentation | 2.3% | – |
| Advanced Oncology | 4.3% | – |
| Social Platforms | 2.6% | – |
| Blockchain and P2P Technology | 5.0% | – |
As you can see from the above, ARKQ invests a whopping 40% of its funds on autonomous vehicle technology alone. You will also notice that ARKK is more diverse since it has investments in more industries than ARKQ.
So while both are not index funds, they track stocks in the disruptive innovation category, but ARKK tracks far more industries than ARKQ.
ARKK Vs. ARKQ: Composition Differences
Another way to differentiate ARKK vs. ARKQ is to compare them side by side beyond the assets that they track and invest in.
Over the last five years, ARKK has posted a higher return (38.41%) compared to ARKQ (30.17%). But they have the same expense ratio of 0.75%. We compare both below.
| ARKK | ARKQ | |
| Type | ETF | ETF |
| Segment | Total Global Market | Total Global Technology |
| Issuer | ARK Invest | ARK Invest |
| Net Asset | $16.19 billion | $2.15 billion |
| Expense ratio | 0.75% | 0.75% |
| Management | Active | Active |
| Dividend Yield | 0.00% | 0.00% |
ARKK Vs. ARKQ: Performance Differences
How do both ETFs perform against each other? Their performance data below will give us a clear idea.
ARKK Performance & Returns
| Performance | Returns |
| YTD Returns | -23.36% |
| 1-Month Return | -9.81% |
| 3-Month Return | -13.71% |
| 1-Year Return | -23.36% |
| 3-Year Return | 37.81% |
| 5-Year Return | 38.41% |
| 10-Year Return |
ARKQ Performance & Returns
| Performance | Returns |
| YTD Returns | 1.90% |
| 1-Month Return | -5.55% |
| 3-Month Return | -0.57% |
| 1-Year Return | 1.90% |
| 3-Year Return | 38.43% |
| 5-Year Return | 30.17% |
| 10-Year Return |
ARKK Vs. ARKQ: Fees
ARKK vs. ARKQ have similar fees. So if you are looking to make a decision based on this alone, you will have a hard time deciding. Both ARKK and ARKQ have the same expense ratio fees of 0.75%.
Paying close attention to the expense fee is important. On the surface, a 1% fee may seem like a small amount, but over a decade, it may accumulate and cost you a significant percentage of your earnings.
ARKK Vs. ARKQ: Frequently Asked Questions
Here are some questions that might help you decide which one suits your investment needs.
Is ARKQ A Good ETF?
That will depend on the investment habits of the investor. If you are a conservative investor with an eye for blue-chip stocks in the technology space with disruptive attributes, ARKQ is a good ETF to invest in.
You get to buy and hold the stocks in the portfolio while you watch them appreciate over time. Rather than invest in solid companies with a track record of consistency that has almost reached their growth threshold, investors can buy ARKQ at a cheaper rate but with a higher growth ceiling.
Are ARKK And ARKQ The Same?
ARKK and ARKQ are ETFs issued by ARK Invest. They track and invest in disruptive technology companies and have the same 0.75% expense ratios. In this regard, they are the same. However, ARKK tracks and invests in far more diverse industries than ARKQ.
ARKK Vs. ARKQ: Which Ark ETF Is Better?
Now that you have learned and understood the ins and outs of ARKK and ARKQ, which one should you choose in the ETF investing part of your portfolio? As you want to diversify your investment portfolio, having the right allocation in your ETF trading is an important aspect to boost your personal finance. But which one do you choose?
It all boils down to which actively managed ETFs align with your current goals and finances. Diversification is one thing, but having the right financial capability and investment goals will help you make the right choice between the two.
ARKK is more diversified and invests in different innovation sectors than ARKQ, with a minimal reach. And these ETFs are more focused on the very risky innovation industry.
Again, the choice will always be yours as you are already equipped with the pros and cons of these ETFs. The important thing to remember is that investing will play a big part in your journey to financial freedom. So gear up and start and enhance your investment journey now.
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Founder of Spark Nomad, Radical FIRE, Journalist
Expertise: Personal finance and travel content
Education: Bachelor of Economics at Radboud University, Master in Finance at Radboud University, Minor in Economics at Chapman University.
Over 200 articles, essays, and short stories published across the web.
Experience: Marjolein Dilven is a journalist and founder of Radical FIRE, a personal finance platform, and Spark Nomad, a travel platform. Marjolein has a finance and economics background with a master’s in Finance. She has quit her job to travel the world, documenting her travels on Spark Nomad to help people plan their travels. Marjolein Dilven has written for publications like MSN, Associated Press, CNBC, Town News syndicate, and more.