Copying ARK invest portfolio

FrankR
FrankR Posts: 140 Forumite
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edited 29 June 2021 at 6:33PM in Savings & investments
- 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.
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Comments

  • Emsobell
    Emsobell Posts: 10 Forumite
    First Post
    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
    eskbanker Posts: 36,849 Forumite
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    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
    Thrugelmir Posts: 89,546 Forumite
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    Not everyone shares similar views to Cathie Woods on Tesla......... (or Donald Trump for that matter).  
  • Prism
    Prism Posts: 3,846 Forumite
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    A pretty close match to ARK for UK investors is Scottish Mortgage Trust
  • Emsobell
    Emsobell Posts: 10 Forumite
    First Post
    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
    bostonerimus Posts: 5,617 Forumite
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    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.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Oswulf
    Oswulf Posts: 16 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    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
    HCIMbtw Posts: 347 Forumite
    Fifth Anniversary 100 Posts Name Dropper
    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
    george4064 Posts: 2,924 Forumite
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    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.
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2025 - #024 £1,450 / £15,000 (9%)
  • ARK funds now seem to be available in the UK through eToro, if that was your barrier to investing in the fund itself.
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