Ten-fold Growth and a 740 Percent Stock Gain: Cathie Wood’s Breakout Year by the Numbers

Discussion in 'Wall St. News' started by dealmaker, Jan 21, 2021.

  1. dealmaker


    Ten-fold Growth and a 740 Percent Stock Gain: Cathie Wood’s Breakout Year by the Numbers

    ARK Investment Management’s assets grew 11-fold to $34.5 billion over the course of 2020.

    January 20, 2021

    Catherine Wood, CEO of ARK Investment Management. (Christinne Muschi/Bloomberg)
    In December, as investors pulled more than $15 billion out of active U.S. equity funds — and as half of the largest fund managers suffered outflows — six-year-old ARK Investment Management was having its best month yet.

    Investors allocated $8.2 billion into ARK’s exchange-traded funds last month, among the highest net inflows of any U.S. fund manager, according to Morningstar’s end-of-year fund flows report. It was the culmination of a breakout year for the ETF firm founded by Cathie Wood, which grew from $3.1 billion at the end of 2019 to $34.5 billion by the end of 2020.

    ARK’s December surge in assets — representing a 35 percent increase over November’s inflows — followed a year of outperformance by the firm’s actively managed ETFs, which focus on what ARK describes as “disruptive innovation.” The Morningstar report suggested that investors “might be chasing those funds’ outperformance,” as five of the firm’s six ETFs delivered “triple-digit gains in 2020 that put them at or near the top of their respective categories.”

    These included the firm’s flagship ARK Innovation ETF, which benefitted as its largest holding, Tesla, soared 743 percent over the course of the calendar year. The ETF attracted about $3.14 billion in assets in December, ranking as the fifth-most-popular U.S. fund for the month.

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    It was closely followed by the ARK Genomic Revolution ETF, which recorded roughly $3.09 billion in net inflows. The ETF, which focuses on health care innovations including gene-based therapies, had the sixth-highest flows of any U.S. fund in December.

    [IIDeep Dive:Cathie Wood Still Thinks Tesla Is Going to $6,800. Why?]

    Altogether, ARK ranked fifth in total U.S. fund flows, according to Morningstar. This put the ETF firm in company with asset management giants including BlackRock’s iShares. One of the largest ETF businesses in the U.S. with over $2 trillion in assets, iShares recorded $11.7 billion in net inflows in December.

    “The growth of ARK ETF Trust is nothing short of impressive,” Morningstar said.

    ARK, which recently struck a deal to keep founder and CEO Wood as the firm’s majority shareholder, is already looking for new ways to expand in 2021. Last week, the firm filed plans with the Securities and Exchange Commission for a new ETF targeting space exploration.

    https://www.institutionalinvestor.c...ain Cathie Woods Breakout Year by the Numbers
    ajacobson, zdreg and Nobert like this.
  2. S2007S


    And a gigantic thank you once again to the fed and their printing press for these spectacular figures of a 740% stock gain because without those trillions printing 24/7 she wouldn't even have seen an inkling of a gain.
    d08 likes this.
  3. The graphs of the ARK ETFs are absolutely amazing, with 2017-2019 performance being practically flat compared to 2020.

    I've read Ark is benefitting from 'tail wagging the dog' dynamics, where people rush to buy whatever Ark buys. That could explain some of the above coupled with the general market regime, as I hadn't heard about Ark until this year.

    Will be interesting to see Ark's performance in 2021 and 2022. Great marketing.
    Amatrue likes this.
  4. Here4money


    WSB is most definitely wagging that dog. I also have some suspicions of insider knowledge as a few of her positions have been timed a little too perfect.
  5. narafa


    On the surface, it's great news, but deeper it looks like bearish news to me, mainly for the growth sectors which ARK invests in. Crowded trade indeed.

    The sectors which ARK invests in for sure has future potential, but that was also the case with internet stocks back in 1999/2000, they crashed, washed out, then the real potential did happen when everyone was just licking their wounds.

    Thanks for the warning :)
    Snuskpelle, Nobert and d08 like this.
  6. S2007S


    Don't be surprised when these sink 50% in a matter of months....the sustainability and trajectory of these funds and the market itself cannot continue the way they have been for the last 12 months. Eventually law of large numbers takes over as earnings will not be able to keep up with equity prices.

    I would say that these funds have literally pulled forward a solid 7-10 years of gains in only a short year times frame.
  7. S2007S


    They are all extremely crowded trades. I remember the funds back in the day that held all the high flying stocks especially the B2B stocks that just rallied to the point where you thought it would last forever. Then everything collapsed and this same situation will happen again.
  8. S2007S


    B2B booooooom...

    From the year 2000. Over 20 years ago. I bet most don't even remember the stocks in this article. They were all high flyers showing no signs of ever ever ever slowing down. Then one day the market collapsed!!!!!!!!

  9. narafa


    Yet, the B2B online auction system failed while the Alibaba model thrived.

    From the article:

    Wall Street agrees that the future is bright for the business-to-business e-commerce business. In September, Goldman Sachs & Co. predicted $1.5 trillion in annual sales for the business-to-business e-commerce industry by the year 2004.

    Me: The B2B e-commerce market size in 2018 was $1.14 Trillions, which means it never reached the GS predicted number and it's growth was off by some 15 years.

    If you don't throw out those unrealistic stupid market sizing & growth rates, stocks won't sustain their valuations & will fall like rocks.

    Reality eventually hits hard.
    yc47ib likes this.
  10. SteveM


    "History doesn't repeat, but it often rhymes." - Mark Twain

    "The is nothing new in Wall Street. There can't be, because speculation is as old as the hills." - Jesse Livermore


    Meet Gerry Tsai:

    #10     Jan 22, 2021