The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  ARK Autonomous Technology&Robotics ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy’s management team earns a Below Average People Pillar rating. The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a considerable overweight position in volatility exposure and has a considerable underweight in yield exposure compared with category peers. High volatility exposure is attributed to companies with a higher standard deviation of returns. And a low yield exposure is rooted in holding fewer stocks with high dividend or buyback yields -- instead, typically holding stocks in an early stage of development. 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

Kratos Defense & Security Solutions

Tesla

Teradyne

Trimble

UiPath

Iridium Communications

AeroVironment

Deere & Company

Archer Aviation

Alphabet

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 Autonomous Technology&Robotics ETF earns an Average Process Pillar rating. 

The main contributor to the rating is the firm's five-year retention rate of 100% over the period. The stability of the management team also supports the process. Specifically, the fund has not seen a manager change in the last nine years. Lastly, the process is limited by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

 This strategy, over time, has preferred smaller market-cap companies, compared with others in the Technology Morningstar Category.  But in terms of investment style, it is on par with peers. Analyzing additional factors, this strategy has consistently overweighted the volatility factor compared with Morningstar Category peers over the last few years, meaning it invests in stocks with a history of the higher standard deviation of returns. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. In recent months, the strategy was more exposed to the Volatility factor compared with its Morningstar Category peers as well. This strategy also has had lower yield exposure than peers over these years; its portfolio has held fewer stocks with high dividend or buyback yields. Its preference for stocks with lower yields may well lead to a growthier portfolio. However, growth stocks court additional risks if their forecasts do not come to fruition and are often more volatile than companies with stable dividends. Similarly, in recent months, the strategy also had less exposure to the Yield factor than peers. This strategy also has tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over these years. Such positions do not tend to provide much ballast for a portfolio. In recent months, the strategy also had less Quality factor exposure than 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 industrials and consumer cyclical relative to the category average by 31.3 and 9.2 percentage points, respectively. The sectors with low exposure compared to category peers are technology and financial services, with technology underweighting the average portfolio by 37.0 percentage points of assets and financial services similar to the average. The strategy owns 37 securities and is relatively top-heavy. Of the strategy's assets, 65.3% are concentrated within the top 10 holdings, compared to the category’s 52.3% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 21% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

With only one listed portfolio manager, ARK Autonomous Technology&Robotics ETF leaves itself vulnerable to key-person risk. The manager has not yet proven themself effective at running the strategy, leading to a Below Average People Pillar rating. 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 nine-year period. Finally, the manager's personal investments in the fund are another factor of analysis. Catherine Wood has invested over $1 million in the strategy, demonstrating a commendable effort to align interests with shareholders.

 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.

Below Average

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 Industrial Innovation ETF

ARKQ is an actively managed fund with a broad mandate to invest in companies that its managers identify as benefiting from automation and other technological advancements.

ARK Genomic Revolution Multi-Sector ETF

Two ARK funds received enormous inflows Wednesday, outpaced only by the much larger SPDR S&P 500 ETF.

ARK ETFs Are More Popular Than Ever. What It Means for Investors.

There's more to its story, but the ARK Industrial Innovation ETF (NYSEArca: ARKQ) is often highlighted for having one of the largest weights to Tesla (NASDAQ: TSLA) among all exchange traded funds. That's a trait working in favor of ARKQ this year and one that could prove persistent as Tesla fends off new competitive threats [.

As Electric Vehicles Evolve, Tesla Still Has Big Advantages

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Technology Select Sector SPDR Fund

News of new virus strain in the UK will likely keep the market subdued this week and brighten the appeal for tech ETFs.

Forget Sector Rotation: Tech ETFs to Rule in Christmas Week

As usual, Tesla Inc (NASDAQ: TSLA) is garnering plenty of headlines. Most recently, it's because the beloved and controversial stock entered the S&P 500, but there's more to the story.

Tesla Ability To Prove Harbinger Of Electric Vehicle Success Meaningful For ARK ETF

ARKQ is a robotics and autonomous technologies ETF which has outperformed peers and the S&P 500. ARKQ will do well in the present market's upcycle for tech and the economic recovery, due to its higher concentration risk.

ARKQ: Outperformance Backed By Selectivity In New Economy Sector

ARKQ has gained almost 100% through 2020. ARKQ's strong performance has attracted strong inflows.

ETF Insights: ARKQ's Fabulous 2020 Will Be Hard To Repeat

ARKQ's underlying objective is well positioned to profit from advancements in new technologies in the energy, automation, manufacturing, materials, and transportation sectors. The market outlook for the stocks held is promising except for some volatility risks along the way due to the presence of Tesla and geopolitics.

ARK Autonomous Technology & Robotics ETF: Triple-Digit Gains Including Tesla

ARKQ has nearly doubled in 2020 benefiting from its concentrated portfolio including a large position in Tesla. Autonomous technology and robotics are set to define the "new industrial revolution," representing long-term, positive tailwinds for the investing theme.

ARKQ: We're Taking A Cautious View Following A Monster 2020

The rise of artificial intelligence (AI), commonly referred to as the fourth industrial revolution, carries with it significant investment implications. Investors can get in on the game via a myriad of exchange traded funds, but the ARK Industrial Innovation ETF (NYSEArca: ARKQ) is one of the best.

How the ARKQ ETF Is All In for the 4th Industrial Revolution

With DoorDash's initial public offering (IPO) a remarkable success, it's easy to say that food delivery is big business, or even a growing industry. For now, there's not an exchange traded fund dedicated to the food delivery industry, but there are ways to play the growth segment via ETFs.

Drones x Food Delivery = An ETF Opportunity for the Ages

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ARK Innovation ETF

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Tesla (NASDAQ: TSLA) is one of the gold standards when it comes to disruptive companies, but its ability to alter industries may not be confined to electric vehicles and clean energy. What Happened: As has been widely noted over the course of Tesla's stunning year — one that's seen the shares climb 580% — the stock is affecting myriad exchange traded funds in positive ways.

Tesla Has More Avenues For Disruption, And That's Potent For This Disruptive ETF

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The continuation of vaccine and stimulus hopes and a divided government may push stocks and ETFs higher in December.

November Rally Likely to Drag Into December: 5 ETF Picks

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 Invesco S&P SmallCap Consumer Discretionary ETF

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Let's delve into some of the major events of December and learn how to tap the opportune moments with ETFs.

After a Historic November, What Awaits ETFs in December?

As was widely reported last week, electric vehicle juggernaut Tesla (NASDAQ: TSLA) is headed to the S&P 500, which is going to unleash a spate of buying by index funds and active managers that benchmark to the popular U.S. equity gauge. Tesla's S&P 500 inclusion is important for exchange traded funds that were invested in [.

The ETF Ahead of Tesla's Massive Cash Influx

It's not unusual for Tesla (NASDAQ: TSLA) to pack good news into a condensed time frame. That's the case again this week, and it's benefiting exchange traded funds such as the ARK Autonomous Technology & Robotics ETF (CBOE: ARKQ).

All In: The ETF for Maximum Tesla Exposure

Exchange traded fund investors should consider the industries and sectors most at risk of disruption to rethink their current exposure to those areas. In the recent webcast, Bad Ideas: The Industries That Could Be Disrupted by Innovation, Matt Murphy, Vice President, National ETF Sales, Resolute Investment Managers, highlighted the the risks of under-allocating to innovation.

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Tech ETFs are a way to for investors to profit from recent technological leaps without looking for specific names. Here are four to buy.

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The best AI ETFs for Q1 2021 are ARKQ, BOTZ, and IRBO.

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It was a long, often controversial road for Elon Musk's company, but Tesla Inc (NASDAQ: TSLA) is finally getting the long-coveted approval to join the S&P 500. The often clandestine committee behind the benchmark U.S. equity gauge said Monday the electric vehicle maker will join the index prior to the start of trading on Monday, Dec. 21.

3 ETFs For Tesla's S&P 500 Addition

The ARK Autonomous Technology & Robotics ETF (CBOE: ARKQ) is ascending the ranks of actively managed exchange traded funds in terms of performance. Exposure to Tesla (NASDAQ: TSLA) is a big reason why.

Talking Tesla Upside: Its Impact on the Hot ARKQ ETF

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

Ark ETFs Defying Gravity

The robotics investing thesis has significant long-ranging implications and it's just getting started, indicating there's plenty of fuel for long-term upside with the ARK Autonomous Technology & Robotics ETF (CBOE: ARKQ). ARKQ captures the converging industrial and technology sectors, capitalizing from autonomous vehicles, robotics, 3D printing, and energy storage technologies.

The Future of Robotics is Bright with ARKQ

Exchange traded funds with exposure to electric vehicle companies, including the ARK Autonomous Technology & Robotics ETF (CBOE: ARKQ), are benefiting as that still nascent industry takes off. There's good reason for optimism.

More Good News for Tesla and its Beneficiary, ARKQ

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

News for ARK Industrial Innovation ETF ETF (ARKQ)