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ARKK vs. VOE: What’s The Difference?

The ARK Innovation ETF (ARKK) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. ARKK is a ARK ETF Trust Mid-Cap Growth fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between ARKK and VOE? And which fund is better?

The expense ratio of ARKK is 0.68 percentage points higher than VOE’s (0.75% vs. 0.07%). ARKK also has a higher exposure to the technology sector and a lower standard deviation. Overall, ARKK has provided higher returns than VOE over the past 5 years.

In this article, we’ll compare ARKK vs. VOE. We’ll look at industry exposure and fund composition, as well as at their holdings and annual returns. Moreover, I’ll also discuss ARKK’s and VOE’s performance, portfolio growth, and risk metrics and examine how these affect their overall returns.

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Summary

ARKKVOE
NameARK Innovation ETFVanguard Mid-Cap Value Index Fund ETF Shares
CategoryMid-Cap GrowthMid-Cap Value
IssuerARK ETF TrustVanguard
AUM25.52B26.78B
Avg. Return55.45%12.52%
Div. Yield0.0%1.87%
Expense Ratio0.75%0.07%

The ARK Innovation ETF (ARKK) is a Mid-Cap Growth fund that is issued by ARK ETF Trust. It currently has 25.52B total assets under management and has yielded an average annual return of 55.45% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.75%.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.

ARKK’s dividend yield is 1.87% lower than that of VOE (0.0% vs. 1.87%). Also, ARKK yielded on average 42.93% more per year over the past decade (55.45% vs. 12.52%). The expense ratio of ARKK is 0.68 percentage points higher than VOE’s (0.75% vs. 0.07%).

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Fund Composition

Industry Exposure

ARKK vs. VOE - Industry Exposure

ARKKVOE
Technology30.5%9.85%
Industrials2.11%9.4%
Energy0.0%5.69%
Communication Services25.01%5.27%
Utilities0.0%10.93%
Healthcare29.47%7.04%
Consumer Defensive0.93%4.85%
Real Estate0.51%11.48%
Financial Services0.04%18.26%
Consumer Cyclical11.42%11.8%
Basic Materials0.0%5.44%

The ARK Innovation ETF (ARKK) has the most exposure to the Technology sector at 30.5%. This is followed by Healthcare and Communication Services at 29.47% and 25.01% respectively. Utilities (0.0%), Energy (0.0%), and Financial Services (0.04%) only make up 0.04% of the fund’s total assets.

ARKK’s mid-section with moderate exposure is comprised of Real Estate, Consumer Defensive, Industrials, Consumer Cyclical, and Communication Services stocks at 0.51%, 0.93%, 2.11%, 11.42%, and 25.01%.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.

VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.

ARKK is 20.65% more exposed to the Technology sector than VOE (30.5% vs 9.85%). ARKK’s exposure to Healthcare and Communication Services stocks is 22.43% higher and 19.74% higher respectively (29.47% vs. 7.04% and 25.01% vs. 5.27%). In total, Utilities, Energy, and Financial Services also make up 34.84% less of the fund’s holdings compared to VOE (0.04% vs. 34.88%).

Holdings

ARKK - Holdings

ARKK HoldingsWeight
Tesla Inc9.56%
Roku Inc Class A6.48%
Teladoc Health Inc5.76%
Square Inc A4.37%
Zoom Video Communications Inc4.36%
Shopify Inc A4.27%
Spotify Technology SA3.68%
Twilio Inc A3.66%
Coinbase Global Inc Ordinary Shares – Class A3.65%
Unity Software Inc Ordinary Shares3.41%

ARKK’s Top Holdings are Tesla Inc, Roku Inc Class A, Teladoc Health Inc, Square Inc A, and Zoom Video Communications Inc at 9.56%, 6.48%, 5.76%, 4.37%, and 4.36%.

Shopify Inc A (4.27%), Spotify Technology SA (3.68%), and Twilio Inc A (3.66%) have a slightly smaller but still significant weight. Coinbase Global Inc Ordinary Shares – Class A and Unity Software Inc Ordinary Shares are also represented in the ARKK’s holdings at 3.65% and 3.41%.

VOE - Holdings

VOE HoldingsWeight
Carrier Global Corp Ordinary Shares1.28%
International Flavors & Fragrances Inc1.13%
Motorola Solutions Inc1.12%
Discover Financial Services1.09%
Welltower Inc1.05%
Corteva Inc0.99%
Valero Energy Corp0.97%
Corning Inc0.95%
Willis Towers Watson PLC0.9%
D.R. Horton Inc0.89%

VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.

Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.

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Risk Analysis

ARKKVOE
Mean Return01.05
R-squared088.76
Std. Deviation015.98
Alpha0-3.77
Beta01.11
Sharpe Ratio00.75
Treynor Ratio010.19

The ARK Innovation ETF (ARKK) has a Sharpe Ratio of 0 with a Alpha of 0 and a Beta of 0. Its Standard Deviation is 0 while ARKK’s R-squared is 0. Furthermore, the fund has a Mean Return of 0 and a Treynor Ratio of 0.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Mean Return of 1.05 with a R-squared of 88.76 and a Standard Deviation of 15.98. Its Treynor Ratio is 10.19 while VOE’s Beta is 1.11. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Alpha of -3.77.

ARKK’s Mean Return is 1.05 points lower than that of VOE and its R-squared is 88.76 points lower. With a Standard Deviation of 0, ARKK is slightly less volatile than VOE. The Alpha and Beta of ARKK are 3.77 points higher and 1.11 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

ARKK vs. VOE - Annual Returns

YearARKKVOE
2020152.52%2.5%
201935.73%27.98%
20183.58%-12.41%
201787.38%17.05%
2016-1.96%15.26%
20153.76%-1.8%
20140.0%13.98%
20130.0%37.65%
20120.0%16.04%
20110.0%-0.32%
20100.0%21.83%

ARKK had its best year in 2020 with an annual return of 152.52%. ARKK’s worst year over the past decade yielded -1.96% and occurred in 2016. In most years the ARK Innovation ETF provided moderate returns such as in 2011, 2010, and 2018 where annual returns amounted to 0.0%, 0.0%, and 3.58% respectively.

The year 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

ARKK vs. VOE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
ARKK$10,000$65,21855.45%
VOE$10,000$15,50112.52%

A $10,000 investment in ARKK would have resulted in a final balance of $65,218. This is a profit of $55,218 over 5 years and amounts to a compound annual growth rate (CAGR) of 55.45%.

With a $10,000 investment in VOE, the end total would have been $15,501. This equates to a $5,501 profit over 5 years and a compound annual growth rate (CAGR) of 12.52%.

ARKK’s CAGR is 42.93 percentage points higher than that of VOE and as a result, would have yielded $49,717 more on a $10,000 investment. Thus, ARKK outperformed VOE by 42.93% annually.


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