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ARK Innovation ETF experienced a classic boom and bust cycle from 2020-2022, similar to historical market bubbles. Post-bust, ARKK is trading within its pre-mania range, indicating a return to the mean. The ETF is unlikely to recover quickly and may struggle for an extended period.
I would lean on the ETF that's led by some of the world's most time-tested and financially stable companies.
eToro Group Ltd and Cathie Wood's ARK Invest have teamed up to create a new portfolio focused on technology and innovation. The ARK-FutureFirst Smart Portfolio aims to provide retail investors with access to companies at the forefront of groundbreaking technologies.
On finance Twitter, FinTwit for short, Cathie Wood's ARK Innovation ETF (ARKK) gets a lot of flack, some of it rightfully so.
Tech powerhouses Apple, Microsoft, and Nvidia form over 35% of the Vanguard Growth ETF. ARK Innovation ETF's 0.75% expense ratio costs investors far more in fees than cheaper options.
ARKK has underperformed significantly, with its top 5 holdings showing weak growth expectations compared to the Nasdaq's top holdings like Nvidia and Microsoft. The fund's heavy reliance on a few underperforming stocks, particularly Tesla, Roku, and Roblox, has been a major drag on returns. ARKK's companies have lower gross and profit margins compared to the more consolidated and profitable Nasdaq top 5.
It is always fun to root for the underdog. Who doesn't like a good Cinderella story?
Cathie Wood‘s ARK Innovation ETF ARKK was once the darling of the market, boasting bold bets on disruptive technologies and promising massive returns.
The ETF has returned an average annual gain of 9.7%. But the annual return for investors is -17%.
As expected, the ARK Innovation ETF ARKK has faced significant losses, down 14% over the past week. ARKK is losing its positive correlation to long-term bonds, likely as the odds of a soft landing decline. Most holdings in ARKK are tied to equity financing needs, which may become difficult as more investors look to increase their cash allocations.