BMO new ETF kinda ARKK VS ARKK itself

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Hi guys,

I was reading your answer about the BMO ZINN ETF and it’s collaboration with the ARKK team. I saw that BMO have create similars ETF for all the ARKK fund.

I was wondering what’s the biggest differences between BMO ETF and ARKK fund ?

I know ARKK funds have less holdings than the BMO so I guess BMO could be less volatile ?

You say that ZINN is more of an index fund. How would you classified the ARKK fund ?

As always thanks for your time and your thinking ! 🙂

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Asked on March 9, 2021 11:04 am
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Here there - just answered a question on ZINN yesterday. Here was my response:
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Let's start with ZINN - yes, this was developed in collaboration with ARKK and is intended to track the MSCI ACWI IMI Innovation Index. So in essence, it is an Index fund. The Index features companies in the autonomous technology & industrial, genomic, fin tech, and next generation internet industries.

If you look at their Top 10 holdings, i like the fact that no one company accounts for more than 6% of the portfolio and in essence, it is a who's who of top tech companies (Visa, Mastercard, Amazon, Alibaba, Microsoft, Paypal, Alphabet, ect). Since it is brand new, its unclear how it will perform but seems to a decent way to get exposure to some big growth names. Low volume may just be because it has yet to catch on with investors given that growth has struggled significantly over the past month.
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So, yes - it tracks an Index so is classified as an index fund. Where ARKK differs, is that it is actively managed and the manger (in this case Cathie Woods) is essentially stock picking and buying/selling stocks based on opportunities. Not tracking an index. So very different.

And yes, that would mean that BMO is likely to be less volatile than ARKK but ARKK has greater reward potential (naturally, given the higher risk.)

Mat

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Posted by Mathieu Litalien
Answered on March 9, 2021 6:20 pm