ARK Innovation ETF
has been on the rise following the announcement that the
will rebalance the weightings of its constituents.
On July 7, Nasdaq announced that the
index will be undergoing a “Special Rebalance” before the market opens on July 24. This rebalance is meant to address “overconcentration in the index” following major gains of the “big seven” megacap tech stocks, including
ARK Innovation (ticker: ARKK) is mostly made up of smaller, unprofitable tech stocks, including
(DKNG). The only two stocks in ARK Innovation that are a part of the big seven megacap names are
(TSLA), which holds the most weight in the ETF, and
These large-cap tech stocks have surged this year as investors have bought up shares of companies with exposure to artificial intelligence.
With the rebalancing of the Nasdaq 100, indexers will have to sell some of their holdings in the largest-cap stocks, and add to their positions in smaller-cap names. Shares of Apple were down 0.3% Tuesday while Microsoft dropped 1% and Tesla declined 0.2%. Components of ARK Innovation were trading higher, helping Wood’s portfolio.
Zoom Video Communications
(ZM) gained 2.2%,
(SQ) rose 2.8%, and
(PATH) was 3.5% higher.
ARK Innovation had risen 1.2% on Tuesday to $45.90, and was on pace for its highest close since August 2022, according to Dow Jones Market Data. The ETF was up for three consecutive days, or 6.2% over this period.
Write to Angela Palumbo at email@example.com