VOO vs. ARKK: What’s The Difference?

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

The expense ratio of VOO is 0.72 percentage points lower than ARKK’s (0.03% vs. 0.75%). VOO also has a lower exposure to the technology sector and a higher standard deviation. Overall, VOO has provided lower returns than ARKK over the past ten years.

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

Summary

VOO ARKK
Name Vanguard S&P 500 ETF ARK Innovation ETF
Category Large Blend Mid-Cap Growth
Issuer Vanguard ARK ETF Trust
AUM 753.41B 25.52B
Avg. Return 14.45% 55.45%
Div. Yield 1.34% 0.0%
Expense Ratio 0.03% 0.75%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

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%.

VOO’s dividend yield is 1.34% higher than that of ARKK (1.34% vs. 0.0%). Also, VOO yielded on average 41.00% less per year over the past decade (14.45% vs. 55.45%). The expense ratio of VOO is 0.72 percentage points lower than ARKK’s (0.03% vs. 0.75%).

Fund Composition

Industry Exposure

VOO vs. ARKK - Industry Exposure

VOO ARKK
Technology 24.24% 30.5%
Industrials 8.86% 2.11%
Energy 2.84% 0.0%
Communication Services 11.14% 25.01%
Utilities 2.43% 0.0%
Healthcare 13.1% 29.47%
Consumer Defensive 6.32% 0.93%
Real Estate 2.58% 0.51%
Financial Services 14.2% 0.04%
Consumer Cyclical 12.01% 11.42%
Basic Materials 2.27% 0.0%

The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.

VOO’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%, 12.01%, and 13.1%.

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%.

VOO is 6.26% less exposed to the Technology sector than ARKK (24.24% vs 30.5%). VOO’s exposure to Financial Services and Healthcare stocks is 14.16% higher and 16.37% lower respectively (14.2% vs. 0.04% and 13.1% vs. 29.47%). In total, Utilities, Real Estate, and Energy also make up 7.34% more of the fund’s holdings compared to ARKK (7.85% vs. 0.51%).

Holdings

VOO - Holdings

VOO Holdings Weight
Apple Inc 5.92%
Microsoft Corp 5.62%
Amazon.com Inc 4.06%
Facebook Inc Class A 2.29%
Alphabet Inc Class A 2.02%
Alphabet Inc Class C 1.97%
Tesla Inc 1.44%
Berkshire Hathaway Inc Class B 1.44%
NVIDIA Corp 1.37%
JPMorgan Chase & Co 1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

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%.

Performance

Annual Returns

VOO vs. ARKK - Annual Returns

Year VOO ARKK
2020 18.35% 152.52%
2019 31.46% 35.73%
2018 -4.42% 3.58%
2017 21.78% 87.38%
2016 11.93% -1.96%
2015 1.35% 3.76%
2014 13.63% 0.0%
2013 32.33% 0.0%
2012 15.98% 0.0%
2011 2.09% 0.0%
2010 0.0% 0.0%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% 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

VOO vs. ARKK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $20,269 14.45%
ARKK $10,000 $65,218 55.45%

A $10,000 investment in VOO would have resulted in a final balance of $20,269. This is a profit of $10,269 over 5 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

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%.

VOO’s CAGR is 41.00 percentage points lower than that of ARKK and as a result, would have yielded $44,949 less on a $10,000 investment. Thus, VOO performed worse than ARKK by 41.00% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply