The ARK Innovation ETF [ARKK] recently pushed Catherine Wood’s Ark Investment Management into the top 10 issuers of exchange-traded funds (ETFs) worldwide, following a rapid increase in the share price of its largest holding, Tesla Inc [TSLA]. The investment firm, which runs six other ETFs besides ARKK (with a new, space-focused fund on the way), dislodged WisdomTree [WETF] in the top 10 list.
The Innovation ETF is comprised of companies in the “disruptive innovation” space, encompassing fields such as genomics, industrials, next-gen internet and fintech. Ark’s other funds specialise in specific sectors.
In the 12 months to Friday 22 January, the flagship fund’s price had grown 175.7% from $54.09, with most growth occurring in the last six months. On 22 July 2020, the fund closed at $81.23, a 53.3% increase above its price six months prior, and closed 22 January another 79.8% higher at $146.08. In the opening weeks of 2021, the fund has gained 13.75% (as of 26 January’s close).
175.5%
The price rise of the ARK Innovation ETF over the past 12 months
Rapid rise
In displacing WisdomTree, Ark Investment Management went from a relatively minor investment firm with less than $3.5bn in assets to managing $41.5bn in ETF products. The Ark Innovation ETF makes up the bulk of Ark’s assets, worth $21.4bn at the time of Bloomberg’s 11 January report, which also states the ETF received cash inflows of almost $10bn in 2020
As of 26 January, the fund’s largest holding is Tesla, accounting for 9.76% of the fund. Tesla has driven much of the fund’s recent increase in value, with the electric vehicle company’s stock rising 21.01% year-to-date, and more than doubling in the last three months (as of 26 January’s close). Tesla closed at a record-breaking $883.09 on 26 January, having reached an intraday all-time high of $900.40. Even if the stock starts to settle, this represents a massive 691.30% increase from this time a year ago, when Tesla’s stock traded at just over $110.
9.76%
Tesla’s holding in the ARK Innovation ETF as of 26 January
Tesla is not the only stock that has driven the ARKK’s recent performance, however. Roku [ROKU] is the fund’s next largest holding at 7.21% of the fund and currently trades at $403.40, having gained 219.63% over the last year (as of 26 January’s close). Gains of 26.9% in 2021 so far suggest Roku is currently growing faster than Tesla. A strong earnings report revealing the streaming hardware service’s 14 million new users in 2020 saw Laura Martin, analyst with Needham, upgrade her price target to $400, a milestone the stock passed within days.
WisdomTree’s (relative) decline appears to be due, at least in part, to its focus on slower-growth assets. Its largest fund, the WisdomTree US Quality Dividend Growth Fund [DGRW], grew just over 10% in 2020 — underperforming the S&P 500 over the period. DGRW tracks “dividend quality growth companies” screened for “return on equity, return on assets and expected earnings growth”. It is perhaps unsurprising that the fund underperformed the markets in a year defined by upheaval, disruption and speculation, then.
Sustainable growth?
Bullish opinions abound regarding ARKK’s key stocks. David R Baker, a writer for Bloomberg, reports that electric vehicles could cost the same as internal combustion engine-powered cars within five years and cheapen from there. Wood, Ark’s founder and CIO, explained in a recent note that the company expects electric vehicle sales to increase twentyfold in that time. Given increasing demand for sustainable vehicles in China, Dan Ives, analyst at Wedbush Securities, recently raised his price target for Tesla to $950, predicting the stock could reach $1,250 in a bull-case scenario.
Roku has a compelling case for continued growth as advertising looks set to increase by between 12% and 15% in 2021. Advertising generates Roku an 80% profit margin and, given the encouraging user numbers announced recently, the company already holds more appeal for advertisers in 2021 than it did in 2020.
“…expecting the same type of performance we saw in 2020 moving forward is unrealistic” – Nathan Geraci, president of The ETF Store
However, the analyst community collectively doubts that ARKK can continue to grow, especially given forecasts suggesting that Tesla is overpriced (Dan Ives’ prediction aside). Median and low 12-month targets of $512.50 and $40 from CNN Money’s 34-analyst panel would see the stock losing 42% and 95.5%, respectively over the coming year. CNN Money’s polled analysts similarly expect Roku to lose money over the period, with the median target of $300 representing a fall of 25.6% from 26 January’s closing price.
With Ark displacing WisdomTree in the top 10 ETF issuers worldwide, thanks to the former’s focus on growth stocks in the turbulent conditions of 2020, a recovery from the coronavirus pandemic and return to “normal” conditions could spell bad news for the company. Nathan Geraci, president of The ETF Store, told Bloomberg that “expecting the same type of performance we saw in 2020 moving forward is unrealistic”.
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
