Copying ARK invest portfolio

FrankR

- What are the negatives of picking stocks from the famous ARK investment portfolio online to invest in?  I assume all the hard work of checking business fundamentals has been done by top analysts else they wouldn't be included in the portfolio, together with insider knowledge about the companies listed such as future growth potential and stock price... Thanks.

Emsobell

That's easy to answer, but before I do. What is your reason for choosing listed companies from ARK? i.e, high growth geared companies.

eskbanker

That would be a pretty odd way of investing!  There's nothing stopping people from cherry-picking stocks chosen by fund managers, but if you believe that the manager concerned is capable of picking good stocks consistent with your objectives then why wouldn't you just buy units in the fund(s)?  What attracted you to this particular firm in the first place?

Thrugelmir

Not everyone shares similar views to Cathie Woods on Tesla......... (or Donald Trump for that matter).  

Prism

A pretty close match to ARK for UK investors is Scottish Mortgage Trust

Emsobell

I would say ARK is much more bubble stock territory than Scottish Mortgage. Key considerations, is inflation here or due to persist in the coming decade. Anything over 2% and things will get very spicy for growth stocks. 

bostonerimus

Why complicate your life? It would be a lot of work to replicate ARK and even if you limit yourself to 10 of the equities that's a lot to track and manage. So either buy ARK...or better still buy a few less expensive funds that will provide you with a far more diverse portfolio.

Oswulf

FrankR said:

I assume all the hard work of checking business fundamentals has been done by top analysts

ARK doesn't employ top analysts.  They're exceptionally unqualified.  To quote Morningstar refers to its "lone portfolio manager, inexperienced team, and lax risk controls" and "Almost none of ARK's analysts have progress beyond earning bachelor's degrees."

HCIMbtw

One potential negative is that investment in companies by high profile funds can often drive up the price of a stock short term as some others follow with copycat style investment

So you end up buying an investment in a company at a higher price

I have a friend who I think did this recently with Pyrogenesis after some ARK investment hype.. so if you believe in a stock picker and want to be in with first movers there is an advantage in investing in the fund rather than trying to pick through it.. 

george4064

If you try and copy an active portfolio such as ARK you will always be trading behind/after the actual investment portfolio itself, meaning that you'll be at the mercy of any price movements that may come about as a result of ARK buying/selling that company. You'll 99% of the time be getting a worse price than ARK will be.

All in all, just invest in the investment portfolio itself if you want to invest in those underlying companies, or find a suitable UK alternative such as SMT.

scroogemcduck2

ARK funds now seem to be available in the UK through eToro, if that was your barrier to investing in the fund itself.