Renowned for her bold market prognostications, Cathie Wood, CEO of ARK Invest, has championed ambitious visions for assets like bitcoin and Tesla.
Earlier in the year, Wood positioned her flagship Ark Innovation Fund (ARKK) as a herald of the future, likening it to the "new Nasdaq" and casting it as a beacon for avant-garde tech investments.
Wood’s declaration, made during the fund's peak performance period, suggested that ARKK was set to eclipse the Nasdaq as the quintessential tech investment vehicle. Speaking to Bloomberg, Wood emphasized the unique composition of ARKK, which she felt housed a level of disruptive innovation not mirrored within the Nasdaq.
Yet, the trajectory of the ETF has since encountered turbulence. A stark contrast is evident when ARKK’s annual growth is measured against that of the Nasdaq 100—ARKK’s modest 12.3% appreciation falls short of the tech-heavy index’s robust 32% rally.
In a direct comparison, ARKK has experienced a 15% downtick for the year relative to the Nasdaq 100. This downturn is part of a continued pattern, following a 51% descent last year and a 40% shortfall the year before.
The ETF's struggles became particularly pronounced starting late July, amidst broader market volatility and the anticipation of persistently elevated interest rates.
The fund's performance was further affected as major holdings—including Tesla, Zoom, and Roku—witnessed declines. Tesla’s shares saw a 23% reduction in the latter half of the year, while Zoom and Roku slipped by approximately 12% and 8%, respectively.
Since mid-2018, ARKK has diminished by over 20%, leading financial analysts like Larry McDonald of the Bear Traps Report to critique the fund's long-term viability, going so far as to label it "dead money" as of his August remarks.
