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ARKQ vs ARKK: Which ARK Invest ETF Is Better?

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In this article, we’ll compare ARKQ vs ARKK:

ARK Autonomous Technology & Robotics ETF (ARKQ) vs ARK Innovation ETF (ARKK).

Both Exchange Traded Funds (ETFs) are popular investments for different reasons.

This article will help you decide between ARKQ vs ARKK.

ARKQ vs ARKK Graphic

 

ARKQ vs ARKK

The primary difference between ARKQ and ARKK is the fund’s investment goals.  ARKQ has an investment goal to track autonomous technology and robotics companies.  ARKK has an investment goal to track disruptive innovation.

They have the same expense ratio.  ARKK has an expense ratio of 0.75%, and ARKQ has the same expense ratio of 0.75%.

This makes both ARKQ and ARKK expensive ETFs for investors.  Investors can expect actively managed funds to be more expensive than passively managed funds.

This is ARKQ and ARKK holdings side by side:

ARKQ vs ARKK Holdings

Both ETFs have a significant amount of Tesla.  ARKQ also has more UiPath compared to ARKK.

Both ARKK and ARKQ are actively managed.  This means ARK Invest has fund managers actively seeking to beat the market with these funds.

This means that a fund manager (Cathie Wood) at ARK Invest is actively trying to beat the market.

ARKQ

  • Actively Managed Fund
  • Expense Ratio: 0.75%
  • Offered By ARK Invest
  • Holds 30 – 50 Stocks

ARKK

  • Actively Managed Fund
  • Expense Ratio 0.75%
  • Offered By ARK Invest
  • Holds Between 35 – 55 Stocks

 

ARKQ vs ARKK Performance

ARKQ and ARKK have had similar performances over the last 5 years.  However, ARKQ is beating ARKK by 0.54% annually.

Over the last 3 years, ARKQ has been significantly beating ARKK by 13.09% per year.

Performance Comparison:

ARKQ vs ARKK Performance

As you can see from the chart, ARKQ slightly outperforms ARKK over the longer term.

In the short term, both ETFs have been volatile.

Similarities Between ARKQ and ARKK:

  • Both Are Exchange-Traded Funds (ETFs)
  • ARK Invest Funds
  • Similar Performance Over The Last 5 Years
  • Both Focus On Growth Companies
  • Actively Managed ETFs
  • Similar Number Of Holdings

 

ARKK and ARKQ Differences

The main difference between ARKK and ARKQ is how the fund is managed.  ARKK seeks to track companies with disruptive innovation.  ARKQ has an investment goal to track autonomous technology and robotics companies.

Their performance is also different, with ARKQ outperforming ARKK by 13.09% annually over the last 3 years.

ARKQ vs ARKK Comparison Chart

Lastly, ARKK has more net assets with $12 billion compared to 1.6 billion with ARKQ.

Differences Between ARKK and ARKQ:

  • Investing Goals Of The Fund (Disruptive Innovation vs Robotics)
  • Net Assets
  • Performance Returns (ARKQ Performed Better Long Term)

 

ARKQ Profile

  • Fund Inception: 2014
  • Expense Ratio: 0.75%
  • Number Of Stocks: 30 to 50
  • Top 10 Holdings: 57%

ARK Autonomous Tech. & Robotics ETF (ARKQ) is an actively managed ETF that looks for performance returns from companies in the autonomous technology and robotics industry.

They define this as companies that will benefit from the shift to new technologies such as Autonomous Transportation, Robotics and Automation, 3D Printing, Energy Storage, and Space Exploration.

The fund has $1.6 billion in assets under management.

 

ARKQ Performance

The chart below is the returns for ARKQ:

ARKQ Performance Chart

You can see that ARKQ has underperformed over the last year.

However, be mindful that this does not guarantee that these returns will continue to look the same over the long term.

 

ARKQ Holdings

Here are the top 10 holdings for ARK Autonomous Tech. & Robotics ETF (ARKQ):

ARKQ Holdings

The fund has $1.6 billion in total net assets.

ARKQ is largely made up of Tesla, Kratos Defense, Trimble, UiPath, and AeroVironment.  In addition, ARKQ provides exposure to over 30 stocks.

However, with the top 10 holdings making up more than 50% of the portfolio, it isn’t very diversified compared to other ETFs such as Vanguard Total Stock Market Index Fund ETF (VTI).

 

ARKK Profile

  • Fund Inception: 2014
  • Expense Ratio: 0.75%
  • Number Of Stocks: 35 – 55
  • Actively Managed

ARK Innovation ETF (ARKK) is an actively managed ETF that looks for performance returns from companies with disruptive innovation.

They define disruptive innovation as new technology that changes the way the world works.

The fund has $12 billion in assets under management.

ARKK was created in 2014 and currently has an expense ratio of 0.75%.  This makes ARKK an expensive ETF compared to similar ETFs like Vanguards VGT.

Example:

Here is what a 0.65% fee (difference between ARKK and VGT) will cost over 30 years.  Assuming you start with an initial investment of $100,000 and contribute $10,000 each year, over 30 years.

You will have $500,000 less in your account.

This does not include costs to buy and sell your shares.

 

ARKK Performance

ARK Invest’s ARKK has underperformed over the last year with a return of -50%.

ARKK Performance Chart

While ARKK has a negative 50% return, the S&P 500 has a positive return of 18%.

 

ARKK Holdings

ARKK Top Holdings

ARKK’s top 10 holdings include Tesla, Teladoc, Roku, Zoom, and Coinbase.  The ETF invests in companies that are in high-growth technology.

The top 10 holdings make up over 50% of the portfolio which means you can expect higher volatility with ARKK compared to more diversified funds like Vanguard Total Stock Market Index Fund ETF (VTI).

 

How To Invest In ARKK and ARKQ

The easiest way to invest in ARKK and ARKQ commission-free is with M1 Finance(Use this link for $50 when you open a new account)

M1 Finance gives you the option to invest in both options completely free.  As we saw in our earlier example, this is important because fees can affect long-term returns.

You can still invest in ARKK and ARKQ using other platforms, but there will likely be a charge when buying and selling shares.

I like M1 Finance as the best option because it gives you the flexibility to purchase ARKK, ARKQ, and thousands of other stocks.

M1 Finance also lets you purchase fractional shares.

This is great for buying stocks or ETFs with high share prices.

 

Which Is Better ARKK or ARKQ?

ARKK and ARKQ are similar investments.  They have had the same expense ratio (0.75%) and similar performance returns (25%) over the last 5 years.

Both ARKK and ARKQ have performed poorly compared to similar low-cost ETFs.

If I have to choose between ARKQ vs ARKK, I would slightly edge ARKK because it has more assets under management.

However, I would never invest in ARK funds because I prefer passively managed, low-cost ETFs with strong performance history.

Some examples of passively managed, low-cost growth ETFs are:

Vanguard’s VUG offers many of the same features as ARKK but at a much lower expense ratio of 0.04%.

I prefer VUG because of the lower expense ratio out of these funds.

Investors in ETFs like VUG or VGT have had better returns at a lower cost!

This would suggest that passive management is better than actively managed funds.

Keep in mind past performance does not predict future returns.

I would choose VGT, VUG, or MGK over ARKK or ARKQ, and I would purchase the shares commission-free using M1 Finance.  (Use this link for $50 when you open a new account)

That way, I keep my costs as low as possible.

Related Posts:

 

Is ARKQ or ARKK Better for Financial Independence?

The FIRE community keeps investment costs low, and we are a big fan of Vanguard.  However, ARKQ and ARKK are both ARK Invest ETFs with high expense ratios.

Therefore, I would not consider these ETFs for financial independence.

Here are more ETFs I would prefer with low expense ratios and similar performances:

They all have similar returns and are at a lower cost compared to ARKK and ARKQ.

Also, if financial independence is your goal, I would suggest looking into other funds that give you more diversification, like VTSAX.

 

My Winner: Neither

I wouldn’t call ARKK or ARKQ winners.  They have both underperformed compared to passively managed index funds.

They are also as much as 7 times more expensive compared to similar ETFs.

I always lean towards keeping costs as low as possible, so ARKK or ARKQ would not be in my portfolios.

I prefer passively managed ETFs like the ones offered from Vanguard or Fidelity.

Remember: Returns Are Not Guaranteed, But Fees Are!

If you like ETF comparisons like these, check out more in our related posts below.

 


Disclaimer
This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!

This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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