DIA vs. ARKK: What’s The Difference?

The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the ARK Innovation ETF (ARKK) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and ARKK is a ARK ETF Trust Mid-Cap Growth fund. So, what’s the difference between DIA and ARKK? And which fund is better?

The expense ratio of DIA is 0.59 percentage points lower than ARKK’s (0.16% vs. 0.75%). DIA also has a higher exposure to the financial services sector and a higher standard deviation. Overall, DIA has provided lower returns than ARKK over the past 5 years.

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

Summary

DIA ARKK
Name SPDR Dow Jones Industrial Average ETF Trust ARK Innovation ETF
Category Large Value Mid-Cap Growth
Issuer SPDR State Street Global Advisors ARK ETF Trust
AUM 30.46B 25.52B
Avg. Return 13.35% 55.45%
Div. Yield 1.61% 0.0%
Expense Ratio 0.16% 0.75%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

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%.

DIA’s dividend yield is 1.61% higher than that of ARKK (1.61% vs. 0.0%). Also, DIA yielded on average 42.10% less per year over the past decade (13.35% vs. 55.45%). The expense ratio of DIA is 0.59 percentage points lower than ARKK’s (0.16% vs. 0.75%).

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Fund Composition

Industry Exposure

DIA vs. ARKK - Industry Exposure

DIA ARKK
Technology 17.32% 30.5%
Industrials 16.7% 2.11%
Energy 2.0% 0.0%
Communication Services 4.42% 25.01%
Utilities 0.0% 0.0%
Healthcare 17.92% 29.47%
Consumer Defensive 6.3% 0.93%
Real Estate 0.0% 0.51%
Financial Services 20.68% 0.04%
Consumer Cyclical 13.44% 11.42%
Basic Materials 1.21% 0.0%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

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%.

DIA is 20.64% more exposed to the Financial Services sector than ARKK (20.68% vs 0.04%). DIA’s exposure to Healthcare and Technology stocks is 11.55% lower and 13.18% lower respectively (17.92% vs. 29.47% and 17.32% vs. 30.5%). In total, Utilities, Basic Materials, and Energy also make up 3.21% more of the fund’s holdings compared to ARKK (3.21% vs. 0.00%).

Holdings

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

ARKK - Holdings

ARKK Holdings Weight
Tesla Inc 9.56%
Roku Inc Class A 6.48%
Teladoc Health Inc 5.76%
Square Inc A 4.37%
Zoom Video Communications Inc 4.36%
Shopify Inc A 4.27%
Spotify Technology SA 3.68%
Twilio Inc A 3.66%
Coinbase Global Inc Ordinary Shares – Class A 3.65%
Unity Software Inc Ordinary Shares 3.41%

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%.

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Risk Analysis

DIA ARKK
Mean Return 1.13 0
R-squared 93.31 0
Std. Deviation 13.68 0
Alpha -0.94 0
Beta 0.97 0
Sharpe Ratio 0.94 0
Treynor Ratio 13.07 0

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Treynor Ratio of 13.07 with a Mean Return of 1.13 and a R-squared of 93.31. Its Standard Deviation is 13.68 while DIA’s Sharpe Ratio is 0.94. Furthermore, the fund has a Alpha of -0.94 and a Beta of 0.97.

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

DIA’s Mean Return is 1.13 points higher than that of ARKK and its R-squared is 93.31 points higher. With a Standard Deviation of 13.68, DIA is slightly more volatile than ARKK. The Alpha and Beta of DIA are 0.94 points lower and 0.97 points higher than ARKK’s Alpha and Beta.

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Performance

Annual Returns

DIA vs. ARKK - Annual Returns

Year DIA ARKK
2020 9.63% 152.52%
2019 25.09% 35.73%
2018 -3.6% 3.58%
2017 27.97% 87.38%
2016 16.28% -1.96%
2015 0.1% 3.76%
2014 9.88% 0.0%
2013 29.41% 0.0%
2012 10.04% 0.0%
2011 8.21% 0.0%
2010 13.87% 0.0%

DIA had its best year in 2013 with an annual return of 29.41%. DIA’s worst year over the past decade yielded -3.6% and occurred in 2018. In most years the SPDR Dow Jones Industrial Average ETF Trust provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 9.88%, 10.04%, and 13.87% respectively.

The year 2020 was the strongest year for ARKK, returning 152.52% on an annual basis. The poorest year for ARKK in the last ten years was 2016, with a yield of -1.96%. Most years the ARK Innovation ETF has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 3.58% respectively.

Portfolio Growth

DIA vs. ARKK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DIA $10,000 $19,671 13.35%
ARKK $10,000 $65,218 55.45%

A $10,000 investment in DIA would have resulted in a final balance of $19,671. This is a profit of $9,671 over 5 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

With a $10,000 investment in ARKK, the end total would have been $65,218. This equates to a $55,218 profit over 5 years and a compound annual growth rate (CAGR) of 55.45%.

DIA’s CAGR is 42.10 percentage points lower than that of ARKK and as a result, would have yielded $45,547 less on a $10,000 investment. Thus, DIA performed worse than ARKK by 42.10% annually.


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