Cathie Wood’s Flagship Ark Fund Misses Out on Year-End Rally

(Bloomberg) — Cathie Wood’s ARK Innovation ETF is missing out on the year-end rally on Wall Street.

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U.S. stocks are coming to the end of 2021 on a high note, despite rising coronavirus cases, with the benchmark S&P 500 index gaining 1.4% on Monday while the technology-focused Nasdaq 100 index rose 1.6%. Wood’s ARK Innovation ETF, meanwhile, declined 1.7% — further cementing the fund’s underperformance this year.

The famous technology fund is now down 22% in 2021, heading for its worst annual performance since its inception in 2014. That comes in stark contrast to last year’s rally of almost 150%.

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

Teladoc Health Inc., Zoom Video Communications Inc. and Zillow Group Inc. are among the fund’s bets that contributed the most to its decline this year.

It’s not all doom and gloom, as ARKK has managed to post gains for three weeks through Friday, with the ETF rising 5.9% in that period. Despite those gains, the fund has underperformed the Nasdaq in December.

Last week, Wood tempered a projection for returns at Ark Investment Management after sparking criticism about the wording of some forecasts. In the clarification, Wood said she predicts a 30%-40% compound annual rate of return during the next five years for Ark’s “disruptive innovation strategies.”

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