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ARK Genomic Revolution ETF: Value Realization Will Take Time

Mercury Research profile picture
Mercury Research


  • ARKG’s Sharpe Ratio and outperformance suggest great stock-picking by the fund manager.
  • However, the neutral rating is premised on a long-term time horizon for value realization in view of ARKG’s rich valuation.
  • Furthermore, the general market is not unequivocally rising, and entering into higher-volatility ETFs at this stage with rich valuations may not be prudent.
  • There also appears to be greater attention focused on “old economy” stocks as markets look forward to a post-pandemic recovery story.

Abstract luminous DNA molecule. Genetic and gene manipulation concept. Cut of replacing part of a DNA molecule. Medicine. Innovative in science. Medical science and biotechnology.
Photo by ipopba/iStock via Getty Images


The BATS:ARKG ETF is a sub-sector of the healthcare industry, focusing on advanced biotechnology stocks such as gene editing and artificial intelligence-based companies. The company invests at least 80% of its assets in this sector

This article was written by

Mercury Research profile picture
Mercury Research has tracked the financial markets through several cycles, with prior experience in multi-asset funds’ strategies. The core methods focus on extracting value through fundamental analysis, technical analysis and macro financial markets indicators. These skills are applied across multiple strategy styles and markets with absolute return targets. Formally trained PhD in economics and finance.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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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Comments (15)

I think the problem is arkk is getting to hyped shes a good investor tho
cccraig20 profile picture
I hold 60K of ARKG. I BELIEVE to sell now makes the alternative of holding for 2 more years without selling my best alternative to make and not loose money. So no more tech for me. Put 300 K in Sp 500 equal Weight RSP so I can adopt a ignore it strategy for the next 2 years. I like COPX etf for copper best now. Geez. Holding on was my biggest mistake in investing.
SeriousUsername profile picture
"genomic revolution etf" top holding is zoom for doctors lmao.
Swich Research profile picture
What are your thoughts on why the ARK team never comment on their holdings of Surface Oncology? They are now the majority shareholder in SURF after adding another 500k shares last quarter yet they are zero references to the company anywhere in their research.
cccraig20 profile picture
@Swich Research extremely good question. I want the answer as well
I made a lot of money on the back of Cathy Wood the past few years, but there’s too much exuberance in her ETFs right now. Better to wait for investor sentiment to change.
bbob68 profile picture
Similar to Blah64 I went long a little over a year ago because I wanted to be in the space but knew I needed someone to steer the the ship.......so far working out well....
cccraig20 profile picture
@bbob68 me too
I bought it cause I don't know jack about biotech and figured it would be similar to the other etf ibb.
@blah64 largest bio ETF
Agreed on all points. Where do you see this industry in 10 years? I expect ARKG to be 20x in that time frame. Realistic?
@1st1 20x from entry today? The author is correct, valuations are high. Perhaps after a correction I would have that expectation.
Mercury Research profile picture
@1st1 20x is rather ambitious. Long read sequencing will be more affordable by 2023, and that's when we should see it being commercialized on a larger scale. The proof is in the pudding.
cccraig20 profile picture
@1st1 yes. The fun begins in 2024 when some strong gene products come to the world market.
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