Here’s a Quick Look at ARKW’s Q3

By Chris Lange Published Oct 22, 9:40AM EDT

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Here’s a Quick Look at ARKW’s Q3 — © NicoElNino / iStock via Getty Images

Recent record highs in the S&P 500 and Dow Jones industrials have been very bullish for the equities in general. While the tech sector was beat up over the course of September, October has been a lot more favorable, especially with the start of the most recent earnings season. The worst may be over for tech now, with the rotation trade from growth to value in play currently. The short term may be unclear, but the mid to long term looks bullish.

ARK Invest funds have been selectively tech-heavy, which explains recent movement relative to interest rates. Taking into account recent moves by the Federal Reserve, these funds are headed for boom or bust. Year-over-year comparisons on a few of these funds suggest weakness. Right now, the question is where ARK Invest is going and if it can back it up.

Here, we are looking at ARK Next Generation Internet ETF (NASDAQ: ARKW). As it stands now, this fund underperformed the broad-based market indexes during the quarter. Some of its top detractors were Skillz Inc. (NYSE: SKLZ) and Roku Inc. (NASDAQ: ROKU | ROKU Price Prediction).
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According to the report:

While competition in the mobile gaming space hurt its earnings, we believe Skillz’s revenue growth has been impressive, highlighting its potential as a primary gaming ecosystem in which pro eSports players and enthusiasts engage with casual players in 1v1 competitions. Roku declined after reporting second quarter earnings because the reopening of the economy caused slower than expected user growth. ARK maintains high conviction that Roku is well-positioned to capitalize on the shift from linear TV to connected TVs and streaming.

Among the top contributors were Tesla Inc. (NASDAQ: TSLA) and Unity Software Inc. (NYSE: U).

Here’s the portfolio composition for ARKW:

Element	Exposure
Digital Media	18.0%
E-Commerce	16.1%
Cloud Computing	13.7%
Big Data & Machine Learning	12.1%
Blockchain & P2P	12.1%
Internet of Things	11.3%
Social Platforms	8.6%
Mobile	8.1%

Here are the top 10 holdings of the fund:

Company	Weight
TESLA	10.4%
GRAYSCALE BITCOIN TRUST BTC	5.5%
TWITTER	5.4%
COINBASE GLOBAL – CLASS A	5.2%
TELADOC HEALTH	4.9%
ROKU	4.4%
UNITY SOFTWARE	4.3%
SHOPIFY – CLASS A	4.0%
SQUARE – A	4.0%
SPOTIFY TECHNOLOGY	3.8%
Total	51.8%

The ETF recently closed at $155.54, within a 52-week range of $109.56 to $191.13. Over the past quarter, net asset value for the ETF dropped 9.9%, and the market price tracked practically the same. Year to date, the ETF is down 5.1%, and over the past year, it is up about 29.6%.

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Catherine Wood, the CEO and CIO of ARK Investment Management, is a minority and nonvoting shareholder of 24/7 Wall St., owner of a673b.bigscoots-temp.com.
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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.