ARKK's Top-Ten Components Have Struggled Mightily
$ARK Innovation ETF(ARKK.US$ For perspective, the chart taken below from the ARK Invest website presented ARKK's top-ten holdings of the ARK Innovation ETF as of August 9th, 2021.
Looking at a similar snapshot today, which is shown below, even though Tesla's shares have galloped higher, Cathie Wood has been a consistent seller, and the market value of Tesla shares held at ARKK has actually declined.
Sticking with the top-ten holdings of the ARK Innovation ETF as of August 9th, 2021, and looking at a performance update today is illuminating.
Here was the performance year-to-date of the top holdings of ARKK, as of August 9th, 2021, interspersed with the SPDR S&P 500 ETF, and the Invesco QQQ Trust.
$Shopify(SHOP.US$ - Up 36.9%
$Block(SQ.US$ - Up 28.5%
$Roku Inc(ROKU.US$ - Up 19.8%
$SPDR S&P 500 ETF(SPY.US$ - Up 19.0%
$Nasdaq Composite Index(.IXIC.US$ - Up 17.8%
$Zoom Video Communications(ZM.US$ - Up 13.6%
$Coinbase(COIN.US$ - Up 12.2%
$Twilio(TWLO.US$ - Up 11.1%
$Tesla(TSLA.US$ - Up 1.2%
$Teladoc Health(TDOC.US$ - Down 24.7%
$Unity Software(U.US$ - Down 28.2%
$Spotify Technology(SPOT.US$ - Down 28.6%
$Block(SQ.US$ - Up 28.5%
$Roku Inc(ROKU.US$ - Up 19.8%
$SPDR S&P 500 ETF(SPY.US$ - Up 19.0%
$Nasdaq Composite Index(.IXIC.US$ - Up 17.8%
$Zoom Video Communications(ZM.US$ - Up 13.6%
$Coinbase(COIN.US$ - Up 12.2%
$Twilio(TWLO.US$ - Up 11.1%
$Tesla(TSLA.US$ - Up 1.2%
$Teladoc Health(TDOC.US$ - Down 24.7%
$Unity Software(U.US$ - Down 28.2%
$Spotify Technology(SPOT.US$ - Down 28.6%
At that point in time, only three holdings of the top-ten holdings in the ARK Innovation ETF, more specifically, Shopify, Square, and Roku, were outperforming the 19.0% gain in the S&P 500 Index, and the average performance of the top-ten holdings was a gain of 4.2%. This was a better return than the ARK Innovation ETF itself, which remember was up only 0.2% YTD through August 9th, 2021.
Ranking that same list of companies, here are the updated year-to-date return figures as of November 23rd, 2021.
$Tesla(TSLA.US$ - Up 57.2%
$Shopify(SHOP.US$ - Up 39.0%
$Nasdaq Composite Index(.IXIC.US$ - Up 27.1%
$Coinbase(COIN.US$ - Up 26.9%
$SPDR S&P 500 ETF(SPY.US$ - Up 26.5%
$Unity Software(U.US$ - Up 14.7%
$Block(SQ.US$ - Down 3.3%
$Twilio(TWLO.US$ - Down 18.7%
$Spotify Technology(SPOT.US$ - Down 22.8%
$Roku Inc(ROKU.US$ - Down 31.9%
$Zoom Video Communications(ZM.US$ - Down 38.7%
$Teladoc Health(TDOC.US$ - Down 48.4%
$Shopify(SHOP.US$ - Up 39.0%
$Nasdaq Composite Index(.IXIC.US$ - Up 27.1%
$Coinbase(COIN.US$ - Up 26.9%
$SPDR S&P 500 ETF(SPY.US$ - Up 26.5%
$Unity Software(U.US$ - Up 14.7%
$Block(SQ.US$ - Down 3.3%
$Twilio(TWLO.US$ - Down 18.7%
$Spotify Technology(SPOT.US$ - Down 22.8%
$Roku Inc(ROKU.US$ - Down 31.9%
$Zoom Video Communications(ZM.US$ - Down 38.7%
$Teladoc Health(TDOC.US$ - Down 48.4%
There has been a wholesale change in the performance rankings, with SHOP really the only constant. Today, three of the ARKK top-ten components are outperforming the SPDR 500 ETF. Looking closer, only two of the ARKK top-ten components are outperforming the Invesco QQQ Trust, and these two are TSLA and SHOP. The average performance of the top-ten holdings has declined from a 4.2% gain as of August 9th, 2021, to a 2.6% loss. Notably, this is less of a decline in the performance of ARKK itself, which was up 0.2% as of August 9th, 2021, yet is down by 14.9% as of November 23rd, 2021. Compared to August 9th, 2021, the biggest market capitalization positions have thrived, yet it is the underbelly of ARKK that has seen a more dramatic sell-off, which is of course represented by some underperforming companies in ARKK's top-ten list, notably TDOC, ZM, and ROKU.
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KPI Champion : Happy Thanksgiving, I’m sure your opinion ruined it for some people, not me; I disagre
KNJW : Great article, and thanks. I think the time is ripe to be long oil and gas stocks, as they are greatly undervalued, will rise with inflationary pressures, and still have good "starting valuations." Especially those stocks (companies) that have good torque/upside exposure to price action
FuuL KNJW: I am also long HPK and considering its warrants HPKEW.
nepia02 : I was short ARKK, but when SARK came out I switched into that. SARK is the inverse of ARKK put out just recently by Tuttle Capital. The reason is two-fold. 1). No interest carry for the short position. I was paying 6%. 2). I can use it to hedge my Roth IRA. Short positions aren't allowed in there.
DanDiem nepia02: Seems like a better way to hedge a port. Using the more traditional hedging methods, margin interest or option time decay can (will) beat you up if ARK just churns sideways for a year which is of course possible.
-grover : the stocks will come back stronger, especially roku and sq.
Ruby002 -grover: Absolutely, there are great companies in these ETFs many great to own individually. Growth is out of season but many over time will perform well and go up. I’m not as negative as many others right now. Glta