One of the most exciting investment funds of 2020 has been Cathie Wood’s ARKK funds. Her active Innovation ETF154% have returned 154% in 2020, making them the highest performing active ETF on the market.
Whilst historical performance in shares doesn’t mean you can expect the same in future if you are like me in Europe you are probably wondering how you can invest in ARKK’s funds?
ARKK invest primarily in companies who are at the forefront of innovation in their respective sectors. They have large holdings in companies such as Tesla, Square, Roku, Spotify and most recently they invested in Palantir. This is a fund that is high risk, high reward! Tesla alone has gone up 7x in 2020 and so it’s no surprise given they are ARKK’s biggest holding that they have had such an amazing return in 2020.
One of the more frustrating things for European investors has been that currently ARKK funds are generally not products that are generally available to invest in on our investing exchanges.
However there are some other ways in which you can invest in ARK’s funds, here is one way in which it can be done:
Investing in ARKK funds in the UK/ Europe using a Trading 212 Pie
Trading 212 is a great app for tech savvy investors. One of the best features it has is the ability to create “Pies” which are effectively pots of money you can create with a fixed percentage of stock holdings.
So if you want to build up a portfolio of the same stocks with equal weightings, all you need to do is invest money into the Pie and Trading 212 will purchase the stocks at the same ratio each time.
Pretty cool hey!
For example if you wanted a portfolio of 33% Tesla, 34% Apple and 33% Facebook you could create this as a pie and then every time you bought £100 worth of shares it would buy £33 of shares in Tesla and Facebook each and £34 in Apple.
Trading 212 allow you to create public pies which can be accessed across it’s community of investors. They allow the community to share pies.
A couple of absolute legends have created some pies that replicate ARKK’s holdings and these are rebalanced each week to account for any new purchases or sales. Whilst it’s not going to be 100% accurate to ARKKs holdings, it’s pretty close, especially considering a lot of their holdings are long term growth stocks.
Another advantage to these pies is that you won’t pay any management fees which currently are 0.75% annually. The only downside is that you will need to make sure you sell the holdings based on when ARKK do as the pie will update for the correct holdings but won’t sell them on your behalf.
How to invest:
- Download the Trading 212 app. If you haven’t got it already, use this link and you will get a share worth up to £/$100. (full disclosure, I also get a share worth up to the same)
- Sign up for an account
- Go to the Pie Library
- Go to the section ARKK and then pick which ARKK pie you want to invest in.
Let’s hope 2021 has the same return for ARKK funds as 2020. Let me know if you are investing in ARKKs ETFs and your thoughts on the above strategy.