Thanks to BTC, a couple of Cathie Wood funds are about to flash A month ago Morningstar identified the ARK Innovation Fund (ARKK) as one of the largest wealth destroyers in the fund industry, with the ETF losing $7.1 billion in investors' wealth over the past decade due to its strategy of using leverage to bet against the Nasdaq-100 (NDX).
Additionally, the ARK Genomic Revolution ETF (ARKG) has shredded $4.2 billion in wealth over the same period, making it another significant underperformer within the ARK family of funds. Despite the poor performance, ARK Innovation has continued to attract investors, who pay a 0.75% annual fee, illustrating that even during favorable market conditions, there is no any guarantee of success in investing.
Ark Invest as well as lady Wood was all the rage in 2020 and 2021, when its concentrated bets on highly speculative, mostly unprofitable technology companies paid off in a big way thanks to low interest rates, monetary stimulus and a boom in risk appetite among retail investors.
The ARKK ETF destroyed $7.1 billion in wealth, while its healthcare-focused ARK Genomic ETF destroyed $4.2 billion in wealth, according to Morningstar.
Across all fund families that have destroyed wealth over the past decade, Ark Invest topped the list — and its losses with ARKK and ARKG were more than double the next firm on the list.
Despite the massive wealth destruction, ARK Invest as a business is doing just fine. The investment company still has more than $13 billion in assets across its suite of all ETFs, signaling that not all investors have abandoned Wood's investment strategy.
While the biggest value destroyers in the fund industry provide a valuable case study in how not to invest, and illustrate that there's no guarantee of success, even during a generally favorable market environment, let's take a look will recent spot BTC ETFs launch change the game or not.
Cathie Wood’s Ark Investment Management LLC is snapping up shares of the firm’s just-launched spot-Bitcoin ETF as competition among the inaugural issuers escalates.
A consistent bid from its sister fund could help give ARKB a leg-up in a highly competitive environment for spot-Bitcoin exchange-traded funds. The Securities and Exchange Commission allowed 10 such ETFs to launch on January 11, 2024, preventing any one of them from gaining first-mover advantage.
That has set up an unusually high-stakes horse race, given that all the funds hold the same underlying asset.
Funneling the firm’s own money into an ETF is one way to gain scale quickly — an important criteria for financial advisers and platforms, many of which have minimum-asset thresholds, according to Bloomberg Intelligence.
Who knows what is next.
But still it works so far, as ARK Fintech Innovation ETF (ARKF) with solid 13.84% stake on Coinbase NASDAQ:COIN , as well as ARK Next Generation Internet ETF (ARKW) with its massive 20% Double Powered 'Coinbase+BTC' cannon, both are on positive path in 2024.
Technical graphs for ARK Fintech Innovation ETF AMEX:ARKF (upper chart) and ARK Next Generation Internet ETF AMEX:ARKW (lower chart), thanks to recent gains in BTCUSD and Coinbase (COIN), indicates on potential Reversed Head-and-Shoulders price pattern development, being topped off with huge weekly EMA(200) breakthrough in both cases.
