Cathie Wood's Ark Empire Bleeds As Investor Outflows Spike: 'The Loyal Shareholders Have Become Frustrated'
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 23 2024
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Source: Benzinga
Ark Invest's Decline:
- Ark Invest, led by Cathie Wood, managed $59 billion in early 2021 but faced an 80% downturn later.
- Factors contributing to the decline include high interest rates and disillusioned investors leading to significant outflows.
Fund Flows Comparison:
- In 2024, investors withdrew $2.24 billion from Ark's actively managed funds, nearly tripling the outflows seen in 2023.
- The ARK Innovation ETF experienced outflows exceeding $1.3 billion in less than four months this year.
Concerns and Performance:
- Concerns arise due to heavy concentration of funds in underperforming companies except for Coinbase and Robinhood.
- None of the other top 10 holdings in the Ark Innovation ETF yielded positive returns in 2024.
Short Strategies on Ark ETFs:
- Other ETF issuers have undertaken short strategies on Ark ETFs due to underperformance.
- AXS Investments launched the AXS Short Innovation Daily ETF SARK and AXS 2X Innovation ETF TARK to short ARKK with leverage.
Inflows and Trading Activity:
- AXS Short Innovation Daily ETF and AXS 2X Innovation ETF saw a spike in inflows following concerns about innovation-driving companies' financing.
- These two funds witnessed an 80% and 50% jump in trading activity, respectively, after the fallout of Silicon Valley Bank.
Analyst Views on ARKK
Wall Street analysts forecast ARKK stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARKK is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
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Current: 80.290
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About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
