txhill wrote: ↑Mon Mar 29, 2021 11:28 am
ARK funds recently filed to change their prospectus. I find the changes highly concerning.
https://www.sec.gov/ix?doc=/Archives/ed ... -5_497.htm
Among other changes, the prospectuses are proposing to remove this language:
Each Fund will not invest more than 30% of its total assets in securities issued by a single company,
fund or of short-term financial products of such company.
Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a
single company or fund.
I take this to mean they are going to put even more into Tesla, or perhaps small market cap companies. Seems riskier and may result in further liquidity challenges for ARK. I would not go near it unless you fully understand the risks involved.
That's... impressive. Considering that
normally mutual funds do not invest in more than 10% of the total number of outstanding shares of any single company. They're already allowing themselves double what is allowed for a diversified fund, and they want to go past that?
I also see that although ARK does disclose the fact that it is a non-diversified fund, it seems to me to avoid doing so plainly. Compare the conspicuousness of these two portions of the factsheet. Right near the top, in big type, it's a great "tool for diversification."
The disclaimer--that it, itself, is
not diversified--is at the bottom in small grey print. And even there, it is buried! Even if you bothered to glance at the disclaimer, would you even notice the "non-diversification" language if you didn't already know it was there? Count seconds and see how long it takes you to find it.
For comparison, here's how a competitor's fund presents things. These screenshots are all equally scaled.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.