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🚀 #CathieWood made massive trades in all #ARKInvest funds over the last quarter. This episode focuses on the #GrowthStocks in #ARKW, #ARKQ, and #ARKX. The @ARK Invest ETFs are filled with some of the best stocks to buy now (hello Tesla stock, TSLA), but can Cathie Wood's funds reach new all-time highs? Find out why I'm more bullish on ARK's picks than ever on 2021's Q2 State of the ARK!
It hasn't been great for your business. I mean, worse start to the month on record, you've seen outflows of a billion dollars.
Is the space exploration part of it at the front of its title, the lead part of its title a little bit misleading?
So as Cathie Wood's favorite holdings lost her momentum, her ETFs, they got hammered.
Wow, what a dramatic few months this has been. Every quarter, I like to look back and do a performance review for ARK Invest as well as this channel. It's a great way to tie together the research, the stocks, the drama they both cause and reflect on the state of Ticker Symbol: You. In case you forgot, last quarter ARK Invest's funds looked like this and the channel looked like this. Let me show you why I'm more bullish than ever on both on this quarter's State of the ARK.
By the way, you might want to grab a drink because we're about to cover a lot of stocks. So let me show you why I'm more bullish than ever on both on this quarter's State of the ARK. By the way, you might want to grab a drink because we're about to cover a lot of stocks. See what I did there? If you enjoy this type of commentary and analysis, consider liking this video and subscribing to the channel with all notifications turned on.
That way, you'll be the first to know when I come out with new research, regardless of how YouTube tunes its algorithm. First, let me quickly walk you through the purpose of this episode. The State of the ARK is about adding context to Cathie Wood's biggest buys in each ARK Invest fund over the quarter. Since I focus a lot on their research, this is about seeing how she puts ARK Invest's money where its mouth is. So much has happened this quarter that I had to split this project into three episodes.
You can watch them in any order. So if you're looking for my analysis of ARK Invest's combined positions, I'll leave a link to that in the top right hand corner of your screen right now and in the description below as well. This episode will cover the following funds: ARKX, ARK Invest's recently launched fund themed around space Exploration, ARKW, their fund themed around the next generation of Internet applications and ARKQ, ARK Invest's fund themed around the autonomous revolution because those three funds have a lot of overlap in terms of themes and technologies.
The third part will cover ARKF, ARKG, and ARKK, so stay tuned for that and stay tuned until the end of this episode to see how your time investment in this channel has been paying off big time. Your time is valuable, so let's get right into it. At the start of the quarter, ARK Invest launched ARKX, their newest fund themed around space exploration. ARKX immediately dethrowned ARKF and took the title for most misunderstood fund of all time. There are two big questions when it comes to ARKX.
First and foremost, we expected spaceships and lasers, but we got Netflix and tractors. Cathie Wood even sold out of Virgin Galactic, ticker symbol SPCE, a holding that seems perfect for the space Exploration fund. So… What's going on? Here's Cathie Wood on CNBC's Closing Bell earlier this quarter explaining the rationale behind investment choices like these.
Should that ETF be called just the innovation ETF? I mean, is the space exploration part of it at the front of its title, the lead part of its title a little bit misleading?
No, not at all. In fact, we believe the next frontier here, where there are real money making opportunities is not space tourism. It's going to be a very small market in the short term. It's two markets: mobile connectivity – there are 3 billion people around the world who have no access to Netflix, broadband and the Internet, and the satellites that SpaceX and others are putting up there now are going to give those people an opportunity to become a part of the Netflix family. So we think Netflix is going to be a huge beneficiary.
Deere Farming is going to become much more efficient. The productivity gains are going to be enormous as we start using drones to identify exactly how much fertilizer is needed, where, I think that drones and some of the connectivity from a weather point of view they've done for years. They bought a company from Monsanto to focus on the weather and how weather patterns would affect farmer productivity around the world. I think autonomous farming is going to demand drones, satellite information. And so we think it's going be a big play.
ARKX has four types of companies in it: orbital aerospace companies which make satellites and Rockets; suborbital aerospace companies, which focus on drones; air taxis and other flying vehicles; as well as the parts that go in them. Aerospace beneficiaries, think about how companies like Netflix and Amazon would benefit from more people getting access to the Internet and how big industrial and agricultural companies would benefit from more of the world's surface getting access to the Internet. And finally, there are the enabling technologies. That's artificial intelligence, robotics, energy storage and 3D printing.
Right now, a lot of the confusion seems to be that a lot of the companies that are in ARKX are in there as beneficiaries of satellite, Internet and GPS. In fact, in my video where I predicted many of the companies that ended up in ARKX, I said that Tesla could technically qualify for the Space Exploration Fund as a beneficiary of Internet access on every road and as an enabling technology company because of their work in artificial intelligence, robotics, and energy storage. To be fair, Tesla does have a vehicle in space,
so… Check mate, I guess. My point is the criteria to make it into ARKX seems vague enough that many of ARK's holdings can be put inside this fund. Speaking of filling the fund with enabling technologies, the other big criticism of ARKX is that one of its biggest holdings is ARK Invest's own 3D printing ETF. Is this for real? What are Cathie Wood's thoughts around placing one of her own funds within another? And are we getting double charged for that?
What you would say to those people that have criticized the way in which you've held your own ETFs within one of your other ETFs? Do you accept that, in the least, that's not an ideal thing to be doing?
Well, this is the 3D printing fund within the Space ETF ARKX because 3D printing is one of the killer apps. In fact, the killer app is aerospace, including space. We felt it very important to have a good smattering of 3D printing. Now, 3D printing is a smaller cap space. And so we felt that because it was so important that we would put it in our fund. However, our clients are not being charged, double charged. That comes out. We do not charge them double fee. Instead, they have a very well diversified participation in 3D printing, which I think as more and more people understand how important it is going to be to aerospace, not just Rockets and satellites, but also airplanes, including the engines.
I think they'll appreciate why we own 3D printing and wanted to own it in size.
Since the fund is still so new, I figured the right move here was to show you Cathie Wood's answers to some of the community's biggest questions. The reason I haven't made a video dedicated to ARKX yet is because its holdings are still changing by huge amounts and it's hard to tell what's really going on. Let me show you. Here's a table of ARKX's Holdings and how they've changed over the quarter. The first thing to remember is that this fund is still very tiny: $600 million in assets under management.
ARK Invest's Tesla position in just ARKW is bigger than this entire fund and that's up from about $320 million at the start of the quarter, a change of about 83%. Even after that massive increase, this fund is now only a little more than 1% of ARK Invest's total assets under management. Each row is one stock in the fund and the stocks are sorted by their rank in the fund. So Trimble, ticker symbol TRMB, is the top holding in the fund at $60 million, positions that grew by more than 83% in the fund are colored in green,
since that's how much the fund grew by on average. Those that grew by less than 83% are in red. As you can see, the fund underwent a lot of changes so far, with a lot of stocks being added and dropped over the quarter. Any row with blanks for changes in shares, share price or total change in position size means that stock was added in the fund after the start of the quarter. Jd Logistics the 6th biggest position in the fund got added at the end of May.
Same with Unity software, ticker symbol U, the 19th biggest position in the fund. I'm always happy when Ticker Symbol: You comes together with space exploration, but here's the issue. Amazon's position grew by 97%, but we know it's a cash like position in some of the other funds. So did it grow because of the Amazon Air drone delivery program? Because more people getting Internet means more people shopping with Amazon.com? Or because Cathie Wood wants to hold more cash like positions in this fund while it continues to grow.
Google's position in the fund grew by 83%, right in line with the fund's growth itself. Same question, is it because of their work in artificial intelligence, because Google will benefit more from more global Internet users? Or what? The last thing I'll point out is that the biggest holdings in ARKX are still some of ARK Invest's smallest holdings overall. These last two columns showed the overall ARK rank of each holding if you combined all six of their actively managed funds. Hardly any of the 38 stocks in this fund are even in ARK Invest's top 50 holdings overall.
When the fund settles and some interesting patterns make themselves more clear, I'll put out a dedicated video on ARKX. Stay tuned for that. Stocks that focus on artificial intelligence, big data analytics and digital experiences sit inside ARKW, ARK Invest's fund themed around the next generation of Internet applications. This fund is filled with online services that most people have tried or at least are familiar with. Shopify, Spotify, Twitter, Zillow, Zoom, Netflix, Peloton, and Roku all sit inside ARKW. These are all digital native companies that take something that's annoying to do in the physical world, renting a movie, paying someone, signing and sending a document, shopping, communicating with other people, and bring that activity online.
Then they use artificial intelligence and the mountains of data they collect to optimize that experience for each user based on the data they have on that user and users like them. The biggest outsized buys Cathie Wood made in ARKW over that time period are Roblox, ticker symbol RBLX, Pinduoduo, ticker symbol PDD, Peloton, PTON, Coinbase again, Twitter, TWTR and Twilio, TWLO. Also, don't worry about the craziness in the Trade Desk's row, ticker symbol TDD. They underwent to ten to one stock split a few weeks ago, which is why their price per share fell by 90%, and its sheer account went up by ten times. The total amount of Trade Desk that ARK Invest owns right now in ARKW is 44% higher than it was at the start of the quarter.
Let me also briefly mention the biggest downward movers in the fund because many of them are interesting. Opendoor, ticker Symbol OPEN, PayPal, PYPL, Square, SQ, Grayscale Bitcoin Trust, GBTC and JD.com, JD. Both Square and PayPal got sold at least partially because their stocks increased in price. In my opinion, they're still major frontrunners in terms of digital wallets and mobile payment ecosystems. Jd.com and Grayscale Bitcoin Trust got sold even though their stocks decreased in price. Jd Logistics, the logistics arm of JD.com IPO'ed at the end of May, so ARK Invest might have rebalanced some of their positions in JD around that.
As for the Grayscale Bitcoin Trust, ARK Invest very recently filed to start their own Bitcoin ETF, ARKB, which may compete with GBTC for positions in ARKW and ARKF. The top holding in ARKW as well as ARKQ, ARK Invest's fund themed around the autonomous revolution, is Tesla, ticker symbol TSLA. Tesla is also ARK Invest's biggest holding overall, meaning it greatly affected their performance when they made dramatic moves of 20% or more in both directions this quarter. Recently, there have been renewed concerns over the crash reporting rules and safety around autopilot and full self-driving.
Here's Cathie Wood on CNBC's Closing Bell, talking about the future of Tesla's autonomy and how we should be thinking about its safety.
Cathie, I wanted to talk Tesla, one of your favorite stocks because that's part of the performance issue. It's off 25% from the highs. And there are some real questions right now about the reliance on autopilot and whether that has led to some debt. You have been super bullish on Tesla's autonomous future and vision of robotaxis. Isn't that problematic given some of the concerns here around safety?
Actually, I think we've gotten some very important information recently that Tesla is seeing its way through, so to speak, to autonomous and that is they've decided to take radar out of the ecosystem and just depend on vision. Computer vision, CV, so eight cameras. I think they're getting much closer. And as far as autonomous, when anyone talks about about safety in an autonomous vehicle, they have to consider the alternative. The alternative is human driven travel. Humans are responsible for 80% plus of all fatalities in automobiles, and so autonomous is going to really take that issue away from us.
So we think that we're much closer than most do. We think we're probably not as close as Tesla thinks it is, but we do think within the next two years we're going to see some really surprising breakthroughs from Tesla. We've been watching Waymo and cruise automation here, and we think they're probably struggling with how to scale that business. We think Tesla is going to go autonomous at scale or much more quickly than any of its competitors.
I was surprised when Tesla first announced that it was dropping radar and relying only on cameras for full selfdriving. To me, this means they've made some serious progress on the artificial intelligence and computer vision side of things, and that radar data was adding a lot of complexity without adding a lot of value. If that's true, that's only possible because they have such a large fleet of cars to draw training data from, something no other manufacturer can currently claim. If Tesla really is billions of miles of training data ahead of its competition,
it will likely be the winner in the winner take most market of autonomous ride hailing. The stocks in ARKQ focus on the ways we interact with technology in the physical world, to move, to build things and to do our jobs. ARKQ is filled with stocks that focus on autonomous vehicles, energy storage, robotics, 3D printing, and for now, still, space exploration. Thematically, ARKQ is my personal favorite simply because it actually has robots and rockets. ARKQ is actually the smallest ARK Invest fund, besides ARKX, weighing in at just over $3 billion in assets under management, the AUM in ARKQ shrank by a little over 6% over the past quarter.
Accounting for that, the biggest upward movers in ARKQ were 3D Systems, ticker symbol DDD; Unity Software, ticker symbol U; Iridium Communications, IRDM, Kratos Defense and Security, KTOS; and JD.com, ticker symbol JD. One of the reasons I'm hesitant to talk about some of the decreases in ARKQ, like Teradyne, Deere, Synopsys and AeroVironment is because they're positions that were added to and increased in ARKX, meaning this could just be a shift in space exploration stocks from ARKQ to ARKX, but I'm not exactly sure if it works that way.
Like I mentioned when I talked about ARKX, this is my big question about ARKQ, which has space exploration as one of its themes. How are decisions made about which stocks go into one, the other, or both? Trimble and Kratos Defense are top five holdings in both funds. Google, Lockheed Martin, Unity Software, Nvidia, Alibaba, Tencent and several other companies are in both of these funds. I get that all of the companies I just mentioned do a wide variety of things that depend on an even wider variety of technologies and data sources.
But I think that ARKQ should be all about autonomy and robots, while ARKX focuses more on space and aerospace. Comment below with your thoughts on ARKQ and ARKX. Do you think these funds are distinct enough from each other, or do you think that they overlap too much to be separate funds? Your voice matters. I treat your time as an investment. So here's how your investment is growing and what you can expect going forward. This past quarter has been thrilling and exhausting. I built a home studio and quit my day job to pursue my passions in research, technology, investing and video journalism.
Just in time for growth stocks to collapse along with my portfolio, ARK Invest's portfolio, and of course, the interest in this channel. For the two months immediately after I quit my job, almost all of my videos cost more money to make than they brought in. Talk about a trial by fire. You know how it goes, though. The best time to double down is near the bottom. So that's exactly what I did. I made 22 videos, almost double what I usually make in a quarter. I switched from talking about world changing technologies and ideas about the future to talking about the stocks that I felt were crashing the hardest and the biggest opportunities to buy into that future.
I canned my daily live streams on Ticker Symbol Live to focus on quality over quantity, and that worked out in terms of views and subscribers. That added value also seems to have attracted all sorts of potential sponsors: finance apps, stock and crypto trading platforms, social media platforms, VPN solutions… The list goes on and on. I don't use the products or services from any of these sponsors, so I rejected them. Denying sponsors that are irrelevant to my audience is another way that I can respect your time, so these videos will continue to be unsponsored until something comes up that makes sense to put in front of you.
Even if that means I have to continue eating the production costs myself. I've also continued to keep my promise of cutting one ad per video. Take that, almighty YouTube algorithm. Hey, wait. If each ad is a quarter minute long, then I've saved my audience about seven months of combined ad watching over this last quarter and more than a year and a half overall. Holy Moly. I'm really proud of that. ARKF those ads. The only reason I can keep cutting ads and denying sponsors is because of the wonderful support of my patrons on Patreon and the channel members right here on YouTube.
When everything tipped 30% to 40% or more, all of my supporters really kept me going. It really means the world to me. Thank you. Also a big shout out to the Ticker Symbol: You Discord community, which now has over 4000 active members in it. That project turned out to be a real success. This quarter, all of my projects focused on expanding my reach. Ticker Symbol: You now has a podcast so that people can catch the content even if they're not big on YouTube or just prefer remastered audio-only episodes.
I now also have a website, tickersymbolyou.com. It's a work in progress, but I'm building it so so you can find all my additional commentary, resources and spreadsheets all in one place. Instead of having to sort through the description of each video to find what you're looking for. Let me know in the comments below on what other things you'd like to see: T shirts and mugs, a public portfolio that we can track together weekly, some other topics or different types of content; your voice matters.
After all, this is Ticker Symbol: You. My name is Alex, reminding you that the best investment you can make is in you.
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