Why Cathie Wood's Flagship ETF Slumped This Week
Shares in Cathie Wood's ARK Innovation ETF (NYSEMKT: ARKK) were down almost 17% in the week to midday Thursday. The ETF's stock price tends to follow the net asset value (NAV), so the primary reason is apparent -- the ETF's stocks are falling.
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The ETF's raison d'etre is to invest in "a technologically enabled new product or service that potentially changes the way the world works." As a result, it tends to be full of relatively speculative companies rather than technology companies with long-established earnings in mature markets. Given the kind of correction in the marketplace and a general environment of investors taking "risk" off the table, it's hardly surprising that this strategy has underperformed.
Source Fool.com
