This page was last updated 6-20-2021

You may have heard of Ark Invest and wondered if it was halal to invest in.

Ark Invest has a number of different ETFs which it actively manages. This article reveals what we are deeming the Halal Version of one of its most well known ETFs: ARK’s Genomic Revolution ETF.

ARK Genomic Revolution ETF

ArkG “Aims to provide exposure to DNA sequencing technology, gene editing, CRISPR, therapeutics, agricultural biology, and molecular diagnostics. These innovations can help us restructuring health care, agriculture, pharmaceuticals, and enhancing the quality of life.” [1]

Performance of ArkG

Since inception, ArkG has had quite an impressive run with annualized returns over the past 5 years reaching 40% compared to an annualized return of ~15% for the S&P 500 during the same period :

Since the aim of ArkG is inline with Islamic principles, and its performance has been rather good, it made sense for us at Practical Islamic Finance to analyze the stocks in this ETF to see if we can come up with a Halal version of it by excluding the stocks we weren’t comfortable with.

Halal Version of ArkG

The number of holdings in ArkG’s ETF currently stands at 56. For simplicity, we constructed the PIF Halal version of ArkG using the largest 10 holdings we were comfortable investing in from a halal perspective.

Of ARKG’s top ten holdings, only CareDx (CDNA) didn’t make the cut. As a result, we added Accolade (ACCD), ARKG’s 11th largest position, to our portfolio.

Holding No.CompanyTickerARKG WeightComfort LevelHalal ReportHalal Version Weight
1TELADOC HEALTHTDOC6.77%ComfortableTDOC16.2%
2EXACT SCIENCES CORPEXAS5.22%ComfortableEXAS12.5%
3CAREDX INCCDNA4.72%QuestionableCDNA0%
4PACIFIC BIOSCIENCES OF CALIFPACB4.34%ComfortablePACB10.4%
5REGENERON PHARMACEUTICALSREGN4.11%ComfortableREGN9.9%
6FATE THERAPEUTICS INCFATE3.88%ComfortableFATE9.3%
7NOVARTIS AG-SPONSORED ADRNVS3.87%ComfortableNVS9.3%
8VERTEX PHARMACEUTICALS INCVRTX3.63%ComfortableVRTX8.7%
9IONIS PHARMACEUTICALS INCIONS3.39%ComfortableIONS8.1%
10TWIST BIOSCIENCE CORPTWST3.32%ComfortableTWST8.0%
11ACCOLADE INCACCD3.14%ComfortableACCD7.5%
Building a Halal Version of ArkG

Backtesting Performance of Halal Version of ArkG

Return

The chart below shows the performance of the PIF’s Halal version of ArkG between July 2020 and May 2021.

Note: The time period was constrained by the available data for Accolade Inc (ACCD) which became a publicly traded stock in July 2020.

For comparison, the return of the S&P 500 was 33% during the same period.

Volatility

The Standard Deviation is a measure of how spread out the prices or returns of an asset are on average. It is the most widely used risk indicator in the field of investing and finance.

The Standard Deviation of returns for PIF’s Halal version of ArkG between January 2021 and June 2021 is around 28.29%.

For comparison, the standard deviation of the S&P 500 was 9.31% during the same period.

How to Invest

If you’re interested in investing in PIF’s halal version of ArkG, and you live in the United States, one easy option is to simply invest in the following pie (affiliate link).

If you’re outside the U.S., you can just use the table above to construct your own portfolio in whichever brokerage you prefer.

Before Investing, Important Disclaimers

Past performance is no guarantee of future results, which may vary.

Investing involves risk, including possible loss of principal.

The aforementioned returns do not reflect trading costs, transaction fees, or taxes.

The information on this page comes from a variety of sources we consider reliable, but we do not represent that the information is accurate or complete.

Nothing on this page is meant to constitute investment advice or recommendation, it is solely presented for informational purposes, and is not an offer to buy or sell any securities.

Sources

[1] ArkG Overview

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