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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.

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Summary

VOOARKK
NameVanguard S&P 500 ETFARK Innovation ETF
CategoryLarge BlendMid-Cap Growth
IssuerVanguardARK ETF Trust
AUM753.41B25.52B
Avg. Return14.45%55.45%
Div. Yield1.34%0.0%
Expense Ratio0.03%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%).

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Fund Composition

Industry Exposure

VOO vs. ARKK - Industry Exposure

VOOARKK
Technology24.24%30.5%
Industrials8.86%2.11%
Energy2.84%0.0%
Communication Services11.14%25.01%
Utilities2.43%0.0%
Healthcare13.1%29.47%
Consumer Defensive6.32%0.93%
Real Estate2.58%0.51%
Financial Services14.2%0.04%
Consumer Cyclical12.01%11.42%
Basic Materials2.27%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 HoldingsWeight
Apple Inc5.92%
Microsoft Corp5.62%
Amazon.com Inc4.06%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.02%
Alphabet Inc Class C1.97%
Tesla Inc1.44%
Berkshire Hathaway Inc Class B1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.3%

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 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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Performance

Annual Returns

VOO vs. ARKK - Annual Returns

YearVOOARKK
202018.35%152.52%
201931.46%35.73%
2018-4.42%3.58%
201721.78%87.38%
201611.93%-1.96%
20151.35%3.76%
201413.63%0.0%
201332.33%0.0%
201215.98%0.0%
20112.09%0.0%
20100.0%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

FundInitial BalanceFinal BalanceCAGR
VOO$10,000$20,26914.45%
ARKK$10,000$65,21855.45%

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.


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