Summary Chances are if you are an ETF investor, you are familiar with ARK's active flagship product, the ARK Innovation ETF. It has been so successful, with $7.8 billion in assets, it has other ETFs betting against it and others levering it. The ARK Innovation Fund’s mantra is investing in companies relevant to the theme of disruptive innovation on an active, stock-picking basis. But given the ETF's recent performance woes, I propose XOUT as an alternative way of capturing disruption. The Disruption of ARKK

The ARK Innovation Fund (NYSEARCA:ARKK) is ARK Investment Management's flagship ETF with over $7.8 billion in assets under management. ARKK's fund objective is to invest in companies that capture the theme of disruptive innovation. What exactly is "disruptive innovation"? ARK defines disruptive innovation as the introduction of a technologically enabled new product or service that potentially changes the way the world works. Companies held in the ETF rely on or benefit from the development of new products or services, technological improvements, and advancements in scientific research relating to the areas of DNA technologies and Genomics, Automation, Robotics, and Energy Storage, Artificial Intelligence and the Next Generation Internet, and Fintech Innovation.

To ARK's credit, founder Cathie Wood has built an amazing research and investment platform tied to disruptive innovation. ARK's BIG IDEAS report, which began publishing in 2017, provides great insights into the firm's thinking, offering transparent insights into their active investment process. After a successful career as a hedge fund manager, co-founding NYC-based, Tupelo Capital Management, she moved on to joining AllianceBernstein as their Chief Investment Officer in 2001, where she worked for 12 years, managing $5 billion.

In 2014, after her idea for actively managed exchange-traded funds based on disruptive innovation was...

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