ARKK - ARK Innovation ETF: Recent Returns Do Not Justify The Risk

2024-04-16 14:05:52 ET

Summary

• In spite of its strong performance in recent months, ARK Innovation ETF is poorly positioned for the rest of 2024.
• The current set-up is not favourable for growth stocks and ARK's holdings are likely to be in the eye of the storm.
• The focus on loss making growth stocks makes ARKK vulnerable to further increases in the term premium and lowers the fund's diversification properties.

Following a disastrous performance over the past few years, ARK Innovation ETF ( ARKK ) seemed to be on track to recover in the months following November of last year. The momentum, however, has cooled-off rather quickly and the ETF is now very close to once again underperform the S&P 500 and other growth-oriented funds, such as The Vanguard Growth ETF ( VUG )....

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