The SPDR S&P 500 ETF Trust (SPY) and the ARK Innovation ETF (ARKK) are both among the Top 100 ETFs. SPY is a SPDR State Street Global Advisors Large Blend fund and ARKK is a ARK ETF Trust Mid-Cap Growth fund. So, what’s the difference between SPY and ARKK? And which fund is better?
The expense ratio of SPY is 0.66 percentage points lower than ARKK’s (0.09% vs. 0.75%). SPY also has a lower exposure to the technology sector and a higher standard deviation. Overall, SPY has provided lower returns than ARKK over the past ten years.
In this article, we’ll compare SPY vs. ARKK. We’ll look at fund composition and annual returns, as well as at their performance and risk metrics. Moreover, I’ll also discuss SPY’s and ARKK’s holdings, industry exposure, and portfolio growth and examine how these affect their overall returns.
You can take a look at SPY vs. TQQQ for another great set of funds to own and build wealth.
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|Name||SPDR S&P 500 ETF Trust||ARK Innovation ETF|
|Category||Large Blend||Mid-Cap Growth|
|Issuer||SPDR State Street Global Advisors||ARK ETF Trust|
The SPDR S&P 500 ETF Trust (SPY) is a Large Blend fund that is issued by SPDR State Street Global Advisors. It currently has 374.03B total assets under management and has yielded an average annual return of 14.41% over the past 10 years. The fund has a dividend yield of 1.3% with an expense ratio of 0.09%.
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%.
Another great SPY comparison is SPY vs. PFF.
SPY’s dividend yield is 1.30% higher than that of ARKK (1.3% vs. 0.0%). Also, SPY yielded on average 41.04% less per year over the past decade (14.41% vs. 55.45%). The expense ratio of SPY is 0.66 percentage points lower than ARKK’s (0.09% vs. 0.75%).
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The SPDR S&P 500 ETF Trust (SPY) has the most exposure to the Technology sector at 24.22%. This is followed by Financial Services and Healthcare at 14.23% and 13.09% respectively. Utilities (2.45%), Real Estate (2.57%), and Energy (2.86%) only make up 7.88% of the fund’s total assets.
SPY’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.0%, and 13.09%.
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.
I have a related article on SPY vs. MUB that has a lot of break downs.
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%.
SPY is 6.28% less exposed to the Technology sector than ARKK (24.22% vs 30.5%). SPY’s exposure to Financial Services and Healthcare stocks is 14.19% higher and 16.38% lower respectively (14.23% vs. 0.04% and 13.09% vs. 29.47%). In total, Utilities, Real Estate, and Energy also make up 7.37% more of the fund’s holdings compared to ARKK (7.88% vs. 0.51%).
|Facebook Inc A||2.29%|
|Alphabet Inc A||2.02%|
|Alphabet Inc Class C||1.96%|
|Berkshire Hathaway Inc Class B||1.45%|
|JPMorgan Chase & Co||1.29%|
SPY’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.9%, 5.6%, 4.05%, 2.29%, and 2.02%.
Alphabet Inc Class C (1.96%), Berkshire Hathaway Inc Class B (1.45%), and Tesla Inc (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SPY’s holdings at 1.37% and 1.29%.
|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%.
The SPDR S&P 500 ETF Trust (SPY) has a Treynor Ratio of 14.12 with a Mean Return of 1.23 and a Standard Deviation of 13.56. Its Beta is 1 while SPY’s R-squared is 100. Furthermore, the fund has a Sharpe Ratio of 1.04 and a Alpha of -0.09.
The ARK Innovation ETF (ARKK) has a Mean Return of 0 with a Standard Deviation of 0 and a Beta of 0. Its Treynor Ratio is 0 while ARKK’s Alpha is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.
See SPY vs. XFL if you want to add more ETF’s to your portfolio.
SPY’s Mean Return is 1.23 points higher than that of ARKK and its R-squared is 100.00 points higher. With a Standard Deviation of 13.56, SPY is slightly more volatile than ARKK. The Alpha and Beta of SPY are 0.09 points lower and 1.00 points higher than ARKK’s Alpha and Beta.
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SPY had its best year in 2013 with an annual return of 32.21%. SPY’s worst year over the past decade yielded -4.45% and occurred in 2018. In most years the SPDR S&P 500 ETF Trust provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.53%, 14.93%, and 15.84% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in SPY would have resulted in a final balance of $20,181. This is a profit of $10,181 over 5 years and amounts to a compound annual growth rate (CAGR) of 14.41%.
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%.
I have a related article on SPY vs. TIP.
SPY’s CAGR is 41.04 percentage points lower than that of ARKK and as a result, would have yielded $45,037 less on a $10,000 investment. Thus, SPY performed worse than ARKK by 41.04% annually.
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