To The Moon

Honestly, I was not surprised when I came across the below post.

Out of curiosity, I pressed on to find out more.

Is it any wonder to find that Ms Cathie Wood’s most popular ETF $ARK Innovation ETF(ARKK)$ has crashed out of the Top 10 ETF ranking.

To be nitpickingly accurate, it is out of the Top 15 ranking actually.

ARKK is ranked #17.

Root cause (of course) is due to Ms Woods’ selection of fast-plunging stocks in and out of the S&P 500.

Below are stocks in ARKK holdings that have fallen more than -30%:

• $Invitae(NVTA)$ - healthcare stock.

• $2U(TWOU)$

• $Cerus(CERS)$ - healthcare stock.

• Block ($SQ) - fintech.

Do not be mistaken that these are the only poor performing stocks in ARKK.

On the contrary, in total there are 12 poor performing stocks in ARKK that has peaked on 19 Jul 2023 (see below).

• 7 of 12 stocks are from Healthcare sector.

• 2 of 12 stocks are from Financial sector.

• 1 of 12 stocks is from Information Technology sector.

• 1 of 12 stocks is from Communication Services sector.

• 1 of 12 stocks is from Consumer Discretionary sector.

• ARK Innovation's change in fortunes (see above) on the downside happened as quickly as it appeared on the upside.

• According to Morningstar, in just one month, ARK Innovation was down -5.3%,

• This is 5 times worse than the -1.1% drop by $Invesco QQQ Trust-ETF(QQQ)$ and -1.4% decline in the S&P 500 index — in the same period.

• Among 2023 top-performing U.S. diversified ETFs, ARKK trails QQQ.

• For YTD performance, QQQ gained +35.8% vs ARKK’s +24.2%. Both trail leader and #1 ETF — Fidelity Blue Chip Growth (PBCG) with its +37.3% gain.

• 30 of 31 ARKK’s holdings have fallen; highlighting serious issues in the portfolio.

• For 2023, nearly 40% of ARK Innovation's holdings are down so far.

• ARKK claim to fame was its huge bet on Tesla (TSLA).

• Of late, Tesla has been more of an anchor than a lift.

• Tesla is down > -16% from ARK Innovation ETF's July peak.

• At nearly 11% of ARKK portfolio, Tesla is still the largest in the ETF.

• However, of late Ms Woods has sold off Tesla in tranches to buy more volatile stocks.

• ARKK 2nd largest position is Zoom Video Communications (ZM), isn't much help either.

• The online video streamer makes up 8.2% of portfolio.

• Performance wise, it has been a been a laggard, inching up only +0.8% while the rest of the tech sector rallied.

• Like Tesla, ZM is also down -7.6% since ARKK July peak.

• ARK Innovation is built for volatility.

• It is chock-full of stocks Ms Wood thinks will pay off, just not this year, but many years from now.

• Although investors have been rewarded with big profits (in the past), it is important to note how ARKK fares vs the S&P 500.

• Investors must ensure they are adequately rewarded for the larger volatility sustained.

• Actually, longer term, ARKK actually posted a nearly -3% annualized loss, for past 5 years.

• When compared to other investments, the -3% loss is considerable because it is a [a] +15.1% annual return for Nasdaq investors and [b] +10.1% annual return for S&P 500 investors.

In case you are interested, my other “PICK” posts. Enjoy:

• US market ends Sep 23 on low. Nio, buy the rumours? Click here! to read & give a “like” ok. Tks.

• Not all Energy stocks are equal. Read & decide. Click here! to read.

• Time to invest in Amazon? Read & discuss. Click here! to read.

As with any investments, know what you own.

• Do you think ARKK is still a worthy ETF to invest now, more than ever?

• Do you think Ms Cathie Wood is astute when it comes to stocks pickings?

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