Investors who bought stocks during the COVID-19 stock market crash of 2020 have generally seen strong gains over the past two years. However, some big-name stocks have fared much better than others since the trough of the pandemic.
ARKK’s bumpy road: Even investors who have taken a conservative and diversified approach to the market over the past couple of years have generally seen good returns on their investment at this point.
In 2019, the SPDR S&P 500 ETF Trust TO SPY generated an extremely strong total return of 31.2%, but the ARK Innovation ETF ARKK overcame it with a total return of 35.5%.
During the 2020 pandemic, many high-growth home stocks soared, and ARK’s CEO and CIO Cathy Wood has become extremely popular among the new wave of young traders.
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Sale in the event of a pandemic: The ARKK fund started 2020 on a high, rising from around $50.64 to start the year to a pre-pandemic high of $60.73 in mid-February. Unfortunately, over the following weeks, the fund completely fell off the market thanks to the COVID-19 pandemic.
The ARKK ETF fell to $33 on March 18, 2020, and the S&P 500 bottomed out five days later. At the time, investors had no idea that March 23 would mark the end of the shortest bear market in US history, lasting just 33 days.
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On April 14, ARKK was back above $50. On May 19, the fund was back to new all-time highs, but the rally certainly didn’t stop there. The combination of Federal Reserve interest rate cuts, unprecedented government stimulus and a much better virus death rate than initially feared has sent stock prices skyrocketing. growth.
Wood’s shooting star: Two brief sell-offs in tech stocks in September and October 2020 were merely bumps in the road for ARKK in the march to all-time highs of $159.70 in February 2021. Unfortunately, while the broad rally market continued to new all-time highs, many of ARKK’s major holdings suffered significant setbacks, and the ARKK fund collapsed completely.
By the end of 2021, the ARKK fund was back below $90, and that was the single Worst Performing US Equity ETFs under Morningstar’s coverage in the first quarter of 2022, as investors shifted from risky assets to defensive investments.
The ARKK fund then fell to $35.10 in May 2022 before bouncing back a bit to $42.59 today.
Still, investors who bought the ARKK ETF on the day it hit its 2020 pandemic low and held there generated a positive return at this point. In fact, $1,000 of ARKK stock purchased on March 18, 2020 would be worth around $1,228 today.
Looking ahead, Wood is still betting on high-growth tech stocks to outperform the market next year. ARKK’s main holdings currently include Tesla Inc. TSLA, Zoom Video Communications Inc ZM and Roku Inc. ROKU.
See also: Cathie Wood and Ark are still investing higher on Zoom after the earnings report – here’s why
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