The stock market has witnessed heightened volatility since the beginning of 2022. Moreover, the Federal Reserve recently raised benchmark interest rates by 75 basis points and indicated that it would maintain its hawkish stance to fight rampant inflation. Many economists expect the persistent monetary tightening to push the economy into a recession.
Renowned investor Cathie Wood’s ARK Invest ETFs have been hit hard this year amid the intense market rout. The ARK Innovation ETF (ARKK) has plunged 44.2% over the past months and 68% over the past year. Wood has been receiving backlash due to a lack of diversification in her flagship fund. This has now become the key factor for the fund’s underperformance.
