The average annual name turnover in an ARK portfolio is approximately 15%.
If a stock’s thesis is unchanged, ARK tends to trade around the periphery. If a stock’s share price has fallen in the market due to short-term controversy, ARK may increase its position (providing the thesis is unchanged). If a stock is overhyped, ARK will trim the position to take profits. Trading in both profitable and losing investments that do not have thesis changes is for the purposes of reallocating into names with higher upside to the valuation target. As a result, individual security turnover numbers are higher and can range between 60-75%. Note: This only applies to ARK’s actively managed ETFs. The index ETFs are designed to track an index.
For more information, please read the ARK ETF Trust Annual Report and the ETF prospectus, available on our Investor Resources page.