IAU vs. ARKK: What’s The Difference?

The iShares Gold Trust (IAU) and the ARK Innovation ETF (ARKK) are both among the Top 100 ETFs. IAU is a iShares N/A fund and ARKK is a ARK ETF Trust Mid-Cap Growth fund. So, what’s the difference between IAU and ARKK? And which fund is better?

The expense ratio of IAU is 0.50 percentage points lower than ARKK’s (0.25% vs. 0.75%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than ARKK over the past 5 years.

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

Summary

IAU ARKK
Name iShares Gold Trust ARK Innovation ETF
Category N/A Mid-Cap Growth
Issuer iShares ARK ETF Trust
AUM 28.61B 25.52B
Avg. Return 6.03% 55.45%
Div. Yield 0.0% 0.0%
Expense Ratio 0.25% 0.75%

The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.

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%.

IAU’s dividend yield is 0.00% lower than that of ARKK (0.0% vs. 0.0%). Also, IAU yielded on average 49.42% less per year over the past decade (6.03% vs. 55.45%). The expense ratio of IAU is 0.50 percentage points lower than ARKK’s (0.25% vs. 0.75%).

Fund Composition

Industry Exposure

IAU vs. ARKK - Industry Exposure

IAU ARKK
Technology 0.0% 30.5%
Industrials 0.0% 2.11%
Energy 0.0% 0.0%
Communication Services 0.0% 25.01%
Utilities 0.0% 0.0%
Healthcare 0.0% 29.47%
Consumer Defensive 0.0% 0.93%
Real Estate 0.0% 0.51%
Financial Services 0.0% 0.04%
Consumer Cyclical 0.0% 11.42%
Basic Materials 0.0% 0.0%

The iShares Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

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%.

IAU is 30.50% less exposed to the Technology sector than ARKK (0.0% vs 30.5%). IAU’s exposure to Industrials and Energy stocks is 2.11% lower and 0.00% lower respectively (0.0% vs. 2.11% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 11.97% less of the fund’s holdings compared to ARKK (0.00% vs. 11.97%).

Holdings

IAU - Holdings

IAU Holdings Weight
Gold 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.

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%.

Risk Analysis

IAU ARKK
Mean Return 0.23 0
R-squared 16.03 0
Std. Deviation 16.97 0
Alpha 4.16 0
Beta 0.48 0
Sharpe Ratio 0.13 0
Treynor Ratio 1.5 0

The iShares Gold Trust (IAU) has a Standard Deviation of 16.97 with a Beta of 0.48 and a Alpha of 4.16. Its Treynor Ratio is 1.5 while IAU’s Sharpe Ratio is 0.13. Furthermore, the fund has a R-squared of 16.03 and a Mean Return of 0.23.

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.

IAU’s Mean Return is 0.23 points higher than that of ARKK and its R-squared is 16.03 points higher. With a Standard Deviation of 16.97, IAU is slightly more volatile than ARKK. The Alpha and Beta of IAU are 4.16 points higher and 0.48 points higher than ARKK’s Alpha and Beta.

Performance

Annual Returns

IAU vs. ARKK - Annual Returns

Year IAU ARKK
2020 23.86% 152.52%
2019 18.54% 35.73%
2018 -1.39% 3.58%
2017 11.58% 87.38%
2016 8.85% -1.96%
2015 -11.65% 3.76%
2014 -0.44% 0.0%
2013 -27.96% 0.0%
2012 8.37% 0.0%
2011 8.66% 0.0%
2010 27.93% 0.0%

IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% 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

IAU vs. ARKK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IAU $10,000 $17,584 6.03%
ARKK $10,000 $65,218 55.45%

A $10,000 investment in IAU would have resulted in a final balance of $17,584. This is a profit of $7,584 over 5 years and amounts to a compound annual growth rate (CAGR) of 6.03%.

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%.

IAU’s CAGR is 49.42 percentage points lower than that of ARKK and as a result, would have yielded $47,634 less on a $10,000 investment. Thus, IAU performed worse than ARKK by 49.42% annually.


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