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The Ark Innovation ETF (ARKK) is up 35% so far this year, but is down 17% from recent highs.
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The Goldman Sachs Future Tech Leaders Equity ETF (GTEK) focuses on technology companies with a market capitalization of less than $100 billion with a weighted average of $72.4 billion.
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Both ETFs charge expense ratios of 0.75% and use active management strategies.
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Nothing against him Ark Innovation ETF (ARKK), which is having a glorious year, is now up over 35% year to date and over 78% over the past two years. Without a doubt, this current environment has been very favorable for disruptive innovators, including those who are not yet making big profits.
While there have been subtle cracks in the growth trade in recent weeks, with the Nasdaq 100 slipping a bit from its peak, thanks in part to pronounced weakness in some of the high-fliers that have flown a little closer to the ground lately, I still think the disruptive innovation and growth themes are worth pursuing over the next two to three years.
Now, that doesn’t mean we won’t face more turbulence and maybe a few scares here and there, but I do think the long-term trend seems to be a great friend to growth names, especially those with more than their fair share of exposure to AI. As things stand today, shares of the Ark Innovation ETF are down about 17% from their recent highs.
While Ark Invest’s Cathie Wood makes the most of the recent pullback by adding positions in some of her favorite names, I think shares of the Ark Innovation ETF could be a smart buy at around $76 per share, a level where I see pretty solid support. That said, there is one active tech ETF that I think might also deserve careful consideration on the way down.
Although the Ark Innovation ETF stands out as “higher growth,” with more explosive upside potential, the stock is also more volatile, with a beta of 2.41, suggesting a much more turbulent ride than the S&P, especially when the market faces a minor growth scare. Whether it’s too early to be a buyer of such a hot innovation ETF remains up for debate. If we’re in the early stages of an AI decline, I’d personally be more inclined to go with an ETF like the Goldman Sachs Future Tech Leaders Stock ETF (NYSEARCA:GTEK) despite the recent relatively poor performance of Ark’s flagship fund.