Cathie Wood's ARK Innovation is having a terrible year vs. the S&P 500 — but it still has one thing going for it. At least it's not the absolute worst ETF.
ARK Innovation is down 13.2% this year, says Morningstar Direct. That's an abysmal showing when the SPDR S&P 500 ETF Trust is up nearly 8%. Even so, ARK Innovation is only the second-worst actively traded U.S. diversified ETF. WilderHill Clean Energy ETF, down 26.3%, is worse.
But suffering losses in both of these ETFs this early in the year stings the same. "This comes at a time when inflation concerns are starting to ramp back up as we head into summer," said Philip Blancato of Ladenburg Thalmann Asset Management in a report.
What's Hurting ARK Innovation?
It's easy to see what's hurting WilderHill Clean Energy. Political wrangling over subsidies for green energy are pounding shares of companies that rely on these incentives. Fluence Energy, the Invesco WilderHill ETF's second-largest position, is down 11% this year.
The question, though, is what's pushing ARK Innovation lower? The answer is "what isn't?" It's tempting to blame falling Tesla shares. And it's true shares of the electric vehicle maker are off roughly 25% this year. Falling Tesla stock burns ARK Innovation as it single-handedly accounts for more than a tenth of the portfolio.
But ARK Innovation's woes go much further than Tesla. Of the 35 stocks in the portfolio, 25 are lower this year. And not by small amounts. The average losing stock in the portfolio is off nearly 30%.
Some Big ARK Wipeouts
There are four stocks in the ARK Innovation portfolio that lost more than half their value this year.
Pacific Biosciences of California, for instance, is down nearly 80% this year. The Menlo Park, Calif.-based company working on high-tech medical treatments is expected to lose money annually until at least 2028. Fortunately it's only a 0.5% position in ARK Innovation.
The other 50%-off holdings are 2U, Verve Therapeutics and 10X Genomics. All are relatively small positions with none exceeding 2.1% of the ARK Innovation portfolio.
So while it's been a rough ride for ARK Innovation investors this year, at least they can take comfort that at least one ETF is doing worse.
ARK Is Second-Worst ETF This Year
Actively traded U.S. diversified ETFs in 2024 to date
| Name | Ticker | Market Ret YTD (Daily) Base Currency |
|---|---|---|
| Invesco WilderHill Clean Energy | -26.34 | |
| ARK Innovation | -13.18 | |
| Invesco Russell 2000 Dynamic Mltfct | -5.41 | |
| iShares S&P Small-Cap 600 Value | -3.88 | |
| SPDR S&P 600 Small Cap Value | -3.81 | |
| Vanguard S&P Small-Cap 600 Value | -3.72 | |
| Invesco High Yield Eq Div Achiev | -3.42 | |
| Pacer US Small Cap Cash Cows 100 | -3.29 | |
| ProShares Russell 2000 Dividend Growers | -2.99 | |
| ARK Space Exploration & Innovation | -2.92 | |
| S&P 500 | 7.99 |
