He helped clinch the top two spots on Morningstar‘s best performing ETFs last quarter, and now Ark Invest’s Brett Winton is looking to do it again with extensive exposure to Big Tech and aerospace.
Winton helps set strategy for the No. 1 ranked Ark Innovation ETF (ARKK) and runner-up Ark Space Exploration & Innovation ETF (ARKX).
“We are in the earliest stages of a massive technological transformation here,” the firm’s chief futurist told CNBC’s “ETF Edge” this week. “There’s going to be bumps along the road, but we think the right thing to do is to lean into innovation over the long term.”
The Ark Innovation ETF gained 48% last quarter. As of Tuesday’s close, it’s up 275% since its October 2014 launch. The firm’s website describes the ETF as an actively managed fund that looks for cutting-edge advancements that have “real-world, practical implications for people.”
He cited Tesla‘s June launch of its robotaxi program in Austin, Texas as an example.
“People didn’t think they were going to be able to do it, and the assets are on the ground and operating,” Winton said. “We think that’s going to be an incredibly valuable network.”
The electric vehicle maker is the Ark Innovation ETF top holding, followed by Coinbase, Roku and Roblox, according to the firm’s website on Tuesday.
Winton is particularly bullish on infrastructure for artificial intelligence.
‘AI that’s mind-blowing’
“I think we’re in the first pitch… We’re still in warmups. We’re still singing the national anthem here. The investment in AI data centers is going to explode,” Winton said. “They’re going to build data centers that are 10x the size of the current largest data centers, and that’s going to yield a performance advance in AI that’s mind-blowing even relative to what’s available today.”
Morningstar’s second best-performing ETF of the second quarter is the Ark Space Exploration & Innovation ETF, which gained 36% last quarter and is up 26% since its March 2021 launch.
The space-themed fund’s top holdings as of June 30 are Kratos, Rocket Lab, Iridium Communications, AeroVironment and Archer Aviation, according to Ark Invest.
“ARKX [Ark Space Exploration & Innovation ETF] … performed very well because people are beginning to realize you need to invest in these technologies and capabilities in order to compete in the world,” Winton said.
Ark Invest is also placing bets on fintech stocks.
Winton said there’s “no question” that developments like cryptocurrency and digital wallets will reshape the financial landscape. He also helps build strategy for the Ark Fintech Innovation ETF (ARKF), which is up 45% so far this year. Its top holdings are Shopify, Robinhood and Coinbase Global.
“I anticipate that you’ll see a number of traditional financial institutions finally bend the knee and say, ‘Hey, we need to adopt some of these technologies,’ because it’s no longer adequate or sufficient to offer consumers their money three to five days later when they want to transfer it from place to place,” Winton said.