Cathie Wood’s ARK Invest Just Had Its Best Month Ever: Are Growth Stocks Back? – The Average Joe

    Cathie Wood’s ARK Invest Just Had Its Best Month Ever: Are Growth Stocks Back?

    Victor Lei — Head of Research

    December 3, 2023

    December 3, 2023

    If you started investing during COVID, there’s a good chance ARK Invest was one of your first choices. Sadly, it may have also been one of the first investments that burned you.

    Retail investors piled on to Cathie Wood’s emerging tech-focused ETFs during the pandemic — sending her flagship fund, ARK Innovation ETF (NYSEARCA:ARKK), up nearly 212% from the start of 2020 to mid-2021.

    Investors of the Lost ARK: Once the Fed began hiking interest rates, the boom in growth stocks unraveled along with the big returns of $ARKK — sending it down 82% from its peak. But every “it’s so over” tends to be followed with a “we are so back” — and ARK just had its best month ever with a 31% gain in November as growth stocks rebounded, now up 59% this year.

    • In November, its two largest holdings, Coinbase (NASDAQ:COIN) and Roku (NASDAQ:ROKU), which together made up over 20% of its portfolio, went up by 62% and 75%, respectively.
    • Despite the stellar November, most ARK investors will be underwater — with the fund still down ~70% from its all-time high and far away from its former glory.

    Where will ARK float next?

    ARK’s rally comes as analysts embrace new optimism around growth stocks, which they expect could rise more in 2024, especially with anticipated rate cuts. Banks have changed their perspective on stocks after 2023’s beefy returns — last week, Deutsche Bank analysts singled out US growth stocks as “still the way to go for the long term.”

    • Genomic picks like CRISPR Therapeutics (NASDAQ:CRSP) and Twist Bioscience (NASDAQ:TWST) also boosted the fund with the approval of the UK’s first CRISPR therapy.
    • ARK’s COO Tom Staudt says ARK has a “meaningful amount of genomics exposure,” and despite healthcare lagging, “there have been a lot of exciting breakthroughs” (Barron’s).

    Why so bullish on genomics? The recent approval of CRISPR gene-editing therapy in the UK, coupled with the anticipation of US FDA approval on Dec. 8, is a game-changer. These therapies are poised to transform medicine — and the companies driving their development.

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