My Thoughts On ARKK
An actively managed ETF, $ARK Innovation ETF(ARKK.US$ saw extraordinary returns in 2020, propelling Cathie Wood into the world’s eyes and winning her countless fanboys. Standing at USD24.42 billion, it is currently the largest of all ARK ETFs. The big question on everyone’s minds is: can ARKK replicate its success in 2021?
Cathie Wood has shown herself to have an astute eye when it comes to picking stocks and a willingness to take huge positions in companies she believe in. However, I read before that it is harder to grow a large-cap fund at the same rate as a small-cap fund as the fund manager has the enviable problem of deciding where to allocate the influx of funds and prices can be pushed up when it acquires big blocks of thinly traded shares.
Cathie Wood has shown herself to have an astute eye when it comes to picking stocks and a willingness to take huge positions in companies she believe in. However, I read before that it is harder to grow a large-cap fund at the same rate as a small-cap fund as the fund manager has the enviable problem of deciding where to allocate the influx of funds and prices can be pushed up when it acquires big blocks of thinly traded shares.
Due to its heavy allocation in innovative startups like $Tesla(TSLA.US$ , $Roku Inc(ROKU.US$ and $Teladoc Health(TDOC.US$ , its fortunes are inextricably tied to that of the technology sector. Technology stocks are highly sensitive to real and expected changes in interest rates (the higher the interest rate, the higher the discount rate used to calculate net asset value). This can be seen in how the ETF fell between Feb 2021 and the middle of May 2021 when investors saw signs that the Feds may increase interest rates as early as 2023. Although it has now rebounded to USD125.62 as of 11 July 2021, it is still some way from its all-time high of USD159.70.
I think in the short to medium term, further volatility and dips can be expected as the Fed seems to be making plans for tapering to moderate inflation but if one takes a long term view of investment, technology will continue to be a key driver of growth in the new economy, especially disruptive technology. An investor who vested in ARKK 3 months ago has a negative return of 3.64% compared to a positive return of 177.10% for an investor who vested a year ago so time in the market may beat timing the market.
Disclaimer: The above is my personal opinion and should not be taken as financial advice or a recommendation to invest. Past performance do not guarantee future results. Please do your due diligence and consult your financial advisor before making any investment decisions.
I think in the short to medium term, further volatility and dips can be expected as the Fed seems to be making plans for tapering to moderate inflation but if one takes a long term view of investment, technology will continue to be a key driver of growth in the new economy, especially disruptive technology. An investor who vested in ARKK 3 months ago has a negative return of 3.64% compared to a positive return of 177.10% for an investor who vested a year ago so time in the market may beat timing the market.
Disclaimer: The above is my personal opinion and should not be taken as financial advice or a recommendation to invest. Past performance do not guarantee future results. Please do your due diligence and consult your financial advisor before making any investment decisions.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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DadacaiOP : Hi @moomoo EventDid my post qualify for the 200 points?