Arkk News: Ark Innovation ETF Performance and Market Trends

The Ark Innovation ETF has been a game-changer for investors looking to tap into the growth of innovative companies. Its performance has been impressive, with a 1-year return of 140%.

The ETF has consistently outperformed the broader market, with a 3-year return of 240% compared to the S&P 500's 70%. This is a testament to the fund's ability to identify and invest in companies that are driving innovation.

One of the key drivers of the ETF's success has been its focus on companies with high growth potential, such as Tesla and Square. These companies have been major contributors to the fund's returns, with Tesla accounting for over 10% of the ETF's holdings.

The market trends that are driving the success of the Ark Innovation ETF are centered around the rise of electric vehicles, fintech, and biotechnology. These sectors are expected to continue growing in the coming years, making them attractive investment opportunities.

Coinbase stock is the top holding at Ark Innovation and across Cathie Wood's ETFs at Ark Invest, and it's had a rough start to 2024, retreating 28.3% in January.

The stock had skyrocketed 391% last year, but that's now being followed by sell-the-news selling in bitcoin, which rebounded powerfully last year in anticipation of the SEC approving spot bitcoin ETFs.

Coinbase and other bitcoin stocks have moved with the digital currency, which finally got approval from the SEC on January 10, leading several bitcoin ETFs to begin trading on January 11.

Zoom Video stock is another holding in Cathie Wood's ETFs, and it's down 4% through January 19, still recovering from hitting a record-low in late October.

Zoom stock has a cup-with-handle base, but it's a far cry from its October 2020 Covid peak of 588.84, with Cathie Wood riding Zoom on the way down.

The video conferencing giant has reclaimed the 50-day and 200-day lines, but revenue growth is still in the single digits, and Zoom earnings growth has only returned in the past few quarters.

The ARK Innovation ETF, also known as ARKK, has had a rollercoaster ride since its inception in 2014. Despite a recent performance rebound, most investors have lost money.

ARKK suffered a 23.5% loss in 2021, followed by an even more severe 66.9% drop in 2022. However, the fund has gained 29.6% for the year to date through May 31, 2023.

The fund's performance remains decidedly mixed, with returns often tending toward extreme highs and lows due to its concentrated bets on high-growth companies.

Over the full period since inception, ARKK's returns are slightly better than the mid-cap growth category average. However, its returns for the trailing five-year period land in the bottom 2% of its peer group.

Investors have actually experienced significantly worse returns due to poorly timed asset flows. The fund's reported total returns are directionally accurate, but the numbers don't tell the whole story.

The performance gaps haven't significantly improved even with updated data through May 31, 2023. Investors' actual results lagged reported total returns over all four trailing periods.

The fund's breakneck volatility and drawdown risk make any risk-adjusted measure of its dollar-weighted returns even more worrisome. The difference between ARKK's time- and dollar-weighted returns comes down to a simple reason: most of its returns came when fewer shareholders were around to benefit from them.

The latest market news surrounding ARKK is a mixed bag. The fund's net asset value (NAV) has been steadily increasing, reaching a high of $15.36 in 2021.

This growth can be attributed to the fund's focus on disruptive innovation, which has been a driving force behind many successful companies. The fund's managers have been actively seeking out opportunities in emerging technologies, resulting in a portfolio that is both diverse and forward-thinking.

One notable trend in the market is the increasing demand for sustainable and eco-friendly investments. This shift is reflected in the fund's holdings, which include companies like Tesla and Square, both of which have made significant strides in reducing their environmental impact.

Recent rate cuts have failed to boost ARK's performance, with analysts deeming them insufficient.

Despite these cuts, central banks have signaled that near-zero interest rates are unlikely in the near future, keeping interest rates elevated.

This has led investors to favor companies with proven commercial success over speculative investments, like those in ARK's funds.

ARKK's assets under management have fallen this year, currently standing at $6.45 billion, down from $8.4 billion at the start of the year.

Cathie Wood's optimism hasn't swayed investors, with many remaining bearish on ARK's prospects.

At its peak in 2021, ARKK's assets under management soared to $28.2 billion, a sharp reversal in fortunes for the fund.

Nvidia led the market comeback on Friday, flashing a buy signal as the market rebounded.

Many leading stocks, including Nvidia, Tesla, and Apple, showed signs of recovery, with Nvidia surging above a key level.

Nvidia's CEO, Jensen Huang, is set to give a key speech at CES, which may have contributed to the stock's bounce.

The market indexes broke their losing streaks, with the Nasdaq rallying 1.8% as Nvidia bounced ahead of the CEO's speech.

Nvidia's rebound was part of a broader market recovery, with growth leaders like Block, GE Vernova, and Nvidia shining.

Here are some key stocks that flashed buy signals on Friday:

Coinbase stock is the top holding at Ark Innovation and across Cathie Wood's ETFs at Ark Invest. It's also by far the biggest loser among the major ARKK components in 2024.

COIN stock has retreated 28.3% so far in January. This is after skyrocketing 391% last year.

The SEC finally approved spot bitcoin ETFs on Jan. 10, which led to sell-the-news selling in bitcoin.

Coinbase stock is the top holding at Ark Innovation and across Cathie Wood's ETFs at Ark Invest.

Cathie Wood's ETFs have a significant stake in Coinbase stock, which has been a major performer in the past year.

Coinbase stock has retreated 28.3% so far in January, a notable decline from its recent surge.

The stock's decline can be attributed to sell-the-news selling in bitcoin, which rebounded powerfully last year in anticipation of the SEC's approval of spot bitcoin ETFs.

Coinbase and other bitcoin stocks have historically moved with the digital currency, making them vulnerable to market fluctuations.

The SEC finally approved spot bitcoin ETFs on Jan. 10, leading to a sell-off in Coinbase stock.

The fund's assets took a significant hit in 2022, dropping from $16.2 billion to $6.0 billion by the end of the year.

This decline was largely due to the fund's focus on high-growth stocks trading at steep valuations, which fared poorly in the face of market worries about inflation, interest rates, and geopolitical risk.

The fund's peak assets in 2021 were a whopping $16.2 billion, but by 2022, that number had plummeted to less than one fourth of that amount.

The fund's assets have continued to recover in 2023, but the initial losses had a lasting impact on investor returns.

Despite the fund's partial recovery in early 2023, fewer dollars were available to benefit from it, thanks to the significant decline in assets in 2022.

Despite a recent performance rebound, most ARK Innovation ETF holders have lost money. The fund's performance has been mixed over the years, with a 23.5% loss in 2021 and a 66.9% drop in 2022. In fact, the fund's returns for the trailing five-year period land in the bottom 2% of its peer group.

The ARK Innovation ETF has gained 29.6% for the year to date through May 31, 2023, but its returns over the full period since inception are slightly better than the mid-cap growth category average.

The fund's concentrated bets on companies with high earnings growth potential have led to extreme highs and lows in performance. This strategy has resulted in poorly timed asset flows, which have affected the returns shareholders have actually experienced.

Unity Software stock has tumbled nearly 19% this year.

Last year, shares gained 43%, but it was a choppy affair.

Unity stock hit a 2023 low on Nov. 1.

Investors could view the past few weeks as the start of a deep handle to a six-month consolidation or the start of a new base following the late 2023 rally.

But the gaming software firm has to start rebounding.

Unity Software is growing fast and expected to turn a profit in 2024.

Zoom Video stock has been on a rollercoaster ride, with shares down 4% through Jan. 19. It rose just 6.2% last year, but hit a record-low 58.87 in late October.

Zoom stock has a cup-with-handle base, which is a technical indicator that suggests a potential breakout. However, there's no prior uptrend to support this.

The stock has been struggling to break through resistance around 75, hitting it in late December and stumbling to start 2024. It's a far cry from the October 2020 Covid peak of 588.84.

Zoom's earnings growth has returned in the past few quarters, but revenue growth is in the single digits. This may be a concern for investors looking for more robust growth.