This “ARK ETF Stocks Universe: Investing in the New Nasdaq Universe with IKF AI” article was written by Sergey Okun – Senior Financial Analyst at I Know First, Ph.D. in Economics.

Headlines:

• COVID-19 has provided a positive environment for the Technology Stocks with increasing the XLK ETF by 54% while the SPY ETF increased by 32% from February 20^th, 2020, to February 16^th, 2022.
• ARK ETFs allow investors to get access to the most promising technological areas as artificial intelligence, DNA sequencing, robotics, energy storage, and blockchain technology.
• The AI algorithm of I Know First provides recommendations for the top long and short stocks from the ARK stocks universe.

Technology is an integral part of our daily life and has an impact on all spheres of human activity which helps to make our life easier and find efficient solutions for tasks that seemed impossible several decades ago. For instance, computers allow to save and to share information.  The widespread of computers have played an important role in the development of the labor market and in many other economic areas. Thanks to computer technology, new interesting and well-paid professions have appeared. Computers have contributed to the development of science, greatly simplifying design and computational activities. Now scientists do not need to spend most of their time on complex and lengthy calculations.

COVID-19 has accelerated technology inflections into everyday life and increased attention to innovation development in different economic sectors. According to TradingView, XLK increased by 63% from January 2^nd, 2020 to February 18^th, 2022, while SPY increased by 34% for the same period of time.  It is interesting to notice that SPY decreased more than XLK at the beginning of the pandemic by 31% vs 25% from January 2^nd to March 23^rd, 2020 (in this article we provide a conceptual framework for the stock market dynamic in the pandemic time).

ARK offers different active ETFs which concentrate on disruptive innovation and transformational companies. ARK ETFs cover artificial intelligence, DNA sequencing, robotics, energy storage, and blockchain technology. ARK tries to find the most intriguing technology companies considering the five-year investment horizon. ARK underlines that there are three criteria that innovation should meet: 1. Experience dramatic cost declines and unleash waves of incremental demand; 2. Cut across sectors and geographies; 3. Serve as a platform for additional innovations. ARK likes such companies as electric-car maker Tesla (TSLA), digital-payment company Square (SQ), and remote-healthcare platform Teladoc Health (TDOC) and believes in the exponential growth of these companies, and has repeatedly set high price targets for them.

The Covid-19 pandemic accelerated the adoption of many emerging technologies in 2020 that dramatically increased the growth value of all ARK ETFs in 2020. However, there has been a negative tendency for all ARK ETFs since February 2021.  

It seems that the decrease in technology stocks goes in line with the expectation of aggressively raising interest rates by the FED to deal with inflation. However, CEO and CIO of ARK Invest Cathie Wood said that she does not think that interest rates are going to move really far and the inflation is mostly due to the supply problem.   

ARK’s Stocks Universe

According to Cathie Wood, ARK’s portfolio looks nothing like most growth stocks and Index stocks funds, which invest in mostly the same technology companies, even Nasdaq and the S&P 500 are beginning to look at each other, which allows determining the ARK ETF as the New Nasdaq. I Know First covers ARK’s stock portfolio universe and provides stocks outlooks based on its artificial intelligence algorithm. The algorithm provides recommendations on different time horizons from 3-days to 1-year and allows to find profitable deals not only for investors, who share ARK’s view for brilliant technology perspectives, but also for investors, who stay in line with expectations of the FED raising interest rates, and it could have a negative impact on the growth stocks, by providing the top long and short stocks from the ARK stocks universe.

I Know First has developed the ARK ETF Forecast Package to help our client to determine the most promising stocks in the AKR stock universe. This ARK ETF Forecast Package had correctly predicted 9 out of 10 stock movements. SSYS was the highest-earning trade with a return of 10.06% in 3 Days. MELI and SQ saw outstanding returns of 7.26% and 6.79%. The package’s overall average return was 3.75%, providing investors with a 2.56% premium over the S&P 500’s return of 1.19% during the same period.

ARK’s ETF Stocks Universe: Conclusion

Technology is the driving force of economic development that provides a high return with a corresponding risk level. ARS ETFs allow investors to get access to the most promising technological areas as artificial intelligence, DNA sequencing, robotics, energy storage, and blockchain technology. Moreover, according to Cathie Wood, the CEO and CIO of ARK Invest, investors can consider ARK as the New Nasdaq. I Know First covers ARK’s stock portfolio universe and provides stocks outlooks based on its artificial intelligence algorithm from 3-days to 1-year horizons. Moreover, the algorithm of I Know First determines the top long and short stocks from the ARK stocks universe that allows finding the most promising deals not only for investors who go in line with ARK’s managers but also for investors who disagree with a good performance of the growth stocks in the future according to the expectation of increasing interest rates.

To subscribe today click here.

To learn more about I Know First and the solutions we offer,

I Know First: Israel – Brazil – Italy