Cathie Wood’s ARKK gets a 30% Trump bump, but outflows persist and top $3 billion in 2024

Innovation investor Cathie Wooden’s struggling funds loved a much-needed increase from Donald Trump’s reelection, however that hasn’t translated into investor inflows.

Wooden’s flagship Ark Innovation ETF (ARKK) has surged greater than 30% since Election Day on Nov. 5, pushing its year-to-date return to just about 18%. A lot of the acquire got here from its largest holding Tesla, with a 16.3% weighting. The electrical car maker’s inventory has skyrocketed about 70% since Trump claimed victory.

Nonetheless, the exchange-traded fund suffered $49 million in outflows in November and one other $24 million within the first week of December, in response to FactSet. They added to ARKK’s complete outflows of greater than $3 billion in 2024, in a document 12 months for the ETF trade that skilled a whopping $1 trillion in new cash.

“Traders proceed to redeem shares. ARKK has misplaced its luster because the main actively managed ETF,” stated  Todd Rosenbluth, head of analysis at TMX VettaFi.

The investor shot to fame in the course of the Covid-19 pandemic for her daring calls on Tesla and fashionable Covid performs equivalent to Zoom Video. Nevertheless, the pandemic rally proved short-lived and ARKK has since misplaced about 60% of its worth from its 2021 peak.

Wooden is now betting that potential deregulation underneath Trump may sprout revolutionary developments after years of coverage hurdles. She believes these know-how advances may turbocharge the U.S. financial system extra powerfully than in the course of the Reagan period.

Trump bump

Tesla has emerged as one of many largest Trump beneficiaries in ARKK’s portfolio due to CEO Elon Musk, who poured $277 million right into a pro-Trump marketing campaign effort. Musk even bought assigned a starring position by Trump, main a so-called Division of Authorities Effectivity.

Following an enormous postelection rally, Wooden trimmed her Tesla holding in ARKK barely, promoting 51,335 shares on Wednesday for about $21.8 million, in response to her each day replace.

One other prime performer in ARKK has been Coinbase, which is the second-largest holding within the fund. The crypto alternate has seen shares rally greater than 80% this 12 months as bitcoin exceeded the important thing $100,000 threshold.

Traders have grown hopeful that Trump will usher in a golden age of crypto, which would come with extra supportive regulation for the trade and a possible nationwide strategic bitcoin reserve or stockpile. This theme additionally benefited Robinhood, the sixth-biggest holding in ARKK, which has skyrocketed greater than 213% in 2024.

Nonetheless, a few of ARKK’s holdings have but to return to their glory heydays in the course of the pandemic whilst tech benchmark Nasdaq Composite has hit a number of document highs. Roku is down 9% this 12 months, whereas Pinterest has misplaced 16%.