Ark Next Generation Internet ETF vs. Ark Innovation ETF: which one is best for you? | The Motley Fool

Cathie Wood’s Ark Invest offers investors several exchange-traded funds (ETFs), generally focused on the latest technological trends – artificial intelligence (AI), robotics, and cloud computing, among others. They are all unique in the sense that they are not index funds. Unlike most ETFs, these are actively managed funds with the overall objective of beating the benchmark index over time.

Two of the most popular are One share of the Ark Innovation ETF (SHEET 1.73%) and Next payment for shares of Ark Next Generation Internet ETF (ARKW 1.19%). Although both are focused on technology and even have a great deal of overlap in terms of peak retention, there are important differences to know before making a decision.

Similarities between these two Ark ETFs

Before we get into what makes these currencies, let’s discuss what they have in common.

• As mentioned, they are both actively managed ETFs, meaning that the fund manager selects stocks with the aim of beating the market. In this case, the two ETFs have the same manager: the famous technical investor Cathie Wood.
• Both are compact, targeting 35-55 possessions at any given time. Each fund’s top 10 holdings comprise 60% of its total assets.
• There is some overlap among the top properties. Tesla, The year, Coinbase, Block, Roblox, Palantir, UiPathand Robinhood all appear in the top 10 of both currencies.

Important differences to keep in mind

With the similarities out of the way, let’s talk about the differences between these two ETFs.

The main difference is the investment objectives of each ETF. On the other hand, the Ark Innovation ETF has a broader focus of the two, aiming to invest in companies engaged in “disruptive innovation.” On the other hand, the Ark Next Generation Internet ETF also focuses on disruptors, but with an Internet focus. This includes cloud infrastructure, mobile internet, online and mobile payments, AI, Internet of Things, and more.

This explains the combination of the highest wealth. After all, everything that I have just described as an Internet disruptor also falls under the field of disruptive innovation. But we can also look at the highest holdings don’t do it they share to feel their differences.

The top asset of the Ark Next Generation Internet ETF is a Bitcoin ETF (internet-based payments). It also has shares Meta Platforms (social media), which is a clear distraction from the Internet’s focus.

Alternatively, the Ark Innovation ETF owns a genetic company CRISPR Therapeutics Top 10, as it is a disruptive healthcare innovator that is obviously not an internet technology play. Shopify It’s a top 10 that only appears on the Ark Innovation list. Beyond the top 10, however, we find significant exposure to non-internet sites:

• Correct treatment (12% of assets)
• Independent movement (12.1%)
• Programmatic Biology (2.6%)
• Adaptive robots (2.1%)

There is also a difference in cost. The Ark Innovation ETF has a 0.75% fee, which means for every $1,000 in assets, there will be a $7.50 annual management fee. (Note: The expense ratio is not money you’re physically paying; it will only be reflected in your stock performance.)

On the other hand, the Ark Next Generation Internet ETF has an expense ratio of 0.88. To be fair, this makes sense. Generally, the more specialized an ETF is, the higher its cost. But be aware of the difference and that this seemingly small price difference can make a big difference to your returns over time.

Which is better for you?

There’s no clear winner here If you simply believe in Cathie Wood’s ability to find breakthrough winners, the Ark Innovation ETF, with its low fees and wide pool of companies to choose from, could be your best bet. However, if you want to invest in the next phase of Internet innovation individually, the Ark Next Generation Internet ETF could be a great addition to your portfolio.