ARK ETPs by Leverage Shares

Hey Guys,

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 XS2399368492 -3x ARWS SARW SRWE
Leverage Shares 3x Long ARKG Genomic ETP XS2399367767 3x ARG3 3ARG 3AKE
Leverage Shares -3x Short ARKG Genomic ETP XS2399367841 -3x ARGS SARG ARGE

For professional investors only. Capital at risk.

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Good news, @Oktay .

And a -1x version of the ARK ETPs (this way, LS will have all the directions hedged, 3x vs -3x and 1x vs -1x)? :wink:

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I’m glad that the 1x versions are included also.

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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.

Thanks!

1x ARKK is just soooo last year. Haven’t you followed, 1x is out and -1x is in?? Cathie is a has-been now!

Ahem Peter Lynch’s investors averaging -11% per annum returns from buying high and selling low

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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%.

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I know it’s not loved now. And will probably drop some more. But it won’t be like this forever.

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Kinda’s my point yeah.

If anyone is indeed interested in Cathie’s team’s philosophy and research, unloved and out of hype is definitely the time to buy 🤷

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Hi,

Is anything able to done with MM’s on these for a tighter spread, some have a spread of 2-3% which is pretty steep for day trading/short term.

Thanks

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Hey,

Thanks for letting me know - let me speak with the MM and get some info. Some things to consider:

  • Spreads are generally wider before US markets open (since underlying assets trade there)
  • They tend to improve as liquidity picks up in US pre-market trading (which start at 9AM UK time)

Thanks!


Examples of what I mean about the spreads, both screenshots taken at 14:47 UK time.

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Why is there such a big difference between the ARKK and 1ARK?

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Probably because ARKK is trading in US market hours that close later than 1ARK traded in UK/European market hours.

But @Oktay could give a better explanation.

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Thanks for the tag @RLX :slight_smile:

@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):

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Why intraday performance of ARK1, ARW1, ARG1/I am monitoring for a few days/ is always reported as negative?

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.

I don’t see NAV, that looks like closing price: As of 31/12/2021 $4.94 on 1ARK with current $5.13 price it should show performance +3.85%, not -6.90%

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.

@R_16 - have you seen an improvement in the spreads? I just checked a few mins ago (14:49 UK time):

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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


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