Cathie Wood's ARK Innovation ETF is having a great year so far versus the S&P 500 — a redemption from last year. But it still can't quite match an even hotter ETF.
Move aside ARK. Innovator IBD 50 ETF is the best-performing actively traded U.S. diversified ETF this year, says data from Morningstar Direct. It's up 9.34% this year. That marginally tops Wood's ARK Innovation's 9.32%.
Strong performance by both ETFs, though, underscores how investors are still going for shares of companies with the best growth prospects.
"After a slow start out of the gate, stocks are finally starting to make some technical progress this month," said Adam Turnquist, head of technical research at LPL Financial.
Looking At The Year's Top ETF So Far
Innovator IBD 50 is racing higher thanks to its portfolio of the 50 stocks showing strong relative price strength and top-notch fundamentals. Those are exactly the kinds of stocks investors want to own now.
Currently the ETF's top holding at nearly 4% of the portfolio is Rocket Lab USA. The stock of the rocket maker sports a perfect 99 RS Rating due to its skyrocketing stock price. The company is expected to lose 23 cents a share in 2025. But that's less than the 31 cents a share it's seen losing in 2024.
The ETF's No. 2 position at 3.8% of the portfolio is Celestica. Shares of the Canadian maker of electronic products sports an RS Rating of 98. It's fast-growing, too. Analysts think 2024 profit will hit $3.86 a share, up 59% from 2023. And that explains its perfect 99 EPS Rating.
What's Going On At ARK?
ARK Innovation's return is similar to the IBD 50 ETF's, but the approach is different.
Electric vehicle maker Tesla is still the top holding at nearly 14% of the portfolio. That was a liability for most of 2024 — until the election. Now investors think Tesla CEO Elon Musk has President Trump's ear.
Shares of Tesla are up sharply this year for an RS Rating of 97. Growth is also returning. Analysts think the company's profit will rise 35% this year after falling 22% in 2024 and 23% in 2023.
ARK Innovation investors are still reeling from last year's dismal performance. But now the question is whether it can take the pole position.
Who Beats ARK And The S&P 500?
Top U.S. diversified ETFs this year
| Name | Ticker | Market return YTD % |
|---|---|---|
| Innovator IBD 50 | FFTY | 9.34% |
| ARK Innovation | ARKK | 9.32 |
| ARK Space Exploration & Innovation | ARKX | 8.71 |
| YieldMax Gold Miners Opt Inc Strgy | GDXY | 8.62 |
| Eventide High Dividend | ELCV | 7.86 |
| Invesco S&P MidCap Momentum | XMMO | 7.61 |
| Inspire 100 | BIBL | 7.44 |
| Invesco S&P 500 Pure Growth | RPG | 7.39 |
| iShares MSCI USA Momentum Factor | MTUM | 7.28 |
| Vanguard Mid-Cap Growth | VOT | 7.00 |
| Benchmark: S&P 500 | SPY | 3.54 |
Sources: Morningstar Direct, S&P Global Market Intelligence, IBD
Follow Matt Krantz on X (Twitter) @mattkrantz
