Weakness in ARK Fintech Innovation ETF's People and Process Pillar ratings limits this strategy to a Morningstar Medalist Rating of Negative. The portfolio maintains a sizable cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy’s management team earns a Below Average People Pillar rating. The strategy gets a Below Average Process Pillar rating.  High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's parent organization earns the firm a Below Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Coinbase

Block

Shopify

DraftKings

UiPath

Robinhood

Toast

SoFi Technologies

Global-e Online Ltd

Roku

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. ARK Fintech Innovation ETF earns a Below Average Process Pillar rating. 

The process is strengthened by the firm's five-year retention rate of 100% over the period. However, the rating is held back by the parent firm's five-year risk-adjusted success ratio of 0%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's relatively low success ratio suggests that the firm could do better across its fund lineup. Subpar risk-adjusted performance also holds the process back. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

 This strategy leans toward smaller, higher-growth companies compared with its average peer in the Technology Morningstar Category. Looking at additional factor exposure, the fund has held stocks with higher trading volumes compared to Morningstar Category Peers in the past few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also favored low-quality stocks. This means the fund avoids holding companies that are consistently profitable, growing, and have solid balance sheets. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. This orientation tends to pay off most prominently when markets are hot. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in financial services and consumer cyclical relative to the category average by 24.2 and 10.7 percentage points, respectively. The sectors with low exposure compared to category peers are technology and industrials, underweight the average by 34.7 and 2.9 percentage points of assets, respectively. The portfolio is positioned across 32 holdings and is relatively concentrated. In particular, 62.6% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 52.3% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 26% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Below Average

Process

ARK Fintech Innovation ETF's sole listed portfolio manager has not yet proven themself effective at running the strategy, leading to a Below Average People Pillar rating. With only one listed portfolio manager, the strategy leaves itself vulnerable to key-person risk. This is concerning as a strategy's team size and management stability contribute significantly toward the People Pillar rating.  Catherine D. Wood brings over 23 years of portfolio management experience to the table. However, the risk-adjusted performance of the strategies they manage has been weak, averaging a 1.2-star Morningstar Rating. Isolating the analysis to the fund at hand, Catherine Wood has delivered inferior performance, lagging both the category benchmark and average peer over the past five-year period. Catherine Wood has made a personal investment of between $100,000 and $500,000 in the fund, a positive contributor to the rating. This effort demonstrates action toward aligning interests with shareholders by investing alongside them.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

ARK Investment Management is a thematic-investing specialist that has done little to mitigate the significant risks borne by its clients. It earns a downgrade of its Parent rating to Below Average from Average.

ARK's main draw is its founder, chief executive officer, and sole portfolio manager Cathie Wood, who since launching the firm in 2014 has presided over its tremendous growth in recent years while establishing a broad media presence and enthusiastic following. Despite horrendous results across its lineup of six actively managed exchange-traded funds over the past 12 months, the firm has shown remarkable asset retention but little inclination to prevent future implosions. It had roughly $55 billion in assets under management as of March 2022.

The firm's risk-management resources are below industry standards. Its assets are mostly (if not entirely) tied to nondiversified portfolios that make huge industry bets, embrace stocks with high volatility, and are highly correlated to one another. The firm has no risk-management professionals to either define risk tolerance, monitor exposures, or foresee possible downsides.

It has in place a poor succession plan for 66-year-old Wood, the firm's majority owner and lone portfolio manager. Her would-be successor's 15 years of industry experience include none as a portfolio manager. Dovetailing with that key-person risk is the firm's inability to develop and retain talent on the analyst team.

The firm has been shareholder-friendly in some ways. Its ETFs are cost competitive relative to actively managed rivals, and Wood personally invests in them, which helps align interests.
But overall, the firm's stewardship falls short. A capability to manage its myriad risks and a culture that fosters career growth within the research team would do more.

Parent

ARK Fintech Innovation ETF

ARKF is an actively managed fund of stocks related to financial technology innovation.

The coronavirus pandemic is spurring adoption of an array of disruptive technologies that were, well, already disrupting prior to COVID-19 becoming part of our daily lives. What Happened: Count fintech as one theme that was already on an impressive upward trajectory that's getting an assist from changing habits due to the virus.

Pandemic Made This Fintech ETF Fabulous. The Phenomenon Will Continue.

Fintech innovation is a significant trend this decade that is starting to gain traction. Digital payments are leading the way, but other fintech products will likely also gain traction. Consumers are moving towards digital banking - Using digital payments, a digital wallet/app, a digital bank product (loan, etc.), and a digital/online bank (neobanks). These innovations may disrupt the banking system.

Accumulate The Ark Fintech Innovation ETF 'ARKF'

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Returns in the space have been eye-popping.

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One of the big themes underpinning the fintech boom is the emergence of digital wallets. The ARK Fintech Innovation ETF (NYSEARCA: ARKF) is one of the exchange traded funds most responsive to that trend.

Your Wallet, On Your Phone: Digital Wallets Send the ARKF ETF Soaring

ARK Genomic Revolution Multi-Sector ETF

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We have presented a bunch of top-performing ETFs from various corners of the market that gained in triple digits from a year-to-date look and will likely continue outperforming, should the trends prevail.

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Cashless payments, cryptocurrencies, and digital wallets are among the catalysts propelling stocks such as PayPal and and Square (NYSE: SQ). The Fintech Innovation ETF (NYSEARCA: ARKF) is profiting too.

The ARKF ETF: Fintech's Cashless King

General Motors

Global X Video Games & Esports ETF 

As United States employment numbers show improved figures for October, here are three hot stocks that could head higher in November. The post 3 Hot Stocks to Buy As Unemployment Fears Ease appeared first on InvestorPlace.

3 Hot Stocks to Buy As Unemployment Fears Ease

Fintech stocks are scorching hot this year and Square (NYSE: SQ) is leading the charge. That's good news for the ARK Fintech Innovation ETF (NYSEARCA: ARKF), the exchange traded fund with the largest weight to the stock.

Bitcoin and Square Teaming Up to Supercharge Fintech ETFs

In the lexicon of disruptive technologies, fintech is just getting started, indicating there's still attractive long-term growth prospects with the ARK Fintech Innovation ETF (NYSEARCA: ARKF). ARKF member firms are companies that are powered by innovations and are working to disintermediate or bypass the current financial markets and challenge traditional institutions by offering new solutions [.

Fintech and Their ETFs Ready to Decimate the Finance Industry

The ARK Fintech Innovation ETF (NYSEARCA: ARKF) is a prime example of an exchange traded fund that's not short for growth catalysts, but it's got another one as more companies and investors embrace digital currencies. ARKF invests in equity securities of companies that ARK believes are shifting financial services and economic transactions to technology infrastructure [.

Crypto's Going to Be Huge for Fintech ETFs

Invitae

Investors love disruptive themes and innovation stocks. Some of those assets are already delivering massive gains to investors.

3 Innovative Stocks to Buy That Are Doing Incredible Things

It's been a sensational year for an ETF active manager known for contrarian conviction.

Ark ETFs Defying Gravity

Alibaba

PayPal

Several of the strong performing Ark ETFS from Cathie Wood bought shares of two underperforming stocks on Tuesday.  What Happened: Shares of Alibaba Group Holding (NYSE: BABA) were down 8% Tuesday after the Ant Group IPO was pulled in China.

Cathie Wood Sells Tesla Shares To Buy The Dips In Alibaba, Paypal

The pandemic has greatly accelerated the digital transformation of commerce and the shift towards cashless transactions. Digital payments offer multiple advantages to consumers, businesses, and governments. Further exponential growth lies ahead.

Invest In The Growth Of Digital Payments With ARKF

Just as e-commerce is disrupting the concept of brick-and-mortar retail stores, fintech is doing the same with the antiquated notion of bank branches. That's a longer-ranging theme that holds positive implications for assets such as the ARK Fintech Innovation ETF (NYSEARCA: ARKF).

Pain Coming for Bank Branches, Relief for This Fintech ETF

I recently discovered Cathie Wood and ARK Invest and have come away very impressed with their ETFs.

ARK Invest: The Best High-Growth ETFs That I'm Aware Of

Digitization is disrupting myriad industries, including traditional financial services, opening doors to lucrative opportunities with assets such as the ARK Fintech Innovation ETF (NYSEARCA: ARKF). Whether it's lending, payroll or cashless payments, ARKF components are at the center of a groundswell that's dramatically altering the financial services landscapes, leaving many old guard institutions in the [.

Digitization Disrupting Old Banks and Benefiting Fintech Names

The rise of cashless payments and e-commerce are among the factors driving the ARK Fintech Innovation ETF (NYSEARCA: ARKF) higher this year, but fintech names, including some ARKF components, are increasingly prominent lenders. Fintech loan growth adds another layer to the ARKF proposition, one that adds to the thesis that fintech companies are willing and [.

Lending Becomes Credible Fintech Catalyst

Among thematic exchange traded funds, the ARK Fintech Innovation ETF (NYSEARCA: ARKF) is ascending to star status this year and the move away from cash, hastened by the coronavirus pandemic, is a big reason why. Importantly, the move to cashless and contactless payments isn’t going to abate when the coronavirus is defeated.

Millennials Ditching Cash, Boosting Case for Fintech ETF

A big reason the ARK Fintech Innovation ETF (NYSE: ARKF) is higher by 71.32% this year is the growth of digital wallets, such as PayPal's (NASDAQ: PYPL) Venmo and Square's (NYSE: SQ) Cash App. What Happened: The actively managed ARKF is the king of exchange-traded funds when it comes to Square exposure, allocating 12% of its weight to that fintech juggernaut, more than any other ETF.

Square Marks The Spot For Fabulous Fintech ETF

It’s hip to be square, according to the old song. With the ARK Fintech Innovation ETF (NYSEARCA: ARKF), it’s hip to have large allocation to payments processor Square (NYSE: SQ).

Square’s Cash App Is Big Driver For Fintech

The ARK Fintech Innovation ETF (NYSEARCA: ARKF) is a prime example of an ETF with a slew of tailwinds and many of those are derived from two marquee holdings: Square (NYSE:SQ) and PayPal (NASDAQ:PYPL) In fact, the actively managed ARKF allocates 11.63% to Square, the largest weight that fintech name among all exchange traded funds. [...]
The post PayPal, Square Move Needle for Fabulous Fintech ETF appeared first on ETF Trends.

PayPal, Square Move Needle for Fabulous Fintech ETF

The move to cashless and contactless payments is on in a big way and that has long-ranging, positive implications for fintech ETFs, such as the ARK Fintech Innovation ETF (NYSEARCA: ARKF). Cards and digital payments are slowly, but surely usurping cash as primary forms of payment, providing a compelling, long-term runway for growth for ARKF [.

Cashless Call Lifts Fintech ETF Fortunes

The coronavirus pandemic is facilitating “new normals” across an array of daily activities with a prime example being how folks spend and move money. Put another way, the ideas of going into bank branches and using cash in brick-and-mortar stores were already dying slow deaths before the pandemic and that decline is being accelerated by [.

News for ARK Fintech Innovation ETF ETF (ARKF)