Cathie Wood’s flagship ARK Innovation ETF (ARKK) has trailed both the S&P 500 and bitcoin since its launch on October 31, 2014, according to Protos.
From October 31, 2014 through yesterday’s close, ARKK returned 318%. Over the same period, bitcoin returned 23,214%, while the S&P 500 returned 367% on a total-return basis with dividends reinvested.
ARKK has fallen behind its clearest benchmarks
Protos said Wood’s multi-billion dollar flagship fund has spent more than a decade failing to beat its two most obvious benchmarks. The report also said that even investors who tried to time entries and exits in Wood’s funds would have found it difficult to capture a meaningful stretch of outperformance, because Ark Invest underperformed in most calendar years during that span.
ARKK was able to outperform bitcoin in years when BTC suffered particularly deep declines. Protos cited 2018, when bitcoin fell 73%, and 2022, when it dropped 67%. Still, the fund, which the report described as pro-Tesla, pro-BTC, pro-AI, and pro-gene editing, did not beat either benchmark over the full period.
The gap has looked worse over the past five years
Protos argued that ARKK’s 49% shortfall versus the S&P 500 since inception does not fully capture how painful the last five years have been for investors in the ETF.
ARKK reached a peak of $159.70 per share on February 16, 2021, and has not returned to that level since. From that date, ARKK has lost 46% of its value, while the S&P 500 has gained 65%.
Measured from the start of 2022, ARKK has trailed the S&P by 80%. From the start of 2023, the gap is 60%. Since 2024, it is 8%. Over the past five years, ARKK has declined 28% while the S&P 500 has risen 72%.
A volatile strategy did not produce long-term outperformance
Wood’s investment approach centers on a rotating list of what she calls “disruptive innovation” stocks. ARKK gained 152% in 2020, then lost 67% in 2022.
Morningstar ranked ARK Investments first among fund families for shareholder value destruction over the decade through 2023. It estimated that Wood’s family of funds erased roughly $14.3 billion in shareholder value, more than double the loss attributed to the second-worst fund management firm on that year’s list.
Heavy crypto exposure still did not close the gap with BTC
Protos also noted that Wood has remained an outspoken bitcoin bull while her fund has lagged BTC by a wide margin. The report said she has published bitcoin price targets of $1 million, $1.2 million, and $1.5 million.
ARKK has bitcoin price exposure and holds crypto-related equities including Coinbase. ARK also co-sponsors a spot bitcoin ETF. Even so, Protos said ARKK’s total return has still fallen short of bitcoin’s in most years since 2015, despite the firm’s heavy commitment to the sector.