• ETFs from ARK Invest with poor performance in 2022
• Some strategies have significantly outperformed the S&P 500 again since the beginning of the year
• Still outflows from most of Cathie Wood’s ETFs
Over the past year, Cathie Wood’s flagship fund, ARK Innovation ETF (ARKK), is down around 67 percent. According to “Bloomberg”, however, poor performance in the past has not prevented investors from investing further capital in the funds. However, this has apparently changed in 2023: Although many ETFs from star investors can again post above-average performance, investors now seem to be losing interest.
Performance of the ARK ETFs is impressive again
Despite further interest rate hikes by the US Federal Reserve since the beginning of the year, which are rather bad for the growth-oriented stocks from the tech and crypto scene, which Cathie Wood likes to rely on, many ETFs from ARK Invest were able to convince with their performance again. While the market-wide US index S&P 500 is up around 5.64 percent year-to-date, Cathie Wood’s flagship product, the ARK Innovation ETF (ARKK), is up nearly 16 percent over the same period. The ARK Next Generation Internet ETF (ARKW) has even risen by around 22 percent since the beginning of 2023. The ARK Fintech Innovation ETF (ARKF) and the ARK Autonomous Technology & Robotics ETF (ARKQ) have each performed better than the US index so far this year with a nearly double-digit increase in performance. The year-to-date performance of the ARK Genomic Revolution ETF (ARKG), the ARK Space Exploration & Innovation ETF (ARKX) and The 3D Printing ETF (PRNT) is roughly in line with that of the S&P 500. Only the ARK Israel Innovative Technology ETF (IZRL ) has lost a good four percent this year and is therefore the only ETF from Cathie Wood to show a negative performance (status of all prices: closing prices on April 26, 2023).
Investors are fleeing almost all ARK ETFs
But despite this good development, investors are apparently not putting any money into Cathie Wood’s ETFs. So far, the star investor has mostly had to post net outflows from its funds in 2023. According to “Bloomberg”, around 35 million US dollars flowed out of the ARK Next Generation Internet ETF (ARKW) alone by mid-April. According to the media portal, only the ARK Genomic Revolution ETF (ARKG), from which more than 50 million US dollars were withdrawn, recorded even more net outflows. Only the flagship ARK Innovation ETF (ARKK) was able to generate net inflows, but these directly amounted to almost 100 million US dollars.
Interest in the new ARK Venture Fund (ARKVX), which was only launched last year, is apparently particularly weak. At the end of March, the fund only managed net assets of 15 million US dollars due to very low demand, writes “Bloomberg”. According to ARK Invest’s website, the fund “seeks to democratize venture capital by providing all investors with access to what we believe to be the most innovative companies throughout their private and public market lifecycle.” So far, however, this does not seem to be in demand among investors.
But it’s not just Cathie Wood’s ETFs that are currently struggling to persuade investors to invest. According to “Bloomberg”, the equity ETF sector recorded the lowest inflows of funds in the first quarter of 2023 since the second quarter of 2020, and US start-ups also collected less money from venture capitalists in the first quarter than they have in more than three years.
Is the strong performance to blame for the outflows?
Todd Rosenbluth, head of research at data and analytics firm VettaFi, explained the net outflows from ARK Invest’s ETFs to Bloomberg as investors may have bought in at lower prices over the past year and are now using the strong performance as a reason to sell , true to the motto “buy low, sell high”. Now, investors may be waiting for another drop before increasing their bets on ARK, Rosenbluth said.
Editorial office finanzen.net
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