Had you bought 1 share in ARKK Innovation ETF on 31 March 2020, your $43 was worth $120 one year later, a return of 177%!


But who knew of ARKK or Cathie Wood back then?

If you didn’t, you may not have been interested, because ARKK’s 1-year performance to 31 March 2020 was minus 8%, the same as the S&P500.

Roll fwd 1 year & her $2bn ETF has grown to $23bn as investors piled in.

How well have they done?

Using Bloomberg data – (shares outstanding & ARKK’s daily price), I calculate that the average new investor from March 20-21 bought in at ~$110.

Meaning at 31 March 2021, they weren’t up 177%, they were only up …9%

Surely not!

I’m afraid so. Look at the chart below showing monthly net investment into ARKK, and you’ll see it peaked at $3bn – $4bn late Dec 20 – late Feb 21 at an average price of $142.

But why did people pile in then?

Perhaps because the 1,3 & 5 year p/a performance numbers vs the mkt in December : 162% v 16%, 57% v 13% & 50% v 15% – were “unbelievable”

But people “believed” them!

And are now down ~15%.

That’s the problem with performance, it’s always historic.

So don’t chase history, just invest sensibly.

And if you’re waiting for the performance stars for Value to align over all periods before investing, you may “miss the boat” (or ARK).