The ARK Innovation ETF ARKK, managed by renowned investor Cathie Wood, has posted remarkable gains in November, making it the fund’s best-performing month since its launch in 2014.
The ARK Innovation ETF surged by nearly 35% in November, surpassing its performance in January 2023 when it achieved a 27% gain. The second-largest fund managed by Wood, the ARK Fintech Innovation ETF ARKF also showed a similar return as its bigger brother.
Year-to-date, Wood’s flagship fund has risen by 55%, outperforming the broader tech sector’s performance as tracked by the Invesco QQQ Trust QQQ.
Chart: ARK ETF Monthly Returns And Year-To-Date Performance Vs. QQQ
Despite these impressive gains, Wood’s largest fund remains 70% below its all-time highs reached in February 2021. In contrast, the Nasdaq 100 Index is only 4% below its record peak in 2022.
The outstanding performance of tech stocks in November was driven by the Federal Reserve’s decision to hold interest rates steady for the second consecutive meeting at the beginning of the month. Market participants widely interpreted this move as signaling the end of the tightening campaign.
As U.S. inflation dynamics continued to slow down — the latest data revealed a sharper-than-expected decline in the Consumer Price Index (CPI) for October — investors began increasing their bets on a wave of Fed rate cuts in 2024.
CME Group’s FedWatch tool, which assesses the market-implied probabilities of future fed funds rate movements, indicates an 80% chance of a rate cut as early as May 2024. Speculators are even assigning a 59% probability of five rate cuts by December 2024.
Innovation Fund’s November Performance
The ARK Innovation Fund experienced a substantial boost in its monthly performance, driven by several key stocks. The top contributor was Coinbase Global Inc COIN, which surged by nearly 80% and alone contributed almost 7 percentage points of returns to the ARK Fund.
This surge coincided with a cryptocurrency rally, with Bitcoin BTC/USD surging above $38,000.
Here are the top 10 contributors to the fund’s impressive November performance:
| Security Name (Exchange: Ticker) | Sector | Price | Weight in ARK | 1-month stock return | Return Contribution |
|---|---|---|---|---|---|
| Coinbase Global, Inc. | Financials | 126.74 | 11.33% | 79.06% | +6.86 percentage points |
| Roku, Inc. ROKU | Communication Services | 106.91 | 9.11% | 89.72% | +5.91pp |
| Block, Inc. SQ | Financials | 64.43 | 5.99% | 61.38% | +3.11pp |
| CRISPR Therapeutics AG CRSP | Health Care | 69.86 | 4.71% | 81.29% | +2.88pp |
| UiPath Inc. PATH | Information Technology | 19.70 | 6.49% | 31.09% | +2.15pp |
| Shopify Inc. SHOP | Information Technology | 73.63 | 3.51% | 58.62% | +1.78pp |
| Tesla, Inc. TSLA | Consumer Discretionary | 246.11 | 8.02% | 58.62% | +1.73pp |
| DraftKings Inc. DKNG | Consumer Discretionary | 38.13 | 3.68% | 43.51% | +1.52pp |
| Twilio Inc. TWLO | Information Technology | 66.09 | 3.89% | 31.72% | +1.28pp |
| Zoom Video Communications, Inc. ZM | Information Technology | 68.25 | 6.88% | 15.18% | +1.24pp |
| Beam Therapeutics Inc. BEAM | Health Care | 28.96 | 2.32% | 56.55% | +1.14pp |
Photo: Courtesy Ark Invest
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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