ARK Invest CEO Cathie Wood's flagship exchange-traded fund (ETF), known for its aggressive bets on companies poised for disruptive innovation, appears to have missed out on the significant rally in technology and artificial intelligence (AI) sectors so far this year.
Amid a technology-led bull market, semiconductor firms and other companies linked to large-scale AI infrastructure, including industrial players like Caterpillar, have seen their shares surge. As of Wednesday's afternoon trading, the Philadelphia Semiconductor Index has gained approximately 70% year-to-date, with the ETF tracking it, SOXQ, achieving a similar rise.
This follows three consecutive years of strong returns in the U.S. stock market. Having rebounded swiftly from a sell-off in March triggered by the Iran conflict, the S&P 500 has climbed 8.7% in 2026 as of Wednesday afternoon. Meanwhile, the Invesco QQQ Trust Series I ETF, which tracks the Nasdaq 100 Index, has surged more than 16% year-to-date.
In contrast, according to FactSet data, the ARK Innovation ETF (ARKK) had risen only 1.7% in 2026 as of Tuesday, significantly underperforming the iShares A.I. Innovation and Tech Active ETF (BAI), an actively managed fund that gained over 40% during the same period.
FactSet data shows that ARKK has substantially lagged the Nasdaq 100 Index both since the end of 2019 and since its inception on Halloween in 2014. From the end of 2019 through Tuesday, the ETF gained 56.3%, while the QQQ ETF, tracking the Nasdaq 100, soared nearly 233%.
Since its launch, ARKK has returned nearly 284%, still far below the QQQ ETF's 599% gain over the same period. The fund was a Wall Street darling during the 2020 pandemic, surging nearly 149% that year, per FactSet. According to Dow Jones Market Data, Tesla was its largest holding at the end of 2020.
However, times have changed, and ARKK has failed to replicate its past stellar performance.
Despite the AI frenzy propelling the broader U.S. market higher, investors have continued to withdraw money from ARKK this year, FactSet data indicates. As of Tuesday, the fund has seen net outflows year-to-date, and its assets under management remain far below their 2021 peak.
FactSet data shows the ETF had experienced net outflows of approximately $251 million year-to-date as of Tuesday. Notably, on April 28, the fund recorded a massive single-day outflow of nearly $2.9 billion.
Todd Rosenbluth, Head of Research at TMX VettaFi, stated in a phone interview that the ETF's "popularity has waned over the last few years because it hasn't delivered the same kind of performance it once did." He noted that while the concept of disruptive innovation has gained investor favor amid the AI boom, this fund has "missed some of the real winners."
Rosenbluth pointed out that the fund's one-star rating from Morningstar highlights the significant "performance challenges" it faces.
ARK Investment Management, founded by Wood, did not immediately comment on the fund's performance. Wood herself is the portfolio manager for ARKK.
As of Tuesday, Tesla remained the fund's top holding, with its stock down 3.6% year-to-date at that day's close. Ark website data shows the ETF's top five holdings also include AMD, Circle Internet Group, Crispr Therapeutics, and Tempus AI. According to the latest FactSet data, Tesla shares rebounded sharply in Wednesday afternoon trading, barely pushing the tech giant's stock into positive territory for 2026.
In recent years, a wave of so-called "thematic ETFs" offering exposure to hot trends like AI or space have emerged on Wall Street, fiercely competing for investor capital.
"Investors are increasingly turning to thematic ETFs for growth opportunities," Rosenbluth said. "But I don't think they've been looking at ARKK recently." ARKK is the ticker symbol for the ARK Innovation ETF.
Wood remains a prominent figure in asset management, renowned for her unique insights into disruptive innovation.
Although ARKK achieved a gain of over 35% in 2025, its performance this year has been completely overshadowed by the S&P 500's information technology sector.
The State Street Technology Select Sector SPDR ETF (XLK), which tracks a modified version of the S&P 500 tech sector, has performed strongly in 2026, rising nearly 22% as of Tuesday. Its top five holdings as of Tuesday were Nvidia, Apple, Microsoft, Micron Technology, and Broadcom.
Nicholas Colas, Co-founder of DataTrek Research, noted in an email report on Tuesday, "Technology stocks in the broadest sense now account for 40% of global equity market value." He added, "In a dramatic reversal of the long-term trend, it is now hardware, not software, that is 'eating the world' in terms of market cap."
The iShares A.I. Innovation and Tech Active ETF, which scours the globe for AI and tech stocks, has even outperformed the S&P 500 tech sector this year. As of Monday, its top five holdings were SK Hynix, Broadcom, Nvidia, AMD, and Micron Technology.
Among other AI and tech ETFs, FactSet data shows that as of Tuesday, the Roundhill Generative AI & Technology ETF (CHAT) has soared 42.9% this year, the Global X Artificial Intelligence & Technology ETF (AIQ) has gained 20%, and the Dan Ives Wedbush AI Revolution ETF (IVES) has risen 13.8%.
However, the recent parabolic surge in tech-related stocks has also sparked some market concerns.
Jonathan Krinsky, Chief Market Technician at BTIG, wrote in a report on Tuesday, "Bulls and bears can see what they want to see." He stated, "Our view remains that the parabolic move in tech, semis, and AI over the last few weeks will be met with an equal and opposite reaction at some point."
U.S. stocks moved higher overall in Wednesday afternoon trading. The S&P 500 rose 0.7%, the Nasdaq jumped 1.3%, while the Dow Jones Industrial Average edged down 0.2%. The latest FactSet data shows the S&P 500 hovering near record highs.
Wood's firm manages other actively managed ETFs, including the ARK Autonomous Technology & Robotics ETF. As of Wednesday afternoon, this fund had climbed over 19% this year. The Ark Space & Defense Innovation ETF also posted a notable gain of over 20% for the same period.
These returns far outpace the Ark Genomic Revolution ETF's mere 2.6% gain year-to-date in 2026. Additionally, according to the latest FactSet data, as of Wednesday afternoon, the ARK Next Generation Internet ETF and the Ark Blockchain & Fintech Innovation ETF were both in negative territory for the year.
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