Is Cathie Wood’s ARK Investment ETF Losing Steam?
The ARK Innovation ETF, founded by Cathie Wood, gained immense popularity in the years 2020 and 2021 for its focus on high-risk yet promising technology stocks. However, since its peak in February 2021, the ETF has faced a downward trend, with its value now barely above pandemic-era lows. What caused this shift, and what does it mean for investors who had faith in ARKK? Let’s explore how a significant investment made in ARKK in May 2021 would now stand in May 2024.
How Much Would a $1,000 ARKK Investment in May 2021 Have Lost?
If you had invested $1,000 in ARK Innovation ETF in May 2021, near its peak, the scenario today paints a grim picture of the fund’s performance:
- Three years ago, ARKK was in a correction phase after reaching its highs in early 2021.
- With an ETF price of $112.10 on May 28, 2021, your $1,000 investment would have fetched you 8.92 shares.
- As of May 31, 2024, the ARKK price has plummeted to $42.79, making your shares worth only $381.
- Thus, your $1,000 investment in ARKK would have resulted in a significant loss of $619, a staggering 61.9% decline.
ARKK’s Worst Trades
While ARK Innovation ETF’s top holdings, including Tesla and Roku, have faced market downturns, the fund’s performance has been marred by questionable trades:
- Between November 2022 and January 2023, Cathie Wood exited the ETF’s position in Nvidia, missing out on a significant recovery period for the chipmaker.
- Since January 2023, Nvidia shares have surged by 423.70%, further highlighting the missed opportunity.
- Recent trades, such as the purchase of 200,000 shares of UiPath in May 2024 before a major earnings report, resulted in a prompt 40% decline in PATH stock value.
Hot Take: Should You Stay Invested in ARK Innovation ETF?
As a crypto investor, the fall of ARK Innovation ETF raises concerns about the fund’s long-term viability and strategic decision-making. While past performance can’t guarantee future results, the recent missteps in trades and substantial losses for investors highlight the importance of thorough research and analysis before investing in high-risk assets like ARKK. Keep a close eye on the fund’s developments and consider diversifying your portfolio to mitigate risks amidst market uncertainties.
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