The much-hyped investment firm Ark Invest, led by Cathie Wood, has reportedly seen a massive erosion of wealth over the past ten years, amounting to a staggering $14.3 billion.
What Happened: According to a recent Morningstar analysis, the wealth destruction at Ark Invest, a company that gained widespread attention for its high-risk tech investments, has been attributed to the 2022 bear market. This market downturn led to a 67% plunge in the firm’s flagship fund, ARK Innovation ETF, reported Business Insider on Tuesday.
Despite the significant losses, Ark Invest still manages over $13 billion in assets across its ETFs, indicating that some investors continue to believe in Wood’s investment strategy.
“These funds managed to lose value for shareholders even during a generally bullish market,” Morningstar analyst Amy Arnott said.
Ark Invest’s top holdings, including Coinbase Global Inc (NASDAQ:COIN), Tesla Inc (NASDAQ:TSLA), Roku Inc (NASDAQ:ROKU), and Zoom Video Communications Inc (NASDAQ:ZM), have also experienced a challenging start to 2024.
See Also: Not Shy Of Buying The Dip, Cathie Wood’s Ark Mops Up Over $11M Worth Of Shares In Tesla — Sells Nvidia Stock
Notably, Ark Invest’s wealth erosion occurred during a period of favorable market conditions, raising questions about the firm’s future prospects.
Why It Matters: Despite the recent setbacks, Ark Invest has continued to make bold moves in the market. In January, the firm purchased $3.3 million worth of Tesla shares, reinforcing its confidence in the electric vehicle giant. This move came at a time when Tesla was facing a challenging market scenario.
Ark Invest’s faith in Tesla was further evidenced in February when the firm purchased over $11 million worth of Tesla shares, despite market fluctuations. These investments reflect Wood’s unwavering belief in Tesla’s growth trajectory.
Additionally, in January, Ark Invest purchased $3.3 million worth of shares in Robinhood Markets Inc (NASDAQ:HOOD), signaling another bold move to support innovative companies amid strategic shifts and financial growth for Robinhood.
Read Next: Jim Cramer Tells Investors To ‘Find Some Room For Stocks’ Before Fed Rate Cuts: ‘You’re Gonna Be Kicking Yourself If You Insist In Parking All Your Cash’
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