July 20. Still up, but have lost a lot of money since OP jinxed it.
Why the disdain for managed funds like ARKK that destroy total market funds?
Re: Anyone investing in ARKK since it was first mentioned here is now behind VTI
I’d trade it all for a little more |
-C Montgomery Burns
-
- Posts: 3487
- Joined: Sun Sep 11, 2016 11:27 am
Re: Anyone investing in ARKK since it was first mentioned here is now behind VTI
A few years ago, I received some stock as a result of a spin-off. It had a decent gain, but I decided to wait till next year before selling because I expected a lower bracket. But the stock fell after a bad report, and by the time I sold, I had no gains to worry about
I learned never to let the tax tail wag the investment DOGE.
Re: Anyone investing in ARKK since it was first mentioned here is now behind VTI
Hahah. Yes that was me. Hey, It could still go back up 30%. I have two more months. I’m going go to learn to take profits on these fun money plays one of these decades. Buy and hold gets drilled into your subconscious around here. It can be quite hard to pull the sell trigger.SlowMovingInvestor wrote: ↑Thu May 13, 2021 7:01 pmA few years ago, I received some stock as a result of a spin-off. It had a decent gain, but I decided to wait till next year before selling because I expected a lower bracket. But the stock fell after a bad report, and by the time I sold, I had no gains to worry about
I learned never to let the tax tail wag the investment DOGE.
I’d trade it all for a little more |
-C Montgomery Burns
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Never worry about taxes.
Gain is a gain.
Gain is a gain.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Via Ben Felix, a WSJ article reports that the money-weighted return of ARK funds has been 5.24% annually. I know the point has been made, but that's not destroying VTSAX or VTIAX.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Where are they getting 5.24% from? Even before 2020, ARKK had an annualized return of 21% according to Portfolio Visualizer. If you include 2020 and 2021, it's 34% annualizeddrk wrote: ↑Thu May 13, 2021 11:15 pm Via Ben Felix, a WSJ article reports that the money-weighted return of ARK funds has been 5.24% annually. I know the point has been made, but that's not destroying VTSAX or VTIAX.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Money weighted return uses cash flows and present value to calculate performance. I believe it is equivalent to IRR.atdharris wrote: ↑Fri May 14, 2021 9:17 amWhere are they getting 5.24% from? Even before 2020, ARKK had an annualized return of 21% according to Portfolio Visualizer. If you include 2020 and 2021, it's 34% annualizeddrk wrote: ↑Thu May 13, 2021 11:15 pm Via Ben Felix, a WSJ article reports that the money-weighted return of ARK funds has been 5.24% annually. I know the point has been made, but that's not destroying VTSAX or VTIAX.
- firebirdparts
- Posts: 4414
- Joined: Thu Jun 13, 2019 4:21 pm
- Location: Southern Appalachia
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
It's not really that meaningful in this case, though. It is what it is. Lots of active managers made 100% in 2020. Naturally they've done some selling of their "brilliant vision". You have to make hay while the sun shines.
This time is the same
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
What this data is telling you is that most investors started buying ARKK at a later stage, and relatively few were in the game since the beginning, thus enjoying the performance in its full extent.
-
- Posts: 230
- Joined: Tue Jan 21, 2020 10:16 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
ARKK invests in "disruptive innovation". Whatever this means, this is what they do. It may or may not beat the market. I own some and I am down net so far. I am not planning to sell. It's a small % of my portfolio. I am not crazy nor bitter about it. Just curious.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Bloomberg computes the average cost basis of the stocks held by ARK (the firm, not ARKK the ETF) to be around $208/share. The average value of the ETFs issued by ARK is about $140.Monster99 wrote: ↑Fri May 14, 2021 9:53 amMoney weighted return uses cash flows and present value to calculate performance. I believe it is equivalent to IRR.atdharris wrote: ↑Fri May 14, 2021 9:17 amWhere are they getting 5.24% from? Even before 2020, ARKK had an annualized return of 21% according to Portfolio Visualizer. If you include 2020 and 2021, it's 34% annualizeddrk wrote: ↑Thu May 13, 2021 11:15 pm Via Ben Felix, a WSJ article reports that the money-weighted return of ARK funds has been 5.24% annually. I know the point has been made, but that's not destroying VTSAX or VTIAX.
https://twitter.com/ETFreplay/status/13 ... 07811?s=20
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Me as well. I bought 100 shares for fun last fall and am about even now. It ran up at the start of the year and I thought I had struck gold, but I don't plan to sell. Nothing wrong with having a small part of your portfolio exposed to the fund.Williams57 wrote: ↑Fri May 14, 2021 1:18 pm ARKK invests in "disruptive innovation". Whatever this means, this is what they do. It may or may not beat the market. I own some and I am down net so far. I am not planning to sell. It's a small % of my portfolio. I am not crazy nor bitter about it. Just curious.
-
- Posts: 230
- Joined: Tue Jan 21, 2020 10:16 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
To be honest I'm surprised it hasn't been dropping more given that there are a lot "meme" and overvalued (to put it mildly) stocks in the portfolio that have been dropping like crazy. I guess it's diversified enough lol. And there is still room for it to keep dropping. I wonder how low.atdharris wrote: ↑Fri May 14, 2021 1:38 pmMe as well. I bought 100 shares for fun last fall and am about even now. It ran up at the start of the year and I thought I had struck gold, but I don't plan to sell. Nothing wrong with having a small part of your portfolio exposed to the fund.Williams57 wrote: ↑Fri May 14, 2021 1:18 pm ARKK invests in "disruptive innovation". Whatever this means, this is what they do. It may or may not beat the market. I own some and I am down net so far. I am not planning to sell. It's a small % of my portfolio. I am not crazy nor bitter about it. Just curious.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Last year I bought Zoom and then it doubled soon after I purchased it. Seemed too much too soon and I didn't expect the hype to last so I sold 50% of it at 100% profit and kept the remainder. It wasn't a large purchase. I looked the other day and that 50% I kept and was once at a 100% profit is now down to about 10% profit.
I plan to keep it and see what happens to it. Years ago I traded in a stock (ISRG - Intuitive Surgical) that was a high flyer (up and down) and eventually sold out of it. I looked and if I had kept it, I would have made tons of money on it. So with Zoom I don't expect that to happen, I think it just happened to be in the right place at the right time but since the money isn't much, it would be interesting to see what happens down the road. If it drops much I might sell it but it is much less than 1% of my total investments.
Right now a lot of people in these investments are still viewing drops as buying opportunities which seems risky to me. Drops in stocks with real earnings I view as buying opps but with stocks whose price depends on hype-growth, I tend to be more skeptical.
A lot of these tech stocks will either end up going out of business, or getting acquired by a larger tech stock, and the rare few will be a nice profitable investment.
I plan to keep it and see what happens to it. Years ago I traded in a stock (ISRG - Intuitive Surgical) that was a high flyer (up and down) and eventually sold out of it. I looked and if I had kept it, I would have made tons of money on it. So with Zoom I don't expect that to happen, I think it just happened to be in the right place at the right time but since the money isn't much, it would be interesting to see what happens down the road. If it drops much I might sell it but it is much less than 1% of my total investments.
Right now a lot of people in these investments are still viewing drops as buying opportunities which seems risky to me. Drops in stocks with real earnings I view as buying opps but with stocks whose price depends on hype-growth, I tend to be more skeptical.
A lot of these tech stocks will either end up going out of business, or getting acquired by a larger tech stock, and the rare few will be a nice profitable investment.
----------------------------- |
If you think something is important and it doesn't involve the health of someone, think again. Life goes too fast, enjoy it and be nice.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Which stocks are those? Just curious. Their main holding is telsa at around ten percent.Williams57 wrote: ↑Wed May 19, 2021 10:25 amTo be honest I'm surprised it hasn't been dropping more given that there are a lot "meme" and overvalued (to put it mildly) stocks in the portfolio that have been dropping like crazy. I guess it's diversified enough lol. And there is still room for it to keep dropping. I wonder how low.atdharris wrote: ↑Fri May 14, 2021 1:38 pmMe as well. I bought 100 shares for fun last fall and am about even now. It ran up at the start of the year and I thought I had struck gold, but I don't plan to sell. Nothing wrong with having a small part of your portfolio exposed to the fund.Williams57 wrote: ↑Fri May 14, 2021 1:18 pm ARKK invests in "disruptive innovation". Whatever this means, this is what they do. It may or may not beat the market. I own some and I am down net so far. I am not planning to sell. It's a small % of my portfolio. I am not crazy nor bitter about it. Just curious.
-
- Posts: 230
- Joined: Tue Jan 21, 2020 10:16 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
https://ark-funds.com/wp-content/fundsi ... LDINGS.pdfLee_WSP wrote: ↑Wed May 19, 2021 1:30 pmWhich stocks are those? Just curious. Their main holding is telsa at around ten percent.Williams57 wrote: ↑Wed May 19, 2021 10:25 amTo be honest I'm surprised it hasn't been dropping more given that there are a lot "meme" and overvalued (to put it mildly) stocks in the portfolio that have been dropping like crazy. I guess it's diversified enough lol. And there is still room for it to keep dropping. I wonder how low.atdharris wrote: ↑Fri May 14, 2021 1:38 pmMe as well. I bought 100 shares for fun last fall and am about even now. It ran up at the start of the year and I thought I had struck gold, but I don't plan to sell. Nothing wrong with having a small part of your portfolio exposed to the fund.Williams57 wrote: ↑Fri May 14, 2021 1:18 pm ARKK invests in "disruptive innovation". Whatever this means, this is what they do. It may or may not beat the market. I own some and I am down net so far. I am not planning to sell. It's a small % of my portfolio. I am not crazy nor bitter about it. Just curious.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Yes, that is the list I was looking at. I don't recall any of the top ten being referred to as "meme" stocks. However, I'm not well versed in the craziness.Williams57 wrote: ↑Wed May 19, 2021 2:45 pmhttps://ark-funds.com/wp-content/fundsi ... LDINGS.pdfLee_WSP wrote: ↑Wed May 19, 2021 1:30 pmWhich stocks are those? Just curious. Their main holding is telsa at around ten percent.Williams57 wrote: ↑Wed May 19, 2021 10:25 amTo be honest I'm surprised it hasn't been dropping more given that there are a lot "meme" and overvalued (to put it mildly) stocks in the portfolio that have been dropping like crazy. I guess it's diversified enough lol. And there is still room for it to keep dropping. I wonder how low.atdharris wrote: ↑Fri May 14, 2021 1:38 pmMe as well. I bought 100 shares for fun last fall and am about even now. It ran up at the start of the year and I thought I had struck gold, but I don't plan to sell. Nothing wrong with having a small part of your portfolio exposed to the fund.Williams57 wrote: ↑Fri May 14, 2021 1:18 pm ARKK invests in "disruptive innovation". Whatever this means, this is what they do. It may or may not beat the market. I own some and I am down net so far. I am not planning to sell. It's a small % of my portfolio. I am not crazy nor bitter about it. Just curious.
- nisiprius
- Advisory Board
- Posts: 52216
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Nor am I.Williams57 wrote: ↑Wed May 19, 2021 2:45 pmYes, that is the list I was looking at. I don't recall any of the top ten being referred to as "meme" stocks. However, I'm not well versed in the craziness.
Trying a quick Google search, I found a website, Meme Stock Tracker, that claims to follow them, and the top twenty as of this hour are (the number is "times memed"):
ARKK includes three of the top twenty meme stocks: TSLA, PLTR, and SPOT.AMC 142
GME 103
AMD 61
TSLA 35
PLTR 24
TA 20
GE 19
AAPL 15
SU 12
FORD 9
RIOT 9
GDP 8
RKT 8
CAT 6
FB 6
FIT 6
SPOT 6
BB 5
CLF 5
FI 5
III 5
NUE 5
PRPL 5
API 4
A complicating factor is that Cathie Wood is followed closely so something might become a meme stock as a result of Wood choosing it, so it's hard to disentangle cause and effect.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
-
- Posts: 240
- Joined: Sat May 02, 2020 2:31 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
TQQQ is the answer when time is right. Not yet.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
For what its worth, I started a tracking portfolio with 100 shares in each ARK fund against iShares ITOT on Dec 18,2020. As of today, I'd be down 15.79% with ARK and up 10.40% with ITOT. Nuff said!
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
That's not the Boglehead way. You have to lose over at least a decade. I personally usually give up after two or three years.
If I used that argument in the international threads, folks would say I'm nuts. Folks here have made far less over the last ten years in International funds against US. But they still buy International. If you buy a bond fund, you're pretty much guaranteed to lose against inflation. Folks here still buy bond funds.
I guess the same argument can be applied to ARK. You have to be in it long enough for it to outperform. I think, Buffet gave hedge funds a decade. They all lost against the S&P 500, so he suggested folks buy it instead.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
It was actually a portfolio of hedge funds that lost. It is different and the more hedge funds the portfolio contains, the more Buffett's bet was a sure winner.
A different story would have been Buffett betting against a number of hedge funds individually. Then the story would have been the opposite: the more hedge funds accept the bet, ther more it is guaranteed that at least one will outperform the S&P and it could be a major overperformance !
btw Ms. Wood goes around forecasting "massive deflation" coming. Totally expected: everybody is forecasting higher inflation, so no brownie points to be gained there. Let's try an outlandish forecast: should she be right it would bring her back on the front pages. If it goes wrong, she will swipe it under the carpet.
-
- Posts: 230
- Joined: Tue Jan 21, 2020 10:16 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
A lot of these stocks are what r/wallstreetbets folks trade in, so to me they are meme stocks. Not to say they are worthless. Likely a lot of them are good companies, just not yet profitable.Lee_WSP wrote: ↑Wed May 19, 2021 7:05 pmYes, that is the list I was looking at. I don't recall any of the top ten being referred to as "meme" stocks. However, I'm not well versed in the craziness.Williams57 wrote: ↑Wed May 19, 2021 2:45 pmhttps://ark-funds.com/wp-content/fundsi ... LDINGS.pdfLee_WSP wrote: ↑Wed May 19, 2021 1:30 pmWhich stocks are those? Just curious. Their main holding is telsa at around ten percent.Williams57 wrote: ↑Wed May 19, 2021 10:25 amTo be honest I'm surprised it hasn't been dropping more given that there are a lot "meme" and overvalued (to put it mildly) stocks in the portfolio that have been dropping like crazy. I guess it's diversified enough lol. And there is still room for it to keep dropping. I wonder how low.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
I wouldn't say ARKK is full of meme stocks. I see no AMC, GME or anything. TSLA and Shopify were meme stocks years ago but obviously are now very large companies. She does have some strange holdings though that make up a small amount of the portfolio. As I said, I have no problems investing 5% of my taxable account with Cathie, but I would not be shocked to see underperformance.
- happyisland
- Posts: 915
- Joined: Thu Oct 03, 2013 1:36 pm
- Location: nos baranca tan stima
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
It is almost uncanny how well the OP called the top in ARKK.
-
- Posts: 1115
- Joined: Tue May 12, 2015 2:59 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
"By following traditional advice to get the cheapest total market fund, it has ended up costing people thousands of dollars more in opportunity cost.."
-OP's last sentence in the original comment
-OP's last sentence in the original comment
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
You can be right about the future and still be too early or get wrecked by market conditions. When you're managing other folks money the greater environment matters even if your bull case/techno revolution ends up coming to fruition.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
This is fascinating. OP called it perfectly. can't make this uphappyisland wrote: ↑Mon Sep 27, 2021 2:29 pm It is almost uncanny how well the OP called the top in ARKK.
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Reminds me of the poster who called the Covid crash perfectly and went all to cash at the peak, but didn't go back in fast enough...assyadh wrote: ↑Mon Sep 27, 2021 7:24 pmThis is fascinating. OP called it perfectly. can't make this uphappyisland wrote: ↑Mon Sep 27, 2021 2:29 pm It is almost uncanny how well the OP called the top in ARKK.
- nisiprius
- Advisory Board
- Posts: 52216
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
To be fair, from inception to 9/2021, the Ark Innovation ETF has far outperformed
Indeed: the only away an ARKK investor could have managed to underperform the S&P 500 would have been by waiting until 8/19/2020 to get in. Anyone who got in earlier has outperformed the S&P 500.
Similarly, the only way an investor could have have managed to lose money in ARKK would have been to wait until after 12/7/2020 to get in. Anyone who got in before then has made money.
That doesn't mean I think ARKK is a good idea. But the total silence in this thread from May until now suggests that talk about investing in ARKK for the long term was just talk. The interest in ARKK was just because it had doubled investors' money in a year. Once it quit looking as if it would be doing that every year, interest evaporated.
- The Vanguard Total Stock Market Index ETF, and the S&P 500
- The Vanguard Information Technology Index ETF
- The Invesco QQQ (Nasdaq-100 tracking) ETF
Indeed: the only away an ARKK investor could have managed to underperform the S&P 500 would have been by waiting until 8/19/2020 to get in. Anyone who got in earlier has outperformed the S&P 500.
Similarly, the only way an investor could have have managed to lose money in ARKK would have been to wait until after 12/7/2020 to get in. Anyone who got in before then has made money.
That doesn't mean I think ARKK is a good idea. But the total silence in this thread from May until now suggests that talk about investing in ARKK for the long term was just talk. The interest in ARKK was just because it had doubled investors' money in a year. Once it quit looking as if it would be doing that every year, interest evaporated.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
-
- Posts: 717
- Joined: Wed Mar 25, 2009 12:58 am
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Look at that volatility though.
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Too bad the OP was talking about buying ARKK in Feb 2021...nisiprius wrote: ↑Mon Sep 27, 2021 7:47 pm To be fair, from inception to 9/2021, the Ark Innovation ETF has far outperformed
- The Vanguard Total Stock Market Index ETF, and the S&P 500
- The Vanguard Information Technology Index ETF
- The Invesco QQQ (Nasdaq-100 tracking) ETF
Indeed: the only away an ARKK investor could have managed to underperform the S&P 500 would have been by waiting until 8/19/2020 to get in. Anyone who got in earlier has outperformed the S&P 500.
Similarly, the only way an investor could have have managed to lose money in ARKK would have been to wait until after 12/7/2020 to get in. Anyone who got in before then has made money.
That doesn't mean I think ARKK is a good idea. But the total silence in this thread from May until now suggests that talk about investing in ARKK for the long term was just talk. The interest in ARKK was just because it had doubled investors' money in a year. Once it quit looking as if it would be doing that every year, interest evaporated.
- nisiprius
- Advisory Board
- Posts: 52216
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Sure. Look at the Sharpe and Sortino ratios. The return, adjusted for risk, is only slightly higher than for VTI, and lower than for VGT and QQQ.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
-
- Posts: 9279
- Joined: Sun Dec 26, 2010 11:47 am
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
I know nothing about Cathie Wood or ARKK....I don't bother following this sort of thing ever since I converted to index funds in the early 2000s and that has saved me an amazing amount of priceless (!!!) time and agita. I do know when I was chasing the high performers in the 1990s I did great in spurts but overall, I ultimately did not beat the market.
I did notice a post by Nisiprius early in this thread that ARKK had a standard deviation of returns about double that of VTI.
Is it any surprise that a growth fund that takes that much more risk than the broad market might hugely outperform the broad market during a bull market over 4 years? I might even expect it. With the exception of a short steep market drop early in the pandemic the market has been screaming along to dizzying heights during the past 4 years when ARKK has allegedly been doing so well.
For those of us with decades of experience with the stock market, who have been through lots of steep ups and downs, that sort of thing means nothing. I wonder how ARKK would have fared in 2008. My guess is not well at all. But then again, I suppose my guess is no more valid than those guessing that it will continue to outperform ad infinitum. We are all bozos on this bus.
I did notice a post by Nisiprius early in this thread that ARKK had a standard deviation of returns about double that of VTI.
Is it any surprise that a growth fund that takes that much more risk than the broad market might hugely outperform the broad market during a bull market over 4 years? I might even expect it. With the exception of a short steep market drop early in the pandemic the market has been screaming along to dizzying heights during the past 4 years when ARKK has allegedly been doing so well.
For those of us with decades of experience with the stock market, who have been through lots of steep ups and downs, that sort of thing means nothing. I wonder how ARKK would have fared in 2008. My guess is not well at all. But then again, I suppose my guess is no more valid than those guessing that it will continue to outperform ad infinitum. We are all bozos on this bus.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
The OP abandoned Bogleheads nine days after starting this thread. Or at least they haven’t logged in since then.assyadh wrote: ↑Mon Sep 27, 2021 7:24 pmThis is fascinating. OP called it perfectly. can't make this uphappyisland wrote: ↑Mon Sep 27, 2021 2:29 pm It is almost uncanny how well the OP called the top in ARKK.
-
- Posts: 2007
- Joined: Mon Mar 02, 2020 4:33 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
OP returned back to the future.
Who knows, maybe we will catch up with him in time, and he will post here again.
Who knows, maybe we will catch up with him in time, and he will post here again.
-
- Posts: 15365
- Joined: Fri Apr 10, 2015 12:29 am
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Maybe what you are missing is you invest in the future, not in the past. Your original post was Feb 2021.Bwlonge wrote: ↑Sat Feb 13, 2021 5:52 pm I've been looking into the ARK ETFs and this forum is a place I tend to look for financial opinions.
The posts I've seen here, unsurprisingly, have negative sentiments toward ARK funds. Bogleheads are happy to have money in passive low ER funds. I followed that advice for a while but it ended up leaving a ton of money on the table.
Pre-pandemic, 2015-2020, QQQ out performed VTI 117% to 60%. ARKK outperformed VTI 161% to 60%.
What am I missing here? For a 401k or IRA that's going to sit for 30 years, is the total market fund advice really relevant anymore?
By following traditional advice to get the cheapest total market fund, it has ended up costing people thousands of dollars more in opportunity cost.
https://www.portfoliovisualizer.com/bac ... ion2_2=100
-
- Posts: 15365
- Joined: Fri Apr 10, 2015 12:29 am
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
The time horizon argument applies to asset classes, which are collections of investments that are exposed to the same systematic risk factors within the class. While an asset class may underperform indefinitely, we expect a systematic risk factor to be rewarded with a premium that we expect to be realized given enough time.rockstar wrote: ↑Wed May 19, 2021 9:55 pmThat's not the Boglehead way. You have to lose over at least a decade. I personally usually give up after two or three years.
If I used that argument in the international threads, folks would say I'm nuts. Folks here have made far less over the last ten years in International funds against US. But they still buy International. If you buy a bond fund, you're pretty much guaranteed to lose against inflation. Folks here still buy bond funds.
I guess the same argument can be applied to ARK. You have to be in it long enough for it to outperform...
An actively managed portfolio is not synonymous with an asset class. An actively managed portfolio could underperform indefinitely with no reason to expect otherwise if the managers are changing the asset classes to which the portfolio is exposed.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
That's PRECISELY the problem. The vast majority of investors don't pile into a fund until AFTER it's hot.
I bet more than 50% of people who invested in ARKK underperformed, because most people didn't invest in it at inception or the early years. Not until the big returns showed up, THEN people heard about it and invested.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
-
- Posts: 15365
- Joined: Fri Apr 10, 2015 12:29 am
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Nah, the real problem is that it is/was little more than a concentrated sector bet that happened to pay off.
-
- Posts: 10433
- Joined: Mon May 18, 2009 5:57 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
A very interesting data point would be the average or weighted average INVESTOR return rather than the fund's return. I guarantee you that for all of the popular and hot actively managed funds, the pattern would be the fund's return is much higher than the investors return.HomerJ wrote: ↑Wed Sep 29, 2021 6:17 pmThat's PRECISELY the problem. The vast majority of investors don't pile into a fund until AFTER it's hot.
I bet more than 50% of people who invested in ARKK underperformed, because most people didn't invest in it at inception or the early years. Not until the big returns showed up, THEN people heard about it and invested.
Funds get big because investors chase performance. The performance comes before the investors because investors don't even know it exists until the high flying performance has already taken place.
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Yep. A former coworker changed jobs in the beginning of the year, rolled his 401k into a tIRA and bought ARKK in January/February 2021...Triple digit golfer wrote: ↑Wed Sep 29, 2021 6:36 pmA very interesting data point would be the average or weighted average INVESTOR return rather than the fund's return. I guarantee you that for all of the popular and hot actively managed funds, the pattern would be the fund's return is much higher than the investors return.HomerJ wrote: ↑Wed Sep 29, 2021 6:17 pmThat's PRECISELY the problem. The vast majority of investors don't pile into a fund until AFTER it's hot.
I bet more than 50% of people who invested in ARKK underperformed, because most people didn't invest in it at inception or the early years. Not until the big returns showed up, THEN people heard about it and invested.
Funds get big because investors chase performance. The performance comes before the investors because investors don't even know it exists until the high flying performance has already taken place.
-
- Posts: 10433
- Joined: Mon May 18, 2009 5:57 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Yep, one of probably tens of thousands.anon_investor wrote: ↑Wed Sep 29, 2021 6:38 pmYep. A former coworker changed jobs in the beginning of the year, rolled his 401k into a tIRA and bought ARKK in January/February 2021...Triple digit golfer wrote: ↑Wed Sep 29, 2021 6:36 pmA very interesting data point would be the average or weighted average INVESTOR return rather than the fund's return. I guarantee you that for all of the popular and hot actively managed funds, the pattern would be the fund's return is much higher than the investors return.HomerJ wrote: ↑Wed Sep 29, 2021 6:17 pmThat's PRECISELY the problem. The vast majority of investors don't pile into a fund until AFTER it's hot.
I bet more than 50% of people who invested in ARKK underperformed, because most people didn't invest in it at inception or the early years. Not until the big returns showed up, THEN people heard about it and invested.
Funds get big because investors chase performance. The performance comes before the investors because investors don't even know it exists until the high flying performance has already taken place.
-
- Posts: 49038
- Joined: Fri May 11, 2007 11:07 am
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
OP gave up on this Forum, it appears.Northern Flicker wrote: ↑Tue Sep 28, 2021 1:21 amMaybe what you are missing is you invest in the future, not in the past. Your original post was Feb 2021.Bwlonge wrote: ↑Sat Feb 13, 2021 5:52 pm I've been looking into the ARK ETFs and this forum is a place I tend to look for financial opinions.
The posts I've seen here, unsurprisingly, have negative sentiments toward ARK funds. Bogleheads are happy to have money in passive low ER funds. I followed that advice for a while but it ended up leaving a ton of money on the table.
Pre-pandemic, 2015-2020, QQQ out performed VTI 117% to 60%. ARKK outperformed VTI 161% to 60%.
What am I missing here? For a 401k or IRA that's going to sit for 30 years, is the total market fund advice really relevant anymore?
By following traditional advice to get the cheapest total market fund, it has ended up costing people thousands of dollars more in opportunity cost.
https://www.portfoliovisualizer.com/bac ... ion2_2=100
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Did OP stuck with ARKK...i mean since the first post on 2-13-2021: ARKK returned -28.2% and VTI returned +9.5%...are people disciplined enough to "stick" with ARKK???
-
- Posts: 254
- Joined: Wed Jul 01, 2020 9:56 pm
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Post should be retitled to "Why the disdain for managed funds like ARKK that destro[ed] total market funds [last year]?" ARKK has been around for a blip on the timeline compared to the S&P 500 and the TSM.
- anon_investor
- Posts: 15122
- Joined: Mon Jun 03, 2019 1:43 pm
- xraygoggles
- Posts: 308
- Joined: Sat Sep 15, 2018 3:30 pm
- Location: Paradise
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
"Cathie Wood’s flagship, the ARK Innovation ETF (ticker ARKK), has almost certainly just recorded its biggest ever quarter of outflows, with about $1.97 billion leaving the popular exchange-traded fund through to late September."
(https://www.bloomberg.com/news/articles ... d-ku87wo80)
Hmmm. perhaps OP was a part of that large outflow from ARKK last quarter? Since he/she has been eerily quiet since the first post.
(https://www.bloomberg.com/news/articles ... d-ku87wo80)
Hmmm. perhaps OP was a part of that large outflow from ARKK last quarter? Since he/she has been eerily quiet since the first post.
Simplicity is the key to brilliance - Vti & chill.
Re: Why the disdain for managed funds like ARKK that destroy total market funds?
Well, if you think she has good insight into the market and lucky then now is likely a good time to invest in her…xraygoggles wrote: ↑Mon Oct 04, 2021 2:22 pm "Cathie Wood’s flagship, the ARK Innovation ETF (ticker ARKK), has almost certainly just recorded its biggest ever quarter of outflows, with about $1.97 billion leaving the popular exchange-traded fund through to late September."
(https://www.bloomberg.com/news/articles ... d-ku87wo80)
Hmmm. perhaps OP was a part of that large outflow from ARKK last quarter? Since he/she has been eerily quiet since the first post.
“I know he's a good general, but is he lucky?”
— Napoleon Bonaparte