- The growth sector drawdown was justified when adjusted November inflation figures came in at 10%, surpassing the 40-year high.
- We analyzed Ark ETFs' holdings and found a direct relationship between valuation (sales multiples) and the severity of drawdown where the higher the valuation the worse the drawdown.
- BIGZ, a fund built around a similar theme as Ark's ETFs but drastically different holdings, suffered a 30% drawdown since May 2021, a performance worse than ARK's worst-performing ETF ARKG.
- We analyzed BIGZ and found that the uncovered relationship between valuation and severity of drawdown among Ark ETFs generalized well for BIGZ as well.
- With inflation expected to continue strong well into 2022, our findings and thesis suggest that BIGZ remains an unfavorable investment under current circumstances.
For further details see:
BIGZ: Different Than Ark, But Fated The Same