ETF Spotlight: Assets Flee Wood's ARKK as Price Jumps

Cathie Wood’s $6.2 billion ARK Innovation ETF (ARKK) has been the poster child for the superstar-run fund that’s been trying to regain its footing after a stunning tumble.

The technology fund known for its bets on Tesla Inc. (TSLA) rose tenfold between February 2016 and February 2021, then lost nearly three-quarters of its value in the following two years as some of its high-risk investments failed to deliver. Founder Wood was hailed by Bloomberg as the best stock picker of 2020 before ARKK was named biggest “wealth destroyer” by Morningstar in 2024.

ARKK Finding Its Mojo?

ARKK appears to have rediscovered its mojo for the time being, as the active fund has gained 45% over the past year. That beats the 11% gain in the S&P 500 as measured by the Vanguard S&P 500 ETF (VOO).

The fund, with a 0.75% management fee, has done this as top holding Tesla has gained 75% over the past year. No. 2 holding Roku Inc. (ROKU) has gained 56% over that period, and the No. 3 holding Roblox Corp. (RBLX) has gained threefold.

Still, warning clouds may be gathering for the fund that says it invests in disruptive innovators. TSLA has lost 15% so far this year as sales at the biggest EV-maker tumble and CEO Elon Musk tangles himself in the Trump administration's cost-cutting projects.

Investors have pulled $2.4 billion from the fund over the past year, and the outflows have continued, with $275 million exiting in the past five days through June 17, according to FactSet data on etf.com.  

ARKK Net Fund Flows—Source: Factset

Furthermore, short interest has surged to 37% of shares available on the market, according to S3 Partners data reported by Bloomberg News. Another challenge for ARKK is competition from single-stock ETFs, the news service said.

And while ARKK is having a good year, the price has barely budged over the past five years while VOO has gained 16%.