Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money

67% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • Fund Watch

Has The ARK Innovation Fund ETF Finally Sprung A Leak?

Has The ARK Innovation Fund ETF Finally Sprung A Leak?

The ARK Innovation ETF has become synonymous with disruptive growth stocks and its recent performance has made it the most-watched fund on Wall Street, having grown 97% year-to-date compared to the S&P 500 benchmark’s 10% growth in the same period.

This article was originally published on MyWallSt — Investing Is for Everyone. We Show You How to Succeed.

 

When you look at its top 5 holdings, it’s not hard to see why it jumped so much:

  1. Tesla (+375% YTD)
  2. Invitae (188% YTD)
  3. Roku (+66% YTD)
  4. Square (178% YTD)
  5. Crispr Therapeutics (+75% YTD)

Among the rest of its holdings are the likes of Teladoc, Nintendo, and much more. Just look at these returns as of November 13, 2020:

  • 29.8% annualized return since its inception in 2014.
  • 37.5% annualized return for the past five years. 
  • 39.10% annualized return for the past three years. 
  • 106.7% annualized return in the past year.

 

There’s a problem with Resolute

Well, the ARK might have sprung a leak as it was revealed on Friday that Resolute Investment Managers will exercise its option to take majority control of ARK Investment Management, a move not supported by ARK’s leader, Catherine D. Wood:

“On behalf of the employee-owners of ARK, we are disappointed that Resolute Investment Managers and its private equity owner, Kelso & Co., have chosen to issue this unwelcome notice that they intend to seize control of our business.”

Resolute acquired a minority stake in ARK in 2016 alongside an agreement that it would serve as the exclusive U.S. distributor of ARK’s investment strategies. This acquisition included an option to purchase controlling voting and equity interest in ARK that is exercisable in 2021.

Though neither firm provided the size of the existing and future ownership stakes or the financial terms of the deal, the move is unlikely to benefit ARK or its winning strategy, with CEO Wood insisting that the remarkable success of her team is rooted firmly in a culture of transparency, collaboration, and employee ownership. Wood does not believe that equity ownership by a Resolute, a party tangential to ARK’s business, is in the best interest of its stakeholders.

It looks as if ARK will fight Resolute on this one to at least maintain sovereignty over its own decision making, so for anyone invested, it’s worth keeping an eye on these developments. Should ARK maintain majority control of its operations, it will remain a far more prospective investment than if Resolute should incorporate it into its own business model, potentially breaking up a winning formula.

Leveraged ETFs are complex financial instruments that carry significant risks. Certain leveraged ETFs are only considered appropriate for experienced traders.

 

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Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

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