ARKK lags Bitcoin and S&P 500 since 2014 launch

For more than a decade, Cathie Wood’s main fund has not managed to beat the two benchmarks that are the most obvious points of comparison.

The multi-billion-dollar ARKK fund, which launched on October 31, 2014, has underperformed both Bitcoin and the S&P 500’s total return over its whole life.

Because Ark Invest also fell short in most individual calendar years in that period, even investors who tried to time their moves in and out of Wood’s funds would have had a hard time finding a stretch of outperformance.

ARKK could beat BTC easily in years that were brutal for the cryptocurrency — for instance, 2018’s 73% collapse and 2022’s 67% drop.

But the fund, which leans toward Tesla, bitcoin, artificial intelligence and gene editing, still could not outpace its benchmarks over the long run.

Add up the returns from October 31, 2014 to yesterday’s close, and ARKK is 318%, BTC 23,214%, and the S&P 500 367% with dividends included.

A decade of work, still behind the market

Any fund manager would find it embarrassing to spend a full decade working and still trail a passive, no-effort S&P 500 investment. But ARKK’s 49% shortfall does not fully convey how painful the past five years have been for holders of Wood’s ETF.

ARKK reached its highest point of $159.70 on February 16, 2021, and has never returned there. Since that date, the fund is down 46%, while the S&P 500 is up 65%.

Measured from the start of 2022, ARKK sits 80% behind the S&P; from the start of 2023, the deficit is 60%; from the start of 2024, 8%.

Across the last five years, ARKK has lost 28% and the S&P 500 has risen 72%.

Wood’s ambition outpaced her results

The strategy guiding Wood’s firm is built around a shifting roster of stocks that fall under the “disruptive innovation” label.

In 2020 the fund climbed 152%, then collapsed 67% in 2022.

Morningstar’s ranking of fund families by shareholder value destruction over the decade through 2023 placed ARK Investments first, with Wood’s funds wiping out roughly $14.3 billion — more than double the loss of the second-worst fund firm on that list.

Wood has also been a vocal bitcoin bull while her fund has lagged bitcoin by a wide margin. She has published sky-high, imaginary BTC price targets of $1 million, $1.2 million and $1.5 million.

ARKK holds direct exposure to bitcoin price changes and crypto equities such as Coinbase, and ARK also co-sponsors a spot BTC ETF. The fund’s total return has nonetheless lagged BTC in most years since 2015, even with the firm’s heavy bet on the sector.