ARKs Odyssey

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What's going on?

ARK Invest is casting its net across the Atlantic, snagging European counterpart Rize ETF.

What does this mean?

Cathie Wood, ARKs captain, has always sailed a steady course: even during the 2022 tempest, she held firm to the belief that the tech tide was just beginning to rise and judging by 2023s AI-driven market surge, she wasnt wrong. But its not all been positive: a few navigational errors in recent years have thinned out ARKs asset treasure chest massively, so the purchase of Rize might just be the compass the firm needs. At the very least, its a savvy strategy to replenish the assets ARKs managing.

Why should I care?

Zooming in: Missing the tide.
On the face of it, ARKs flagship Innovation ETF has grown by a respectable 36% this year. But when you realize its still anchored 70% below its 2021 peak and trails the Nasdaq 100s 39% rise, its clear the firms hit some rough seas. And the fact of the matter is that ARKs stockpickers have come up short. Case in point: offloading Nvidia earlier in the year, and missing its meteoric ascent. Given that the stock would have been perfect for a tech fund focused on long-term investments, thats not just a misstep: its walking the plank.

Zooming out: European catch-up.
Performance aside, ARKs visionary calls have been on the money, and this move into Europe looks particularly savvy. After all, ETFs currently make up just 8% of European investments, according to ETF giant iShares, compared to 12% in the US. Plus, the US tech sector, now a colossal 30% or so of the S&P 500, was a mere 10% ten years ago and Europe could be on the cusp of something similar.

Originally posted as part of the Finimize daily email.

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