Cathie Wood's ARKK Attracts Cash Despite Big Losses
Cathie Wood’s ARKK collected $277.3 million Tuesday, turning yearly flows positive amid poor returns and double-digit losses among its top holdings.
The ARK Innovation ETF (ARKK) collected a surprising $277.3 million in inflows on Tuesday, pushing its year-to-date net flows into positive territory despite its top holdings facing steep losses.
This unexpected show of investor confidence comes as Cathie Wood's flagship fund has posted a 21.5% loss over the past month and a 15.1% decline year to date, according to etf.com data. The sudden cash influx suggests some investors may view the drawdown as a buying opportunity.
Tuesday's inflow has pushed ARKK's year-to-date net flows to $3.9 million, according to etf.com data, reversing a pattern of outflows that reached $683.3 million over the past six months. The fund’s total assets under management now sit at $5.3 billion.
ARKK Holdings Face Market Headwinds
Tesla Inc. (TSLA), ARKK's largest holding at 10.3% of the portfolio, saw its stock drop 15.4% on Monday after UBS analysts reduced their price target. CEO Elon Musk's political interventions have also raised concerns among investors, potentially affecting the company's market performance.
Coinbase Global Inc. (COIN) shares fell 18% on Monday, comprising 7.5% of ARKK's portfolio, according to etf.com data. The decline was influenced by President Donald Trump's executive order to create a “Strategic Bitcoin Reserve” using assets obtained through forfeiture proceedings, which dampened investor sentiment as it raised regulatory uncertainty in the crypto space.
Read More: Trump Summit Could Offer Insight to Crypto Reserve's Purpose
Despite these challenges, ARKK maintains a diverse tech-focused portfolio with its other top holdings, including Roku Inc. (ROKU) at 8.4%, Roblox Corp. (RBLX) at 6.9% and Palantir Technologies Inc. (PLTR) at 5.8%, all of which have experienced double-digit percentage losses over the past month.
Sister funds from Cathie Wood's ARK Invest haven't enjoyed the same investor confidence recently. The $1.4 billion ARK Next Generation Internet ETF (ARKW) reported $26.5 million in one-month outflows and a 21.6% loss over the same period, according to etf.com data.
Similarly, the $1.3 billion ARK Genomic Revolution ETF (ARKG) posted $508.2 million in year-to-date outflows, while showing an 18.5% loss over the past month, according to etf.com.
