If you are interested in investing in securities and growing your net worth, Exchange-Traded Funds (ETFs) are viable instruments to invest in. Let’s compare ARKK vs. ARKW and see which ETF is a better choice for you?
Emerging markets are common and sought-after asset classes many investors include as part of their investment portfolio. ETFs that focus on emerging markets can provide you with a good return on investment if you choose the suitable asset class for your invested funds.
Two very popular ETFs that are new to the scene are ARKK and ARKW. ARKK has earned consistent returns over the last five years to the tune of 38.41%, while ARKW has earned returns of 41.61%.
But which of these ETFs are the best? In the never-ending debate of ARKK vs. ARKW, which one should you go for if you were to pick one of the two? This review will attempt to provide clarity by reviewing both individually and comparatively.
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ARKK: ARK Innovation ETF
ARKK or ARK Innovation ETF is created by ARK Invest. The fund is essentially meant for investors with a long-term growth plan. ARKK is an actively managed fund with a minimum of 65% of its assets invested in foreign and domestic securities.
The fund is considered a disruptive innovation asset, and its creator, Cathie Woods, invests in tech securities that disrupt the tech space. If you wish to invest in tech startups with unique products that offer real value to one or more industries, ARKK is an asset that will provide you with such opportunities.
The technologies that ARKK invests in are primarily new products that can change how the world works. Among ARKK’s portfolio are services and products that offer technological improvements and scientific advancements in the following areas:
- Fintech Innovation
- Automation and Robotics
- Energy Storage
- Artificial Intelligence
- Next Generation Internet
- DNA Technologies and the Genomic Revolution
Let’s review ARKK’s top ten holdings to provide you with a clear picture of the assets contained in the portfolio.
ARKK’s top 10 holdings representing 54.19% of total assets:
|Teladoc Health Inc.||6.44%|
|Zoom Video Communications-A||6.42%|
|Coinbase Global Inc. Class A||5.19%|
|Exact Sciences Corp.||4.65%|
|Unity Software Inc.||4.47%|
|Spotify Technology SA||4.22%|
|UiPath Inc. Class A||4.05%|
|Intellia Therapeutics Inc.||4.03%|
ARKW: ARK Next Generation Internet ETF
Another ETF created by ARK Invest and is currently disrupting the finance market is ARKW or ARK Next Generation Internet ETF. This long-term asset seeks to invest in domestic and foreign securities that are Web 3.0 relevant.
ARKW equity securities primarily concentrate on businesses and companies, essentially internet service providers.
ARKW is actively managed, with managers investing about 80% of assets in companies that provide internet-related services. Investors looking for next-generation internet businesses will find ARKW an exciting proposition.
ARKW consists of equity securities, partnership interests, common stock, business trusts, and non-diversified stocks. At a closer look, you will notice that a significant percentage of ARKW stocks are technology infrastructures like cloud computing, online mobile products, payment methods, social distributive media, and other shared technology services and infrastructure.
You will find stocks of companies that are active in the following areas:
- Big Data
- Artificial Intelligence
- Cloud Computing
- Cyber Security
- Social Platforms
- Cyber Security
- Mobile Technology
Let’s review the top ten assets held by ARKW, representing 55.95% of all assets:
|Coinbase Global Inc. Class A||7.18%|
|Grayscale Bitcoin Trust BTC||6.54%|
|Zoom Video Communications-A||5.67%|
|Teladoc Health Inc.||5.32%|
|Spotify Technology SA||4.92%|
|Shopify Inc. Class A||3.75%|
ARKK Vs. ARKW: Key Differences
With so many similarities between ARKK and ARKW, what are the differences? As a first-time investor, you may have difficulty figuring out which fund to go for if you don’t know what differentiates them.
ARKK focuses on technologies that are mainly next-generation advancements. From artificial intelligence to cyber storage. It also has finance technology.
On the other hand, ARKW is interested primarily in e-commerce, cloud computing, and shared value platforms. But both ETFs have AI stocks.
ARKW was the first ETF to be created by ARK Invest before ARKK, but only by a month. ARKW was created and launched in September 2014, while ARKK was created and launched in October of the same year.
Furthermore, ARKK has a much larger net asset worth of $16.19 billion than ARKW’s $3.8 billion.
Then when it comes to their expense ratios, they charge different fees. ARKK has an expense ratio of 0.75%, while ARKW’S expense ratio is 0.83%.
As for their expense ratio, ARKK comes out on top since it costs 0.75%, which is below what ARKW managers charge investors.
So if you want to have an in-depth understanding of the assets you wish to invest in, you may have to review the top holdings of both ETFs to see what they contain and which one interests you.
ARKK Vs. ARKW: Composition Differences
To gain further clarity, review the data in the table to understand their differences.
|Segment||Global Total Market||Global Total Internet|
|Issuer||ARK Invest||ARK Invest|
|Net Asset||$16.19 billion||$3.8 billion|
ARKK Vs. ARKW: Performance Differences
Although ARKK and ARKW are both issued by ARK Invest, they have performed differently in the market. Since its inception, ARKW has outperformed ARKK with a return of 41.61% versus 38.41%.
ARKK Performance & Returns
ARKW Performance & Returns
ARKK Vs. ARKW: Fees
When deciding on the asset to go for, most investors pay very close attention to the fees they pay, and you should do the same. The expense fee is one major factor determining how much your investment will be worth in the end.
When comparing ARKK vs. ARKW expense fees, you will notice that ARKK has a lower fee (0.75%) than ARKW (0.83%). While the difference may not seem much on paper, it will amount to much in five or ten years or more. So if you are looking for a long-term investment asset, ARKK is a much better investment based on their expense fees alone.
ARKK Vs. ARKW: Frequently Asked Questions
Now that you know the similarities and differences between ARKK and ARKW, there are still questions in your mind. That’s why here are some questions that might help you to understand ARKK vs. ARKW better.
Is ARKK A Good ETF?
ARKK is a good ETF to invest in when looking for an asset with a positive track record. It is also a viable long-term investment instrument because it invests in relatively new technologies with incredible growth potential.
Are ARKK and ARKW The Same?
ARKK and ARKW are the same because they invest in disruptive technology stocks. Besides that, they are both ETFs issued by the same creator (ARK Invest). However, while ARKK focuses on global total stocks, ARKW contains internet-related stocks.
Which Is Better, ARKK Or ARKW?
ARKK appears to be the better ETF of the duo, but ARKW is not far behind. ARKW may have had a higher return over the last three years, but it has a higher expense fee, and it is not as diversified as ARKK.
ARKK Vs. ARKW – Which Is A Better Choice?
Due to the recent market volatility, choosing between ARKK and ARKW may be tricky. You have seen their past performance, fees, and net assets.
Now, we go back to the question this article wishes to answer for you, which one is the better choice? Which exchange-traded fund will outperform the other and provide you with the high yield and capital gains you are looking for?
Since you already know the pros and cons of these exchange trade products, the next step is to understand your personal finance. Knowing this will help complete the whole picture for your investment strategy.
Having the proper fund allocation in your portfolios is very important as this aligns with your portfolio’s diversification. You are already halfway there after reading through this article. The choice is yours, depending on investment objectives. We agree that these ETFs will help you with your investment plans and goals.
Good luck and enjoy the ride.
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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 Spark Nomad, a travel platform, and Radical FIRE, a personal finance 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.