Cathie Wood earned her laurels in 2020 when her flagship exchange-traded fund (ETF), the technology-focused ARK Innovation (ARKK), recorded returns of 149%.
While such growth earned Wood a formidable reputation, and her companies garnered great popularity and support, the longer-term performance has been substantially more checkered. So checkered, in fact, that Morningstar dubbed her the third-greatest ‘wealth destroyer.’
Indeed, back in May, Finbold calculated that a $1,000 investment made near ARKK’s peaks in 2021 would have depreciated a shocking 61.9% and be worth less than $300.
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Still, between stellar returns such as those recorded in 2020 and the calamitous downturns in multiple other years, the question remains if investing in ARK Innovation ETF at the start of 2024 would have been worth it.
How much would a 2024 ARKK investment have returned?
Though ARKK has been trading with significant volatility throughout the first half of 2024, the movements ultimately resulted in a substantial decline. The fund started the year at $51.8 and today, at the time of publication, stands at $43.37, meaning it is 16.27% in the red year-to-date (YTD).
An investment worth $1,000 and made on January 2, 2024, would have bought 19.3 shares. These shares would, by June 21, be worth $837.26, meaning that a hopeful ARKK trader would have lost nearly $163.
Why is ARKK down?
A closer look at ARKK’s largest holdings reveals why the ETF has been offering such a miserable performance in the first half of 2024 – especially given that the broader market, if judged using the S&P 500 benchmark index, has been doing exceptionally well.
ARKK’s biggest holding, Tesla Motors (NASDAQ: TSLA), has been struggling for almost a full year amid what is frequently referred to as the EV winter. Indeed, Elon Musk’s car company was at one point the worst-performing S&P 500 stock and remains 26.91% in the red YTD.
The third-biggest holding, Roku Inc. (NASDAQ: ROKU) recorded an even worse stock market performance and is down 39.70% since the year started.
The second-biggest holding – the cryptocurrency exchange Coinbase (NASDAQ: COIN) – however, helped mitigate the downside as the crypto market rally helped it rise 49.82% since January 2.
A surprising aspect of ARKK – especially given its focus on ‘disruptive’ technologies – is the near-total absence of artificial intelligence (AI) companies among its top holdings. Indeed, only Palantir (NASDAQ: PLTR) is present on the list, and it, while being a strong performer in 2024, is far from the biggest AI grower of the year.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
