ARKK ETF underperforms Bitcoin and S&P 500 since launch in 2014
ARKK fund lags behind Bitcoin and the S&P 500
Cathie Wood’s flagship exchange-traded fund (ETF), ARK Innovation (ARKK), has underperformed both Bitcoin (BTC) and the S&P 500 since its launch in October 2014. An ETF is a type of investment fund that tracks an asset or group of assets and can be traded on stock exchanges like a regular stock.
The ARKK fund, which focuses on companies involved in "disruptive innovation" like artificial intelligence, gene editing, and cryptocurrencies, has returned 318% in total since its inception. In comparison, Bitcoin has surged 23,214%, while the S&P 500, a stock market index tracking 500 large U.S. companies, has returned 367% with dividends reinvested.
Even during years when Bitcoin performed poorly, such as 2018 and 2022, ARKK struggled to outperform its benchmarks consistently.
Key performance figures
- ARKK’s cumulative return since October 2014: 318%
- Bitcoin’s cumulative return since October 2014: 23,214%
- S&P 500’s cumulative return since October 2014: 367% (with dividends reinvested)
- ARKK’s peak price: $159.70 per share on February 16, 2021
- ARKK’s decline since peak: 46%
- S&P 500’s gain since ARKK’s peak: 65%
- ARKK’s decline over the past five years: 28%
- S&P 500’s gain over the past five years: 72%
ARKK’s struggles in recent years
Since its peak in February 2021, ARKK has never regained its high, losing 46% of its value. During the same period, the S&P 500 rose by 65%. The fund’s performance has been particularly weak in recent years, trailing the S&P 500 by 80% since the start of 2022, 60% since 2023, and 8% since 2024.
In 2020, ARKK saw a significant gain of 152%, but this was followed by a 67% loss in 2022. Morningstar, a financial research firm, ranked ARK Invest as the worst fund family for shareholder value destruction over the decade through 2023, estimating losses of approximately $14.3 billion.
ARKK’s crypto and Bitcoin exposure
Despite Cathie Wood’s bullish stance on Bitcoin and her fund’s investments in crypto-related companies like Coinbase, ARKK has failed to match Bitcoin’s returns. Wood has previously predicted Bitcoin could reach prices as high as $1.5 million, but ARKK’s performance has not reflected this optimism.
ARK Invest also co-sponsors a spot Bitcoin ETF, a fund that directly tracks the price of Bitcoin. However, ARKK’s own returns have fallen short of Bitcoin’s in most years since 2015.
What is confirmed
- ARKK’s total return since inception (October 31, 2014) is 318%.
- Bitcoin’s total return since ARKK’s inception is 23,214%.
- The S&P 500’s total return since ARKK’s inception is 367% (with dividends reinvested).
- ARKK peaked at $159.70 per share on February 16, 2021, and has since declined by 46%.
- The S&P 500 has gained 65% since ARKK’s peak.
- ARKK has underperformed the S&P 500 in most calendar years since its launch.
- Morningstar ranked ARK Invest as the worst fund family for shareholder value destruction over the decade through 2023.
What is still unclear
- The article does not provide specific reasons for ARKK’s underperformance beyond general market trends and the fund’s investment strategy.
- No details are given about potential changes to ARKK’s strategy or management that could impact future performance.
Why this matters for investors
The underperformance of ARKK highlights the challenges of active fund management compared to passive investments like the S&P 500 or holding assets like Bitcoin. Investors who chose ARKK over these benchmarks have seen significantly lower returns over the past decade, despite the fund’s focus on high-growth, innovative sectors.
This also raises questions about the effectiveness of thematic investing strategies, particularly those centered on disruptive technologies, when measured against broader market performance.
