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How Did Cathie Wood's ARK Invest Perform in 2021?

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Cathie Wood has become a formidable name in the ETF industry after her revolutionary ARK Investment Management delivered impressive results in 2020. Its focus on companies gaining from ‘‘disruptive innovation’’ has been claimed as its recipe for success. Notably, ARK defines ‘‘disruptive innovation’’ as the introduction of a technologically-enabled new product or service that potentially changes the way the world functions.

Markedly, amid the coronavirus pandemic, expanding digitization and heightening dependency on the Internet owing to some new normal trends like online shopping, work from home, digital payments, digitization of healthcare, growing favor for video gaming and many more lent support to ARK’s investment strategy.

However, 2021 has unfortunately been quite a different story for ARK Investment Management as it could not maintain its remarkable performance. Investors mostly switched to value plays and reopening trades as the U.S. economy recovered from the pandemic-led slowdown amid the accelerated COVID-19 vaccine rollout. Notably, major market indices like the Dow Jones Industrials Average, the S&P 500 index and the Nasdaq Composite are ending 2021 in the green zone

In fact, Wood’s most-popular disruption and growth-focused ARK Innovation ETF (ARKK - Free Report) has lost more than 20% in 2021, witnessing the worst annual performance since its inception in 2014 (according to a Bloomberg article). In this regard, Mirabaud sales trader Mark Taylor said that “Everyone is talking about the Santa rally powering markets, but meanwhile ARKK is still going lower. Cathie Wood remains firmly in the Grinch camp, and the outflows are starting to show,” as stated in a Bloomberg article.

However, Wood still forecasts ARK’s investments in key disruptive technologies to generate a 30-40% compound annual rate of return over the next five years, per a Bloomberg article.

A Glance at ARK Invest ETFs Performance in 2021

Let’s study the popular ARK ETFs and their performance in 2021 in details:

ARK Innovation ETF (ARKK - Free Report) — down 21.8% in 2021

This actively-managed fund includes companies that rely on or benefit from the evelopment of new products or services, technological improvements and advancements in scientific research relating to the areas of DNA technologies (‘‘Genomic Revolution”), industrial innovation in energy, automation and manufacturing (‘‘Industrial Innovation’’), the increased use of shared technology, infrastructure and services (‘‘Next Generation Internet’), and technologies that make financial services more efficient (‘‘Fintech Innovation’’).

ARKK generally holds 35-55 stocks in its basket. It charges 0.75% in expense ratio and has accumulated $17.20 billion in the asset base (read: 3 Cooled-Off Cathie Wood Stocks Set for a Big Rebound in 2022).

ARK Genomic Revolution ETF (ARKG - Free Report) — down 33.3%

This is an actively-managed ETF focusing on companies likely to benefit from extending and enhancing the quality of human and other life by incorporating technological and scientific developments, plus improvements and advancements in genomics into their business.

The fund typically holds 40-60 stocks in its basket. It charges 0.75% in expense ratio and has accumulated $5.49 billion in its asset base (read: A Guide to Biotech ETF Investing Amid the Coronavirus Crisis).

ARK Next Generation Internet ETF (ARKW - Free Report) — down 14.1%

Another actively-managed ETF includes companies focused on and anticipated to benefit from shifting the bases of technology infrastructure to the cloud, enabling mobile, new and local services, such as companies that rely on or benefit from the increased use of shared technology, infrastructure and services, Internet-based products and services, new payment methods, big data, the Internet of Things, and social distribution and media.

ARKW generally holds 35-55 stocks in its basket. It charges 0.79% in expense ratio and has accumulated $4.08 billion in its asset base.

ARK Fintech Innovation ETF (ARKF - Free Report) — down 15.9%

ARKF is again an actively-managed ETF that seeks to achieve its investment objective by investing under normal circumstances, primarily (at least 80% of its assets) in domestic and foreign equity securities of companies engaged in the fund’s investment theme of Fintech innovation.

ARKF typically holds 35-55 stocks in its basket. It charges 0.75% in expense ratio and has accumulated $2.34 billion in its asset base (read: A Comprehensive Guide to Fintech ETFs).

Meanwhile, let’s take a look at some ARK ETFs that could manage to generate some returns:

The 3D Printing ETF (PRNT - Free Report)  — up 10.4% in 2021

The fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Total 3D-Printing Index, which is designed to track the price movements of stocks of companies involved in the 3D printing industry.

PRNT holds 55 stocks in its basket. It charges 0.66% in expense ratio and has accumulated $396.1 million in its asset base.

ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) — up 3.4%

ARKQ is an actively-managed ETF that is focused on and is expected to substantially benefit from the development of new products or services, technological improvements and advancements in scientific research related to, among other things, energy, automation and manufacturing, materials, and transportation.

ARKQ typically holds 30-50 stocks in its basket. It charges 0.75% in expense ratio and has accumulated $2.22 billion in its asset base.

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