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ETF darling of 2020 is ‘going through a lot of soul-searching’

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“‘I’ve never been in a market that is up — has appreciated — and our strategies are down…That has never happened before.’”

— Cathie Wood, CEO and founder Ark Investments

That’s Cathie Wood explaining, during a Bloomberg TV interview, the challenges the star fund manager has been facing in recent weeks, as her suite of technology-centric exchange-traded funds experience a swoon following a stellar performance in 2020.

At last check, the ARK Innovation ETF
ARKK,
-1.60%

was down 0.6% Friday, after a roughly 13% decline last week. and a more than 22% slide so far this year, according to Dow Jones Market Data. By comparison, the tech-heavy Nasdaq Composite Index
COMP,
+0.73%

is up almost 21%, the S&P 500 index
SPX,
+0.95%

is looking at a nearly 25% year-to-date advance, and the Dow Jones Industrial Average
DJIA,
+0.60%

was up by about 17% thus far in 2021.

The large-cap tech-heavy Nasdaq-100 index
NDX,
+1.13%

is up nearly 26% in the year to date.

“‘When we go through a period like this, of course we are going through soul-searching, saying ‘are we missing something?’”

— Wood

ARK’s seven ETFs returned an average of 141% in 2020, on the back of gains from companies such as Tesla Inc. TSLA, 0.37%, and Teladoc Health Inc. TDOC, -1.25%, cementing the investor’s clout on Wall Street.

However, her strategy of doubling down on losers and investing in disruptive technology hasn’t resulted in similarly strong returns this year—quite the contrary.

The flagship Ark Innovation fund is down 38% since its Feb. 15 peak, for example.

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