Close Close
ThinkAdvisor

ARK, Guggenheim to Launch Innovation-Focused UIT

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • ARK Investment Management teams up with Guggenheim to trade a new unit investment trust.
  • Cathie Wood's trademark emphasis on disruptive technology will be its core strategy.

Cathie Wood’s ARK Investment Management has partnered with Guggenheim to introduce a unit investment trust that invests in disruptive innovation.

The new product will follow ARK’s playbook and aims to give investors exposure to early stage growth potential and diverse investments in underrepresented companies, according to the Guggenheim fact card. Its sales fee has been set at $0.275 per unit.

The early stage disruptor exposure will include five “defined innovation platforms of artificial intelligence, DNA sequencing, robotics, energy storage and blockchain technology.”

The trust will be made up of about 80% small-capitalization firms and 20% mid-cap equities. Growth stocks will comprise roughly 48% of holdings, while value will represent about 37%.

Guggenheim states that it sees the global economy going through a transformation, “the likes of which hasn’t been seen in more than a century,” and that early stage disruptor companies are leading the charge. These disruptors “offer the potential to stimulate substantial growth or even create new markets, while upending existing sectors,” it adds.

Some of the holdings for the unit investment trust include artificial intelligence companies like cloud computing firm 2U Inc., blockchain technology firms such as digital wallets Opendoor Technologies, DNA sequencing firms like CareDx, energy storage firms such as Kratos Defense & Security Solutions, and robotics firms like Materialise NV.

Wood, who is on the frontline of investing in these types of companies, offers what she sees as key industries in her Big Ideas yearly outlook.

Although Wood’s performance has garnered headlines, the performance of her flagship ARK Innovation ETF (ARKK) fund is down slightly year to date. It hit a high of $156.58 on Feb. 12, but traded at $123.04 on Aug. 6. As of June 30, ARK reported $84 billion in assets, up from $51 billion in the prior quarter.