ARKK ETF

The year is almost over, and it's time to make some bold predictions for 2025.

Wood's flagship Ark Innovation ETF (ARKK) has surged more than 30% since Election Day, but the fund is still suffering from investor outflows.

Cathie Wood's Ark Innovation ETF (ARKK) stock price has continued to rise this year as America's technology companies rallied. It continued to underperform the broader market as it rose by just 9.13%, while the Invesco QQQ (QQQ) fund rose by almost 24%.

Despite ARK's recent underperformance, I believe in the long-term potential of technological progress and disruptive tech companies, especially as the economy stabilizes and interest rates lift. ARKQ has shown better performance than ARKK, but Tesla is the top holding in both funds; Tesla's potential 70% CAGR should drive growth for both ARKQ and ARKK. While I expect significant upside for both ARKK and ARKQ over at least the next few years, I expect ARKQ to outperform ARKK while presenting less risk to investors.

Cathie Wood is defending her turbulent ARK Innovation ETF following a rocky stretch.

On October 28th my daily article said this: Considering the bull market of 2024, Cathie Wood's ARKK fund (she has 6 ETFs) over 2 years and a lot of sideways price action, could now be a potential player. Remember, ARKK peaked in 2021 at 159.70.

Considering the bull market of 2024, Cathie Wood's ARK Innovation ETF (ARKK) – she has 6 ETFs – has seen a lot of sideways price action. But it could now be a potential player.

ARK Innovation ETF has underperformed, returning only 15% over 5 years, versus 95% for the S&P 500. ARKK's concentrated holdings in companies like Tesla, Roku, and Coinbase are seen as poor investments with limited growth potential. The ETF's strategy of investing in large-cap companies is flawed; smaller companies are better suited for disruptive innovation.

ARK Innovation ETF experienced a classic boom and bust cycle from 2020-2022, similar to historical market bubbles. Post-bust, ARKK is trading within its pre-mania range, indicating a return to the mean. The ETF is unlikely to recover quickly and may struggle for an extended period.