Once famed for its 149% rise in 2020, Cathie Wood’s flagship exchange-traded fund (ETF), ARK Innovation (ARKK), has been struggling to find its footing since.
The generally lackluster and sometimes disastrous performance of the fund has earned Wood the nickname ‘wealth destroyer’ in some circles, and the returns accrued through the 2024 bull market do not appear to change the situation.
To be precise, after managing a strong rally in late 2023, ARKK ETF has mostly been either trading sideways or declining through 2024. ARKK price today, at press time, stands at $47.88, meaning that the fund is down 5.19% in the year-to-date (YTD) chart by September 30.
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ARKK a major disappointment amidst the 2024 bull market
Such performance stands out in particular due to the general strength of the U.S. stock market in 2024.
Indeed, while investors who entrusted their investments to Wood would have lost some 5% of the ventured wealth, those who took Buffett’s advice for a simple strategy and poured money into the S&P 500 would have been up 20.99% by press time on September 30.
Similarly, traders who elected to track one of the other major indices, such as the Nasdaq 100 or Dow Jones Industrial Average, would have seen returns between 12.19% and 20.94% in the first nine months of the year.
Could ARKK still impress in Q4 2024?
Though ARKK’s 2024 problems are the result of the ETF’s largest positions such as Tesla (NASDAQ: TSLA), Block (NYSE: SQ), and Roblox (NYSE: RBLX), they may also hold promise that the fund’s fortunes will reverse in the final quarter (Q4).
Tesla in particular could help Ark Innovation experience a year’s end rally. Not only is the electric vehicle (EV) maker the ETF’s single biggest holding, but may soon see a stock market surge provided the October 10 ‘Robotaxi’ event proves a resounding success.
Such a notion is lent further credence by TSLA stock’s recent rally, which saw it rise 23.89% in the last 30 days – enough to ensure that Elon Musk’s EV maker is once again in the green in the YTD chart.
Other major ARKK holdings, such as Palantir (NYSE: PLTR) have also been experiencing a strong rally through much of September. PLTR, for example, rose from September lows of $30.16 to its Friday, September 28 closing price of $36.84, thanks to continued artificial intelligence (AI) optimism and the inclusion in the S&P 500 index.
