ARK Destroyed More Wealth Than Any Asset Manager Over the Previous Decade


by Mish Shedlock, Mish Talk:

Congratulations to Cathie Wood for losing $14.3 billion over the past decade, more than any other fund manager according to Morningstar.

Cathie Wood Investors Jumping Ship

The Wall Street Journal reports Cathie Wood’s Popular ARK Funds Are Sinking Fast


Cathie Wood’s investors are jumping ship.

They rushed into her funds and won big during the pandemic, when the star fund manager became a social-media sensation by making bold bets on disruptive technology stocks such as Tesla (TSLA), Zoom Video Communications (ZM) and Roku (ROKU). They largely stuck with her when the funds’ fortunes reversed after the Federal Reserve raised interest rates. Now, after years of bruising losses, many of them have had enough.

Investors have pulled a net $2.2 billion from the six actively managed exchange-traded funds at her ARK Investment Management this year, a withdrawal that dwarfs the outflows in all of 2023. Total assets in those funds have dropped 30% in less than four months to $11.1 billion—after peaking at $59 billion in early 2021, when ARK was the world’s largest active ETF manager.

Shares of Tesla, the largest holding, are down almost 45% this year and trading around $142. Wood has been buying the dip and reiterated her moonshot five-year price target of $2,000 in a CNBC appearance earlier this month.

By the end of last year, ARK funds had destroyed more wealth than any other asset manager over the previous decade, losing investors a collective $14.3 billion, according to Morningstar. ARK’s biggest inflows came in the months surrounding the innovation fund’s February 2021 peak, unfortunate timing for many investors.

Skill Assessment

It takes skill to be the worst. Not anyone can do it.

First you have to make wildly speculative bets. Then you need to develop a cult following right at the top. Then you have to make mistake after mistake on the way down.

Tesla the Big Bet

Tesla TSLA monthly chart courtesy of StockCharts/Com annotations by Mish

Early invertors in Tesla are still spectacularly ahead. You are even extremely ahead if you got in as late a 2020.

Otherwise, unless you caught the late 2022 bottom, you are likely behind.

Tesla TSLA Weekly Chart

Tesla TSLA weekly chart courtesy of StockCharts/Com annotations by Mish

Tesla Technical Picture

The Tesla weekly chart looks ominous. There are a couple descending triangle patterns (bearish) one can spot depending on how wide you like to make your crayons.

Triangles or not, Tesla is right on support. There is no reason to expect support to hold and every reason fundamentally to expect that it won’t.

Next support is at 100, then 60 then the mid 20s.

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