In this article, we'll compare ARKQ vs ARKK:
ARK Autonomous Technology & Robotics ETF (ARKQ) vs ARK Innovation ETF (ARKK).
Both Exchange Traded Funds (ETFs) are popular investments for different reasons.
This article will help you decide between ARKQ vs ARKK.
ARKQ vs ARKK
The primary difference between ARKQ and ARKK is the fund's investment goals. ARKQ has an investment goal to track autonomous technology and robotics companies. ARKK has an investment goal to track disruptive innovation.
They have the same expense ratio. ARKK has an expense ratio of 0.75%, and ARKQ has the same expense ratio of 0.75%.
This makes both ARKQ and ARKK expensive ETFs for investors. Investors can expect actively managed funds to be more expensive than passively managed funds.
This is ARKQ and ARKK holdings side by side:
Both ETFs have a significant amount of Tesla. ARKQ also has more UiPath compared to ARKK.
Both ARKK and ARKQ are actively managed. This means ARK Invest has fund managers actively seeking to beat the market with these funds.
This means that a fund manager (Cathie Wood) at ARK Invest is actively trying to beat the market.
ARKQ
- Actively Managed Fund
- Expense Ratio: 0.75%
- Offered By ARK Invest
- Holds 30 – 50 Stocks
ARKK
- Actively Managed Fund
- Expense Ratio 0.75%
- Offered By ARK Invest
- Holds Between 35 – 55 Stocks
ARKQ vs ARKK Performance
ARKQ and ARKK have had similar performances over the last 5 years. However, ARKQ is beating ARKK by 0.54% annually.
Over the last 3 years, ARKQ has been significantly beating ARKK by 13.09% per year.
Performance Comparison:
As you can see from the chart, ARKQ slightly outperforms ARKK over the longer term.
In the short term, both ETFs have been volatile.
Similarities Between ARKQ and ARKK:
- Both Are Exchange-Traded Funds (ETFs)
- ARK Invest Funds
- Similar Performance Over The Last 5 Years
- Both Focus On Growth Companies
- Actively Managed ETFs
- Similar Number Of Holdings
ARKK and ARKQ Differences
The main difference between ARKK and ARKQ is how the fund is managed. ARKK seeks to track companies with disruptive innovation. ARKQ has an investment goal to track autonomous technology and robotics companies.
Their performance is also different, with ARKQ outperforming ARKK by 13.09% annually over the last 3 years.
Lastly, ARKK has more net assets, with $12 billion, than $1.6 billion with ARKQ.
Differences Between ARKK and ARKQ:
- Investing Goals Of The Fund (Disruptive Innovation vs Robotics)
- Net Assets
- Performance Returns (ARKQ Performed Better Long Term)
ARKQ Profile
- Fund Inception: 2014
- Expense Ratio: 0.75%
- Number Of Stocks: 30 to 50
- Top 10 Holdings: 57%
ARK Autonomous Tech. & Robotics ETF (ARKQ) is an actively managed ETF that looks for performance returns from companies in the autonomous technology and robotics industry.
They define this as companies benefiting from the shift to new technologies such as Autonomous Transportation, Robotics and Automation, 3D Printing, Energy Storage, and Space Exploration.
The fund has $1.6 billion in assets under management.
ARKQ Performance
The chart below shows the returns for ARKQ:
You can see that ARKQ has underperformed over the last year.
However, be mindful that this does not guarantee that these returns will continue to look the same over the long term.
ARKQ Holdings
Here are the top 10 holdings for ARK Autonomous Tech. & Robotics ETF (ARKQ):
The fund has $1.6 billion in total net assets.
ARKQ is primarily made up of Tesla, Kratos Defense, Trimble, UiPath, and AeroVironment. In addition, ARKQ provides exposure to over 30 stocks.
However, with the top 10 holdings making up more than 50% of the portfolio, it isn't very diversified compared to other ETFs such as Vanguard Total Stock Market Index Fund ETF (VTI).
ARKK Profile
- Fund Inception: 2014
- Expense Ratio: 0.75%
- Number Of Stocks: 35 – 55
- Actively Managed
ARK Innovation ETF (ARKK) is an actively managed ETF that looks for performance returns from companies with disruptive innovation.
They define disruptive innovation as new technology that changes the way the world works.
The fund has $12 billion in assets under management.
ARKK was created in 2014 and has an expense ratio of 0.75%. This makes ARKK an expensive ETF compared to similar ETFs like Vanguard's VGT.
Example:
Here is what a 0.65% fee (difference between ARKK and VGT) will cost over 30 years. Assuming you start with an initial investment of $100,000 and contribute $10,000 yearly over 30 years.
You will have $500,000 less in your account.
This does not include costs to buy and sell your shares.
ARKK Performance
ARK Invest's ARKK has underperformed over the last year with a return of -50%.
While ARKK has a negative 50% return, the S&P 500 has a positive return of 18%.
ARKK Holdings
ARKK's top 10 holdings include Tesla, Teladoc, Roku, Zoom, and Coinbase. The ETF invests in companies that are in high-growth technology.
The top 10 holdings make up over 50% of the portfolio which means you can expect higher volatility with ARKK compared to more diversified funds like Vanguard Total Stock Market Index Fund ETF (VTI).
How To Invest In ARKK and ARKQ
The easiest way to invest in ARKK and ARKQ commission-free is with M1 Finance. (Use this link for $50 when you open a new account)
M1 Finance gives you the option to invest in both options completely free. As we saw in our earlier example, this is important because fees can affect long-term returns.
You can still invest in ARKK and ARKQ using other platforms, but there will likely be a charge when buying and selling shares.
M1 Finance is the best option because it allows you to purchase ARKK, ARKQ, and thousands of other stocks.
M1 Finance also lets you purchase fractional shares.
This is great for buying stocks or ETFs with high share prices.
I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.
Personal Capital's free tools allow you to quickly find which of your investments has high fees so you can switch them to low-cost options. (Get a $20 Amazon Gift Card with this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)
Which Is Better ARKK or ARKQ?
ARKK and ARKQ are similar investments. They have had the same expense ratio (0.75%) and similar performance returns (25%) over the last 5 years.
Both ARKK and ARKQ have performed poorly compared to similar low-cost ETFs.
If I have to choose between ARKQ vs ARKK, I would slightly edge over ARKK because it has more assets under management.
However, I would never invest in ARK funds because I prefer passively managed, low-cost ETFs with solid performance history.
Some examples of passively managed, low-cost growth ETFs are:
- Vanguard's Growth Index Fund ETF (VUG)
- Vanguard Information Technology ETF (VGT)
- Vanguard Mega Cap Growth ETF (MGK)
Vanguard's VUG offers many of the same features as ARKK but at a much lower expense ratio of 0.04%.
I prefer VUG because of the lower expense ratio of these funds.
Investors in ETFs like VUG or VGT have had better returns at a lower cost!
This would suggest that passive management is better than actively managed funds.
Keep in mind past performance does not predict future returns.
I would choose VGT, VUG, or MGK over ARKK or ARKQ, and I would purchase the shares commission-free using M1 Finance. (Use this link for $50 when you open a new account)
That way, I keep my costs as low as possible.
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Is ARKQ or ARKK Better for Financial Independence?
The FIRE community keeps investment costs low, and we are a big fan of Vanguard. However, ARKQ and ARKK are both ARK Invest ETFs with high expense ratios.
Therefore, I would not consider these ETFs for financial independence.
Here are more ETFs I would prefer with low expense ratios and similar performances:
They all have similar returns and are at a lower cost compared to ARKK and ARKQ.
Also, if financial independence is your goal, I suggest looking into other funds that give you more diversification, like VTSAX.
My Winner: Neither
I wouldn't call ARKK or ARKQ winners. They have both underperformed compared to passively managed index funds.
They are also 7 times more expensive compared to similar ETFs.
I always lean towards keeping costs as low as possible, so ARKK or ARKQ would not be in my portfolios.
I prefer passively managed ETFs like the ones offered by Vanguard or Fidelity.
Remember: Returns Are Not Guaranteed, But Fees Are!
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