ARK Invest Europe has recently launched three actively managed ETFs in the UK, Xetra, and CBOE Amsterdam markets. These ETFs mirror strategies that have been successful in the US for several years. The flagship strategy, ARK Innovation UCITS ETF (ARKK), along with ARK Genomics Revolution UCITS ETF (ARKG) and ARK Artificial Intelligence & Robotics UCITS ETF (ARKI) have been listed, with Borsa Italiana and SIX Swiss exchange listings expected soon.
The decision to launch European versions of the US ETFs was anticipated following the acquisition of Rize ETF in October 2023. In a recent thematic funds special, ARK founder Cathie Wood discussed various topics such as artificial intelligence, Tesla, and bitcoin. She hinted at an upcoming product launch, stating, “I think we’ll be able to showcase the three portfolios that we are evolving and actually launching in the not too distant future.”
Cathie Wood, the founder of ARK Invest, has a background in asset management at Capital Group and AllianceBernstein. She founded ARK Invest in 2014 with the aim of combining active stock picking with low-cost and easily tradeable ETFs. ARK funds focus on ‘disruptive innovation’ and new technologies across different sectors, which can be a high-risk investment strategy with high volatility.
Wood’s successful bets on companies like Nvidia and Tesla have contributed to her financial success and popularity in the US. However, Morningstar strategist Robby Greengold has raised concerns about ARK Innovation ETF’s performance, giving it a Negative rating. The fund’s focus on early-stage companies and bold bets may not always pay off, leading to volatility and underperformance compared to other technology funds.
Despite its setbacks, ARK Innovation ETF has shown some success in rising markets, but its performance has lagged behind during market declines. Its investment style amplifies market movements, leading to higher volatility. As of April 2024, the fund has experienced a decline in returns. While Cathie Wood remains a key figure at ARK Invest, the firm has faced challenges in growing and retaining its management team.
In conclusion, ARK Invest’s European launch of ETFs marks a significant expansion of its successful strategies from the US market. However, the performance of these ETFs may vary, and investors should carefully consider the risks and volatility associated with ‘disruptive innovation’ investments.