In 2020, Cathie Wood made a name for herself with the remarkable performance of her flagship ETF, ARK Innovation (ARKK), which saw returns of 149%. Despite this success, Wood’s long-term track record has been inconsistent, leading Morningstar to label her as the third-greatest ‘wealth destroyer’.
Recent analysis by Finbold revealed that an investment of $1,000 near ARKK’s 2021 peaks would have decreased by 61.9% to less than $300. With such drastic fluctuations in performance over the years, the question arises whether investing in ARK Innovation ETF at the beginning of 2024 would have been worthwhile.
Although ARKK experienced significant volatility in the first half of 2024, the overall trend has been a decline. Starting the year at $51.8, the fund now stands at $43.37, marking a 16.27% decrease year-to-date (YTD).
If an investor had purchased $1,000 worth of ARKK on January 2, 2024, they would have acquired 19.3 shares. By June 21, these shares would be valued at $837.26, resulting in a loss of nearly $163.
The poor performance of ARKK can be attributed to its major holdings such as Tesla Motors, which has struggled for nearly a year amidst the EV winter. Similarly, Roku Inc. has performed even worse in the stock market, down 39.70% since the start of the year. On the other hand, Coinbase has benefited from the crypto market rally, rising 49.82% since January 2.
Despite its focus on disruptive technologies, ARKK lacks significant holdings in artificial intelligence (AI) companies, with only Palantir making the list. While Palantir has shown strong performance in 2024, it is not the top AI performer of the year.
Investing in stocks carries risks, and individuals should exercise caution when making investment decisions.
