After further declines to start 2022, the ARK Innovation ETF (ARKK) is now up just 47.3% since the pre-COVID peak for the US equity market on 2/19/20 and is now only beating the S&P 500 by 6.66 percentage points since the pre-COVID high. Not only that, but it’s also underperforming the Nasdaq 100 (QQQ) by 17.9 percentage points.
ARKK was the envy of the industry in the year or so after the pandemic hit. Fund assets for the ARKK ETF went from $2.4 billion prior to COVID up to $28.5 billion at its peak last February. At its high, ARKK was absolutely crushing both SPY and QQQ. On 2/12/21, ARKK was outperforming SPY by 143 percentage points since the 2/19/20 pre-COVID peak for the stock market and beating the more tech-heavy Nasdaq 100 by 117 percentage points. Since its peak, ARKK has dropped more than 43%, allowing the more steady SPY and QQQ to catch up. Talk about a real-life “tortoise and the hare” scenario!
Interestingly, if we look at ARKK’s annualized price change from its launch in October 2014 through the pre-COVID peak for the stock market on 2/19/20, it’s roughly the same as ARKK’s annualized price change since the 2/19/20 pre-COVID peak: ~22.8%. Also, throughout its history, ARKK’s annualized total return still stands at ~24.3%, which is nearly 10 percentage points better than SPY’s annualized total return of 14.8% over the same time frame. Click here to view Bespoke’s premium membership options.