After A 50% Slide, The Average ARKK Investor Is Sitting On A Loss

After A 50% Slide, The Average ARKK Investor Is Sitting On A Loss
Andrew Rummer

about 2 years ago1 min

ARK Investment Management’s flagship Innovation exchange traded fund has had such a rough time over the past year that the average investor is now sitting on a loss – testing the patience of founder Cathie Wood’s legion of fans. 

As the chart shows, the ETF, known by its ARKK ticker, has tumbled almost 50% from its peak in February 2021, dropping to $79 a share on Friday. That’s well below the $93 average purchase price paid by investors in the fund, according to data compiled by Bloomberg, meaning most are sitting on losses. 

Despite this, ARKK investors have so far kept faith with Wood for the most part. While the fund’s assets have dropped by about $15 billion from their peak, the vast majority of that is due to the declining price of its investments. Only about $1 billion was from clients withdrawing their cash. 

There are, however, growing signs that some are tiring of Wood’s vision of long-term gains based on investments in “disruptive innovation”. Investors pulled about $350 million from the ARKK fund on Wednesday, the largest withdrawal in 10 months, and took another $50 million or so from Ark’s eight other funds.

The next few months could be make or break for Ark and Wood. 

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