Cathie Wood's ARK Innovation ETF is on top for the year again — racing back past Fidelity Blue Chip Growth ETF and the S&P 500. And she can largely thank one huge and speculative stock pick.
Four stocks in ARK Innovation, including Coinbase, Twist Bioscience, Roku and Block, are up more than 70% from the ETF's low this year on Oct. 27, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
And yet, just one of those, Coinbase, accounts for an oversized 10% position in the ARK portfolio — more than enough to swing the needle. That's the single largest bet by the ETF and roughly three times larger than the portfolio's typical weighting.
And the results on performance are powerful. Wood's ARK Innovation's total return this year is 55.4%, says Morningstar Direct. That makes it the No. 1 U.S. diversified ETF this year. And it puts ARK Innovation ahead of its top rival for No. 1 all year, Fidelity Blue Chip Growth, which returned 51.9%.
ARK Innovation's Big Bounce Beyond The S&P 500
How did Wood's ARK Innovation retake the No. 1 position? After all, it had fallen out of the top 10 diversified U.S. ETFs just a month ago. You can thank the powerful 42% rally from the ETF's Oct. 27 low.
Since then, the ARK Innovation portfolio turned on the jets. Thirty out of the ETF's 32 positions are up since that low. And more than a few of the stocks are on a tear. In that time, 24 of the stocks in the ARK Innovation portfolio are up more than 15.5%. That's significant as it's higher than the gain of the Invesco Nasdaq 100 ETF, which also challenged ARK Innovation for the title all year.
But the standout ARK stocks are undeniable.
ARK Invest Cashes In On Coinbase
Cryptocurrency turned into the place to be in the fall as investors fretted over rising interest rates. And Coinbase's gains propelled ARK Innovation.
Shares of the cryptocurrency management company, not in the S&P 500, are up more than 97% from October. That makes it the top-performing stock in the ARK Innovation portfolio in addition to the largest. And ARK Innovation remained heavily invested in Coinbase despite the fact it has risen nearly 300% this year.
Another big winner for ARK Innovation from the lows — albeit nowhere near as important to the portfolio as Coinbase — is Twist Bioscience. The company, taking part in the DNA-based drug revolution, has seen shares soar 87% this year. It's only a 1.2% position in the ARK Innovation portfolio, though.
Meanwhile, video-streamer Roku continues to earn Wood's praise. Shares are up 79% from the ETF's October low. And they're up 148% this year. It's an 8.4% position in the ETF's portfolio, so definitely an important player in the bounce to the top.
It's important, too, to point out a few weeks remain until the final trade of the year. Other ETFs could still pull ahead. But for now the race for the top U.S. diversified ETF is for Wood to lose.
Top ARK Innovation Stocks From Oct. 27 Low
| Company | Ticker | Portfolio weight (%) | Bounce from low |
|---|---|---|---|
| Coinbase Global | 10.56% | 97.2% | |
| Twist Bioscience | 1.22 | 87.1 | |
| Roku | 8.39 | 79.3 | |
| Block | 6.25 | 73.5 | |
| UiPath | 7.76 | 64.4 | |
| Shopify | 3.13 | 56.3 | |
| CRISPR Therapeutics | 4.17 | 49.9 | |
| Archer Aviation | 1.08 | 42.4 | |
| Twilio | 4.09 | 41.9 | |
| Recursion Pharmaceuticals | 0.85 | 41.1 |
