The Grinch That Stole All Of ARKK’s Historical Outperformance In One Year

While the rest of the market was participating in a Santa Claus rally on Monday, Cathie Wood’s ARK Funds fell 1.7% while its benchmark rose, further widening the fund’s underperformance delta against the NASDAQ that now stands over -40% YTD. 

The year’s atrocious performance cost ARKK all of its outperformance since its inception in 2014. Seven years of outperformance (that actually all happened mostly in the 18 months from late 2019 to early 2021 due to a Tesla gamma squeeze) have been erased. 

Mirabaud sales trader Mark Taylor told Bloomberg: “Everyone is talking about the Santa rally powering markets, but meanwhile ARKK is still going lower. Cathie Wood remains firmly in the Grinch camp, and the outflows are starting to show.”

Teladoc Health Inc., Zoom Video Communications Inc. and Zillow all helped ARKK underperform this year, Bloomberg wrote. 

ARK Funds also sold shares on Monday for their year-end distributions, despite many wondering on social media whether or not the “fire sale” of some recently purchased names were signs of potential distress.

At least for now, the sales seem to be for a reason other than fund outflows. 

ARK sold 56,295 shares of Tesla, estimated to be worth $61.6 million on Monday, according to Insider. All told, ARK Funds sold shares in about 68 companies on Monday worth about $227.6 million for the “purposes of raising cash for the 2021 annual ETF distribution”. 

Ark funds didn’t buy any shares on Monday, according to their daily trading update. 

The firm says its cash-raising activities have been completed, so we’re sure that traders will be watching even closer from this point forward.