Did Cathie Wood beat the benchmark in the third quarter?
- The benchmark S&P 500 index remained flattish in the third quarter.
- Cathie Wood's actively managed ETFs underperformed SPX in Q3.
- Her flagship ARKK ETF is down over 20% from its year-to-date high.
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Macro headwinds sure made it challenging for investors to make good money out of the benchmark S&P 500 index in the third quarter. But did ones with money in Cathie Wood’s Ark ETFs had it any better?
The ARK Autonomous Technology & Robotics ETF (ARKQ)
ARKQ underperformed the benchmark in the third quarter as Kratos continued to slide on reports that budgetary pressures could push Skyborg beyond 2023. A sell-off in Baidu further weighed on the ETF as the Chinese government cracked down on its U.S. listed tech giants.
Among the best performers were Tesla and Unity Software, both of which appreciated after reporting strong numbers for their fiscal second quarter.
The ARK Next Generation Internet ETF (ARKW)
ARKW underperformed the SPX as the rising competition in mobile gaming resulted in a hit to its earnings. Roku also tanked 30% after reporting slower-than-expected user growth in Q2 that augmented the recent decline in the ETF.
ARKW also saw the best performance from Tesla and Unity Software in the third quarter for reasons already stated.
The ARK Genomic Revolution ETF (ARKG)
ARKG underperformed the S&P 500 on fading investor confidence that Teladoc Health could continue to perform well in a post-pandemic world. On top of that, Fate Therapeutics plunged sharply after reporting data from its “Natural Killer” cell programs in August.
Among the best performers were Arcturus Therapeutics, as it acquired Translate Bio and Regeneron Pharmaceuticals on strong demand for its COVID-19 antibody cocktail.
The ARK Fintech Innovation ETF (ARKF)
ARKF underperformed the benchmark on fears that higher mortgage rates could hit the housing market, fuelling an over 25% decline in Zillow Group. Further downside in the third quarter came from Pinterest that lost traction after reporting a sharp sequential decline in MAUs.
Positive contributions from Sea and LendingClub helped offset the underperformers “partially”.
The ARK Space Exploration and Innovation ETF (ARKX)
ARKX underperformed the SPX in the third quarter due to Kratos for reasons stated above. In addition, the Chinese crackdown on its U.S. listed tech companies weighed on another of its sizable holdings, JD Logistics.
Upside in Q3 came from Unity Software and, more importantly, from Netflix, as its South Korean survival series “Squid Game” went viral.
The ARK Innovation ETF (ARKK)
Finally, ARKK – the flagship ETF also underperformed the S&P 500, with the downside coming primarily from Roku for reasons stated above and Zoom Video Communications that reported a slowdown in growth as employers started recalling their staff back to offices.
Among the top contributors were Tesla and Unity Software.
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