Cathie Wood's Ark Invest, $ARKK, has destroyed $14 billion in wealth over the past decade

Cathie Wood's Ark Invest, $ARKK, has destroyed $14 billion in wealth over the past decade, per MorningStar.


According to a recent Morningstar analysis, Cathie Wood's Ark Invest has lost an estimated $14.3 billion in wealth over the past decade.

Ark Invest gained significant attention in 2020 and 2021 for its concentrated bets on speculative technology companies, which paid off handsomely thanks to low interest rates and increased risk appetite among retail investors.

In 2020, Ark's flagship innovation ETF, ARKK, surged nearly 150%, attracting a surge of inflows and growing its assets to nearly $30 billion by 2021. However, the firm suffered significant losses during the 2022 bear market, with its flagship fund plummeting 67%.

Morningstar's analysis shows that the ARKK ETF alone lost $7.1 billion in wealth, while the ARK Genomic ETF lost $4.2 billion. Ark Invest's total wealth destruction over the past decade exceeded that of any other fund family, more than doubling the losses of the next firm on the list.

These losses are particularly notable considering they occurred during a bullish market. Morningstar analyst Amy Arnott remarked, "These funds managed to lose value for shareholders even during a generally bullish market."

Since its inception in 2014, the ARKK ETF has generated a total positive return of 121.8%, significantly lower than the Nasdaq 100's gain of 329.5% over the same period. Despite this, the ARKK ETF remains down 71% from its record high.

Despite these losses, ARK Invest continues to manage over $13 billion in assets across its ETFs, indicating that some investors still believe in Wood's investment strategy. However, as the investment landscape shifts towards valuing profits over growth, the future success of Ark Invest's strategy remains uncertain.

Ark Invest's top holdings, including Coinbase, Tesla, Roku, and Zoom Video, have all faced challenges in 2024, highlighting the risks associated with concentrated bets on high-growth companies.

Arnott concluded, "The biggest value destroyers in the fund industry illustrate that there's no guarantee of success, even during a generally favorable market environment. They also provide a valuable case study in how not to invest."