ARK manages its strategies in a benchmark agnostic manner. ARK’s portfolios generally have low overlap with traditional indices and high active share.* Despite this, ARK often illustrates the performance of its portfolios relative to broad market indices, including the S&P 500 Index and the MSCI World Index. While most of the names in ARK’s portfolio are either not part of broad-based indices or represent very small weights, ARK believes the companies it invests in will be prominent in such indices over a full market cycle.
Note: This only applies to ARK’s actively managed ETFs. The index ETFs are designed to track an index.
*Active Share is a measure of the percentage of stock holdings in a manager’s portfolio that differs from a benchmark index. High Active Share can be an indicator for uncorrelated returns. ARK believes managers with high Active Share may have the opportunity to outperform their benchmark indexes. Investors should not strictly rely on Active Share as a potential indicator of market outperformance. Managers with a high Active Share can still underperform their benchmarks, due to security selection, among other factors. ARK manages its strategies in a benchmark agnostic manner.