So today we’ve listed the first ever ETPs tracking Ark’s most popular strategies. These are available in long (+3x), short (-3x) and non-leveraged “Tracker” versions.
Full list is below - let me know if you have any questions. These were listed today, so I’m assuming normal trading should begin sometime tomorrow.
ETP Name
ISIN
Leverage Factor
Ticker
USD
GBx
EUR
LS ARKK Innovation Tracker ETP
XS2399369037
N/A
1ARK
ARKA
ARK1
LS ARKW NextGen Internet Tracker ETP
XS2399368575
N/A
1ARW
ARKB
ARW1
LS ARKG Genomic Tracker ETP
XS2399368062
N/A
1ARG
ARKC
ARG1
Leverage Shares 3x Long ARKK Innovation ETP
XS2399368658
3x
ARK3
3ARK
3ARE
Leverage Shares -3x Short ARKK Innovation ETP
XS2399368906
-3x
SARK
ARKS
SAKE
Leverage Shares 3x Long ARKW NextGen Internet ETP
XS2399368146
3x
ARW3
3ARW
3AKW
Leverage Shares -3x Short ARKW NextGen Internet ETP
What’s the total OCF - should it not be the synthetic OCF - ARK ETF fee plus the ETP fee quoted, so something like 1.1% for the 1x being 0.75% ARK ETF plus 0.35% ETP fee, and 3% for the 3x leveraged versions?
Also as these are relatively new, what would the expected tracking error be, especially on the 1x given this could be predicted from the past ARK ETF performance.
Exactly - what we do is physically go out and buy the underlying instrument. So let’s say for the ARKK Tracker, we go out and buy the US-listed ARKK ETF, which serves as collateral for the ETPs issued.
Fees: 1x Trackers: Yep, it’s the fees charged by the underlying + our annual management fee of 0.35%. We think it’s fair given the product structure, trading in 3 currencies, first time available in the EU bla bla… 3x Long: Fees on the underlying, 0.75% management fee and (current fed funds rate + 1.5%) annually. So yeah, all-in about 3% annually. FYI - current fed funds rate is about 0.08%.
My guess is - close to the management fee + 0.01% for transactions (buying/selling the underlying), so probably around 0.36%.
@flavius - yep, this is the main reason why you’ll see a discrepancy in the close price of the UK listed product vs that in the US. Since the US is open for another 4.5 hours after UK markets close, the chances of the two having the same close price isn’t high. The thing to check whether the product tracks the underlying as expected is to check the ETP’s NAV (published on the product page on our site).
Here’s another example with the Nasdaq-100 ETF in the US ($QQQ) compared with its UK counterpart ($EQQQ):
Hey @GargoyleBG. The intraday pricing you see is done by an independent market maker(s), so there are multiple reasons that can lead to this (volatility on underlying, overnight drop after US markets close, etc.). Please keep in mind that if you trade in GBx/EUR, this could also have an impact since there is no currency hedging.
You can check the NAV on the product page to gauge its performance and compare to the underlying.
It’s the NAV that’s shown on the product page, not closing price. This weird ‘pricing’ you see on-screen should improve once volume picks up on this newly listed ETP. In case you aren’t sure if it tracks as intended, I’d suggest that you wait until there’s more historical data.
It definitely seems better than before but still a bit hit and miss. Both of these screenshots were taken right after the US open on 7th Jan, I’ll try and get some updated ones this week. I’m guessing as these products are pretty new the spreads will narrow to some degree overtime as the volume picks up
