ARK Fintech Innovation ETF: FinTech Could Be ARK's Biggest Avenue For Future Growth

Michael Remes profile picture
Michael Remes
662 Followers

Summary

  • The ARK family of actively managed ETFs has vastly outperformed for a long time.
  • FinTech provides a potential for huge growth as society shifts away from traditional financial platforms and products.
  • ARKF has outperformed compared to other FinTech ETFs and is positioned to continue to do so.
  • ARKF provides an attractive entry point into the ARK actively managed ETF world.

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Investment Thesis

All five of the actively managed ARK ETFs have performed at a torrid pace over the past year, with total returns ranging from 134.5% from the ARK Fintech Innovation ETF (NYSEARCA:ARKF) all the way up to the ARK Genomic Revolution ETF (ARKG) returning 210.1%. While I have been bullish on ARK since I was turned on to the family of funds, and have expressed that on Seeking Alpha previously in regards to ARKG both in September and again just this month, I feel that ARKF may provide the better opportunity based on current price and potential for thematic growth.

Source: Ycharts

In my last discussion of ARKG, I concluded that the high price now was making me hesitant to add large purchases and drive my cost basis per share up, making for an interesting battle between my sensibilities and my fear of missing out. In the case of ARKF, I don't need to have that battle to nearly the same degree because I see large amount of growth that is not yet reflected in the price. The growth potential in digital wallets and Bitcoin (BTC-USD) as an institutional investment are laying the groundwork, in my opinion, for a price explosion on par with, or greater than that of ARKG over the past 12 months. Of course, many things need to go right for this to happen, not least of which is the projections becoming reality and the fund managers being on point with both their investment choices and their timing. On the second point, I have little worry, as Cathie Wood and the ARK team don't seem to miss often. On the first point, I am less certain, but will refer to the expertise in the ARK team again and trust in that the track record they have amassed was not by luck.

This article was written by

Michael Remes profile picture
662 Followers
Fordham University - Gabelli School of Business, B.S. 2008 My investment strategy is driven by my goal of retiring early, before 50, and securely. To this end I am investing primarily in dividend growth equities and ETFs. It is my aim to share with you, the readers at Seeking Alpha, the thorough analysis that lives behind my investment choices and decisions. I am not a professional financial advisor, nor am I a full time investor earning a living off of my investments. I do not intend to offer advice, and strongly encourage every investor to perform their own due diligence.

Disclosure: I am/we are long ARKG, ARKF, AMZN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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