ARK ETFs Absolutely Crushed It In 2020
If you weren't paying attention, you might have missed the landmark year had by ARK Investments ETFs. ARK, an investments advisor founded in 2014 by Cathie Wood, provides tax-efficient ETFs that invest in portfolios of the world's most innovative companies. Since its founding, ARK has turned heads for its consistently impressive returns, and in 2020 ARK ETFs absolutely crushed it.
ARK's Bold Beginnings
ARK Investments offers ETFs, or exchange traded funds, to investors. ETFs are similar to mutual funds in that ARK selects a portfolio of companies to invest in and the value of the ETF is tied to the performance of that portfolio. Specifically, ARK invests in companies that are pioneers of innovative tech. Think robotics, fin-tech, self-driving vehicles, and AI. Since its founding in 2014, ARK has earned a sterling reputation and a stunning $44 billion in assets which it currently manages.
ARK's Amazing 2020
The market in 2020 faced enormous challenges given the uncertainty and constant whiplash of the global economy amid an unprecedented public health crisis. The future of tech, and indeed of society itself, was and continues to be difficult to predict. Nevertheless, ARK ETFs performed very well. In 2020, ARK brought in $10 billion of new assets on the heels of steady and impressive investment returns. The most well known ETF, called ARK Innovation Fund (ARKK) enjoyed a spectacular 154% gain this year. ARK undoubtedly takes some risks, putting big chips down on novel and sometimes unproven tech. But Cathie Wood seems to know how to pick them, and the investor community has taken notice.
Refreshingly Transparent
ARK has also impressed many with its refreshing approach to investor transparency, publishing financial models, detailed trade information, and its research into stocks and companies. ARK's analysts, who shape the portfolio of each ARK ETF, frequently engage publicly on social media sites like Twitter about stock picks and market forecasting. Given Wood's past performance, specifically her impressively precise valuation of Tesla, many are eager to read through ARK's reasoning and analysis.
ARK ETFs Score Big in 2020
ARK's success is due in no small part to Wood's accurate bullish position on Tesla. As the firm's stock price shot up against many expectations, ARK's Innovation (ARKK,) Autonomous Technology & Robotics (ARKQ) and Next Generation Internet (ARKW) ETFs all shot up big. All three hold around 10% stakes in Tesla, and all three skyrocketed on the tech firm's recent stock market ascent.
With substantial gains in both the biotech and technology sectors, ARK ETF has bucked the trend of passive ETFs with a striking commitment to rigorous research, transparency, and a litany of winning investments. ARK ETFs crushed it in 2020, and you should keep your eye on these portfolios heading forward as well.
