Tesla's 80% Jump Doesn't Save Wood's Sinking ARKK

The surge in Tesla Inc. stock over the past few months has propelled the electric-vehicle maker to its peak weighting in Cathie Wood’s ARK Innovation ETF (ARKK), even as the ETF sinks in price during a year when rival funds are breaking records.

Tesla now represents 16% of ARKK, according to data from the fund's website. This comes after Tesla surged more than 80% from its 2024 low in April, and despite ARKK's recent trimming of its stake in the Elon Musk-owned company.

According to daily client updates, ARKK has not bought Tesla shares in recent months, though it did sell over 69,600 shares in early July.

The carmaker today gained for a tenth day straight, erasing its year-to-date losses. The bounce back in Tesla stock is widely credited to the company's second quarter vehicle production and delivery numbers, which beat expectations, and the company's movement into artificial intelligence.  

Investors Pull Money from ARKK

Still, the rise in Tesla hasn't been enough to keep ARKK's price afloat. While Tesla’s stock has seen a gain of around 5.3% year-over-year and is up 51% over the last month, the ETF has experienced a decline of about 12% this year. 

Meanwhile broad index funds are climbing, with the SPDR S&P 500 ETF Trust (SPY) adding 18% and the Fidelity NASDAQ Composite Index ETF (ONEQ) soaring 23%.

Investors have pulled $2 billion from the fund over the year ARKK this year, pushing its assets under management down to $6.2 billion from $7.7 billion in late January.

Ark Investment Management, the fund's parent company, did not immediately respond to request for comment.  

The ETF’s second largest holding is Roku Inc., with 9.2%, and Coinbase is third at around 8.3%. Last year, ARK, which manages $13.8 billion in 14 funds, dumped Nvidia Corp., which has tripled in price over the past two years.