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IVE vs. ARKK: What’s The Difference?

The iShares S&P 500 Value ETF (IVE) and the ARK Innovation ETF (ARKK) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and ARKK is a ARK ETF Trust Mid-Cap Growth fund. So, what’s the difference between IVE and ARKK? And which fund is better?

The expense ratio of IVE is 0.57 percentage points lower than ARKK’s (0.18% vs. 0.75%). IVE also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IVE has provided lower returns than ARKK over the past 5 years.

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

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Summary

IVEARKK
NameiShares S&P 500 Value ETFARK Innovation ETF
CategoryLarge ValueMid-Cap Growth
IssueriSharesARK ETF Trust
AUM22.4B25.52B
Avg. Return11.68%55.45%
Div. Yield1.88%0.0%
Expense Ratio0.18%0.75%

The iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

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%.

IVE’s dividend yield is 1.88% higher than that of ARKK (1.88% vs. 0.0%). Also, IVE yielded on average 43.77% less per year over the past decade (11.68% vs. 55.45%). The expense ratio of IVE is 0.57 percentage points lower than ARKK’s (0.18% vs. 0.75%).

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Fund Composition

Industry Exposure

IVE vs. ARKK - Industry Exposure

IVEARKK
Technology9.41%30.5%
Industrials12.19%2.11%
Energy5.43%0.0%
Communication Services6.4%25.01%
Utilities4.82%0.0%
Healthcare15.4%29.47%
Consumer Defensive9.23%0.93%
Real Estate4.38%0.51%
Financial Services22.06%0.04%
Consumer Cyclical7.68%11.42%
Basic Materials2.99%0.0%

The iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

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%.

IVE is 22.02% more exposed to the Financial Services sector than ARKK (22.06% vs 0.04%). IVE’s exposure to Healthcare and Industrials stocks is 14.07% lower and 10.08% higher respectively (15.4% vs. 29.47% and 12.19% vs. 2.11%). In total, Real Estate, Utilities, and Energy also make up 14.12% more of the fund’s holdings compared to ARKK (14.63% vs. 0.51%).

Holdings

IVE - Holdings

IVE HoldingsWeight
Berkshire Hathaway Inc Class B3.05%
JPMorgan Chase & Co2.65%
The Walt Disney Co1.85%
Bank of America Corp1.67%
Johnson & Johnson1.57%
Exxon Mobil Corp1.41%
Pfizer Inc1.38%
Cisco Systems Inc1.35%
Verizon Communications Inc1.33%
Intel Corp1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

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%.

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Risk Analysis

IVEARKK
Mean Return1.050
R-squared92.080
Std. Deviation14.30
Alpha-2.90
Beta1.010
Sharpe Ratio0.830
Treynor Ratio11.410

The iShares S&P 500 Value ETF (IVE) has a Standard Deviation of 14.3 with a Alpha of -2.9 and a Sharpe Ratio of 0.83. Its Beta is 1.01 while IVE’s R-squared is 92.08. Furthermore, the fund has a Mean Return of 1.05 and a Treynor Ratio of 11.41.

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

IVE’s Mean Return is 1.05 points higher than that of ARKK and its R-squared is 92.08 points higher. With a Standard Deviation of 14.3, IVE is slightly more volatile than ARKK. The Alpha and Beta of IVE are 2.90 points lower and 1.01 points higher than ARKK’s Alpha and Beta.

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Performance

Annual Returns

IVE vs. ARKK - Annual Returns

YearIVEARKK
20201.24%152.52%
201931.71%35.73%
2018-9.09%3.58%
201715.19%87.38%
201617.17%-1.96%
2015-3.24%3.76%
201412.14%0.0%
201331.69%0.0%
201217.45%0.0%
2011-0.63%0.0%
201014.9%0.0%

IVE had its best year in 2019 with an annual return of 31.71%. IVE’s worst year over the past decade yielded -9.09% and occurred in 2018. In most years the iShares S&P 500 Value ETF provided moderate returns such as in 2014, 2010, and 2017 where annual returns amounted to 12.14%, 14.9%, and 15.19% 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

IVE vs. ARKK - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVE$10,000$16,36111.68%
ARKK$10,000$65,21855.45%

A $10,000 investment in IVE would have resulted in a final balance of $16,361. This is a profit of $6,361 over 5 years and amounts to a compound annual growth rate (CAGR) of 11.68%.

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%.

IVE’s CAGR is 43.77 percentage points lower than that of ARKK and as a result, would have yielded $48,857 less on a $10,000 investment. Thus, IVE performed worse than ARKK by 43.77% annually.


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