“Coin all-in worked”…Cathie Wood, ARKK return rate 27% overwhelmed S&P500

Ark Investment of Cathie Wood with Continuing High Returns (Source: CoinGape)

The flagship ETF 'ARKK (Ark Innovation)' of ARK Invest, led by Cathie Wood, known as 'Money Tree Sister', has recorded a return of over 27% this year, enjoying the investment effect of stocks related to virtual assets. This is a significantly better result than the S&P500 index's rise (6.67%) during the same period.

ARKK holds major stocks of virtual assets, such as Tesla (weight 9.3%), Coinbase, Robinhood, and Circle, as top holdings. In particular, Wood invested 252 million dollars (approximately 346 billion won) in the stablecoin issuer Circle, which was listed on the New York Stock Exchange last month, securing a return of over 125% in one day.

However, recently, she also showed moves to realize profits from some virtual asset stocks. Wood sold about 352 billion won worth of shares just before Circle's stock price reached its peak, and in July, she also sold Coinbase and Robinhood sequentially. On the other hand, when Tesla's stock price was adjusted, she made additional purchases worth 27.1 million dollars (approximately 3.7 billion won) and began portfolio readjustment.

Although ARKK has achieved an outstanding result well above the market average compared to the beginning of the year, investors' funds are still flowing out. ARKK has experienced net outflows for 18 consecutive months until last month since January 2024, and the current stock price (73.56 dollars), which is about half compared to the peak, is still far below the peak of 2021 (156.58 dollars).

In response, ARK Invest has introduced a new ‘buffer-style ETF’ to restore investor trust. It uses ARKK as a comparative asset and has a structure that reflects only half of the decline over a certain period, aiming to reduce losses while participating in gains without limits. However, a 'hurdle condition' is attached that requires ARKK to record an annual return of more than 5% to realize profits.

Recently, ARKK has regained upward momentum, but investors are still maintaining a cautious attitude towards the 'highly volatile aggressive growth strategy'. Whether Wood's 'all-in betting' can regain market trust is noteworthy.