An estimated $1.3 billion in shareholder wealth was destroyed by a bet on high-flying technology stocks from Cathie Wood's ARK Invest over the past decade, according to Morningstar analysis.
The losses don't take into account the declines seen across ARK's suite of investment offerings this year, as they don't take into account the declines seen in ARK's suite of investment offerings.
According to Morningstar, the majority of the losses came from two of ARK's actively managed vehicles last year: the ARK Genomic Revolution ETF ARKG and the ARK Fintech Innovation ETF ARKF The ARK Genomic Revolution fund with $2.4 billion in assets under management shed 34% in 2021, even during a bull market that saw the benchmark S&P 500 return 28.7% and the technology-heavy Nasdaq 100 return 27.5%, according to Morningstar.
The ARK Fintech InnovationETF, with $817 million in net assets, lost 18% last year.
The funds are down 49% and 62% compared to the year-to-date in 2022 - losses that are not reflected in Morningstar's data.
ARK'SETFs came in fifth place among Morningstar's list of top 10 wealth-destroying funds compiled by portfolio strategist Amy C. Arnott and just below investment vehicles from Credit Suisse, ALPS, Kraneshares and Barclays.
The fortunes of the worst performing fund families are a product of their investment focus, Arnott said in the analysis, noting that most firms see the largest losses for clients had fund lineups focused on commodities, natural resources, and emerging markets.
In the case of Cathie Woods ARK, the investment management firm employs an actively managed equity strategy with investments focused on disruptive innovation over five investment themes — artificial intelligence, autonomous vehicles, fintech, DNA sequencing and robotics and 3 D printing.
Since late last year, companies in these industries have been hit particularly hard because of the Federal Reserve's move away from easy-money policies that fueled investor enthusiasm for speculative, high-flying pockets of the market in an effort to tame inflation.
ARK's flagship exchange-traded fund, the ARK Innovation ETF ARKK, often seen as a proxy for U.S. speculative tech stocks, has dropped more than 60% this year. ARKK has approximately $8 billion in net assets. According to Morningstar, ARKK gained popularity after a 150% return in 2020 that helped it attract $20.6 billion in estimated inflows in 2021 due to the ARKK's popularity.
According to Bloomberg, ARKK has attracted approximately 1.5 billion inflows year to date, despite the decline of the year.