Guggenheim Investments and ARK Investment Management have teamed up to launch a new Unit Investment Trust (UIT) focused on making early stage investments in disruptive technology companies.
The ARK Early Stage Disruptors portfolio, which launched on Tuesday, invests in companies involved in DNA sequencing, robotics, energy storage, artificial intelligence and blockchain technology, according to the Guggenheim website and several recent filings with the Securities and Exchange Commission (SEC).
The companies held by the trust are primarily small-cap US companies. Its initial holdings include cloud computing companies, companies that work in genome editing and 3D printers, according to the Guggenheim website.
It does not and will not include direct or indirect exposure to cryptocurrencies, according to SEC records.
ARK will serve as the trust’s portfolio consultant and recommend securities to Guggenheim, according to documents filed with the SEC. The portfolio consists of 25 stocks, most of which are also in ARK’s own ETFs, such as ARK Innovation ETF (ARKK) and ARKG Genomic Revolution ETF (ARKG). For example, ITU’s two biggest holdings as of Wednesday were biotech companies Invitae Corp. and Pacific Biosciences of California. Both companies account for around 7% of the trust and appear with lower weights in ARKK and ARKG.
Guggenheim and ARK did not immediately respond to requests for comment on the trust, which has an initial life of two years, according to SEC documents and the Guggenheim website.
Performance data for the trust’s first round won’t be available until early September, according to the Guggenheim website. Its initial offer price was $ 10 per unit, which rose to $ 10.08 on Wednesday.
Guggenheim, which manages around $ 255 billion, already has a range of dozens of such mutual funds, which it offers to investors alongside mutual funds and ETFs, according to the company’s website. These vehicles are generally offered at the request of a small number of customers.
ARK, led by CEO and portfolio manager Cathie Wood, has been making waves over the past year thanks to massive returns in 2020. The company’s flagship fund, ARKK, however weakened in the first half of 2021, however. and Wood’s success in 2020 drew a backlash with some investors questioning the likelihood of future returns given the high valuations of some key holdings. Earlier this week, Tuttle Capital Management launched a counter ETF that allows investors to short the main ARK strategy.