On this week's episode of ETF Prime, host Nate Geraci was joined by Cinthia Murphy, VettaFi investment strategist. They discussed the future of ARK Invest and the ARK Innovation ETF (ARKK).
Investors often have to choose between high-growth or high-yield stocks. However, there are some individual stocks that offer both attractive dividend yields and high growth. We discuss several of them in this article.
Cathie Wood‘s ARK Innovation ETF ARKK was once the darling of the market, boasting bold bets on disruptive technologies and promising massive returns.
The ETF has returned an average annual gain of 9.7%. But the annual return for investors is -17%.
As expected, the ARK Innovation ETF ARKK has faced significant losses, down 14% over the past week. ARKK is losing its positive correlation to long-term bonds, likely as the odds of a soft landing decline. Most holdings in ARKK are tied to equity financing needs, which may become difficult as more investors look to increase their cash allocations.
This year has been a big year for active ETFs! According to Morningstar, even though actively managed ETFs still only represent 7% of ETF assets, they accounted for 25% of the flows in the first half of this year, growing to a record $889 billion from their start of the year, $714 billion.
One of the well-known benefits of investing in ETFs is diversification. However, with benchmark indexes reaching record levels of concentration, broad-based ETFs may not be as well diversified as investors expect.
The Ark Innovation Fund (ARKK) ETF has continued to underperform the market this year, raising concerns about its role in a portfolio. Its total return has crashed by more than 17% this year while the SPDR S&P 500 (SPY) and the Invesco QQQ (QQQ) have soared by 14.5% and 17.25%.
ARK Innovation ETF has a concentrated portfolio in high-potential tech companies, benefiting from U.S. economic growth. The ARKK ETF has had recent performance improvement due to strong holdings like Robinhood Markets, Inc. Fund flow is negative, but ARKK is a promising long-term investment with top tech companies in the market.
ARK Innovation ETF (ARKK) which invests in themes such as fintech, automation, robotics, artificial intelligence, and genomics has fallen on hard times after a few stellar years. The fund's high turnover rate and questionable decision-making raise concerns about its analysis and filtering process. Investors should consider higher quality funds such as VOO and QQQ which provide less risk and better returns.
The ARK Innovation ETF is on track for another year of losses. Investments in Tesla, Roku, and Roblox are dragging down the ETF's performance.
A focus on “disruptive innovation” describes this ETF's strategy. The goal is to benefit from broad, tech-enabled secular themes.