Why the disdain for managed funds like ARKK that destroy total market funds?

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chris319
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

She was of course very positive about the future outlook for ARK and said their models currently project a 40%/yr. compound rate of return for the next 5 years. That's better than their models have ever projected before. You would quadruple your investment in 5 years. I have been listening to sales pitches for 35 years and I've never heard a more optimistic forecast, not only the numbers but the tone of her voice and her enthusiasm. She exuded a strong sense of certainty about achieving those returns.
Oh puh-leeze.

I hope you didn't fall for this propaganda.
Financial decisions based on emotion often turn out to be bad decisions.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by GoldenFinch »

chris319 wrote: Thu Dec 09, 2021 9:07 pm
She was of course very positive about the future outlook for ARK and said their models currently project a 40%/yr. compound rate of return for the next 5 years. That's better than their models have ever projected before. You would quadruple your investment in 5 years. I have been listening to sales pitches for 35 years and I've never heard a more optimistic forecast, not only the numbers but the tone of her voice and her enthusiasm. She exuded a strong sense of certainty about achieving those returns.
Oh puh-leeze.

I hope you didn't fall for this propaganda.
She speaks with extraordinary confidence. Today she seemed to be doing hard sales on multiple TV stations. I guess it’s a PR move.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by mikeyzito22 »

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.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

GoldenFinch wrote: Thu Dec 09, 2021 9:21 pm She speaks with extraordinary confidence. Today she seemed to be doing hard sales on multiple TV stations. I guess it’s a PR move.
Did she appear on CNBC?

Clearly they're doing damage control. It's the end of the year and shareholders of ARKK are wondering WTF? So she has to put on a happy face for the camera and get shareholders salivating at the prospect of 40% gains by citing her "models". Any idea if the fund is experiencing more outflows than usual?

Old saying: "mutual funds aren't bought; they're sold".
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Random Musings »

chris319 wrote: Thu Dec 09, 2021 10:10 pm
GoldenFinch wrote: Thu Dec 09, 2021 9:21 pm She speaks with extraordinary confidence. Today she seemed to be doing hard sales on multiple TV stations. I guess it’s a PR move.
Did she appear on CNBC?

Clearly they're doing damage control. It's the end of the year and shareholders of ARKK are wondering WTF? So she has to put on a happy face for the camera and get shareholders salivating at the prospect of 40% gains by citing her "models". Any idea if the fund is experiencing more outflows than usual?

Old saying: "mutual funds aren't bought; they're sold".
If the company was transparent, they should have been kind enough to mention their models were showing poor returns for 2021. :oops: 40% returns is a pitch coming from a snake oil salesmen. The interviewers should have called her out on that prognosis. However, the viewers are not really their customers.

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

If the company was transparent, they should have been kind enough to mention their models were showing poor returns for 2021. :oops:
Maybe their models were wrong? If the models were right, scaring off fee-paying shareholders is not a good way to run a mutual fund company.
40% returns is a pitch coming from a snake oil salesmen.
That much is self evident.

Forecasting 40% for one year is outlandish. Forecasting it for 5 years you're either lying or you need to put down the crack pipe.
Financial decisions based on emotion often turn out to be bad decisions.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Noobvestor »

nisiprius wrote: Wed Nov 17, 2021 5:53 pm
MinnGuyInvesting wrote: Wed Nov 17, 2021 1:27 pm I continue to hold my ARK holdings.

2021 has not been a great year (especially for ARK-G) but I'm happily holding these funds and continue to expect good things in the next few years as part of my portfolio.

I also hold other assets that are non-Bogleheadish as part of my investment strategy.
Although I personally think ARK is a bunch of hooey and definitely not my thing, I think the plain facts should be acknowledged.

The total performance of ARKK even going back all the way to inception and including some lackluster years, has been excellent.

The pullback since the top, so far, has been small compared to what went before.

You could give half of the gain back and still be ahead of the S&P 500.

You won on this gamble, and you are so far ahead that you have the luxury of being able to lose quite a bit more and still quit while you're head.

source

Image
Unfortunately, most investors have failed to capture that return. Heavy inflows toward the top, etc...
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Northern Flicker »

If funds with deep value exposure and funds with a heavy growth tilt exist, one of the categories will always post robust overperformance when its style wins out. Then all you have to do is pick successfully which one it will be and you will overperform.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by canadianbacon »

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by stormcrow »

Noobvestor wrote: Fri Dec 10, 2021 2:41 am
nisiprius wrote: Wed Nov 17, 2021 5:53 pm
You could give half of the gain back and still be ahead of the S&P 500.

You won on this gamble, and you are so far ahead that you have the luxury of being able to lose quite a bit more and still quit while you're head.

source

Image
Unfortunately, most investors have failed to capture that return. Heavy inflows toward the top, etc...
Looking at this chart and ARKK's holdings, it seems like there was some moderate outperformance up until March 2020.Then, it looks like the fund, with its 10%+ allocation to TSLA has been riding the gamma squeeze/FOMO-palooza that stock has had. I am having a hard time imagining outside of TSLA continuing to expand how the fund doesn't quickly and painfully regress closer to the mean.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HyperCat »

chris319 wrote: Fri Dec 10, 2021 2:02 am
If the company was transparent, they should have been kind enough to mention their models were showing poor returns for 2021. :oops:
Maybe their models were wrong? If the models were right, scaring off fee-paying shareholders is not a good way to run a mutual fund company.
That's sort of the unspoken point though. Either their models are accurate and they weren't transparent about their projections or (and this is almost certainly the case) their models are crap. Either way, you can't trust what they say.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Laurizas »

How to interpret this chart?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

stormcrow wrote: Fri Dec 10, 2021 8:14 am
nisiprius wrote: Wed Nov 17, 2021 5:53 pm Image
Looking at this chart and ARKK's holdings, it seems like there was some moderate outperformance up until March 2020.Then, it looks like the fund, with its 10%+ allocation to TSLA has been riding the gamma squeeze/FOMO-palooza that stock has had. I am having a hard time imagining outside of TSLA continuing to expand how the fund doesn't quickly and painfully regress closer to the mean.
Look, I agree with you. But ARKK hasn't blown up yet, or anything like it. Current losses since the peak are small compared to the previous gains. And you need to look more closely at the chart. It didn't just outperform in 2020, the performance in 2017 was stunning. It just looks like a yawn because 2020 was even more stunning.

I don't know why people weren't gushing over ARKK at the end of 2017. It was even an opportunity to get in at the end of a fabulous run and not have to wait very long for the next one.

An average of 40%/year over the next five years seems like crazy braggadocio to me, but it should be noted that it is exactly ARKK has already done once before. It has averaged over 40%/year for the last five years. So she is just claiming she can repeat what she has actually done once before.

Can lightning strike three times?
Last edited by nisiprius on Fri Dec 10, 2021 10:31 am, edited 3 times in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nigel_ht »

Laurizas wrote: Fri Dec 10, 2021 9:33 am
How to interpret this chart?
https://www.investopedia.com/terms/m/mo ... return.asp

It strikes me that a TWRR is a better indicator…
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e: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Taylor Larimore »

Bogleheads:

The ARKK managed fund has enjoyed great past performance which has attracted thousands of investors. Fortunately, most bogleheads understand the danger of using past performance to select mutual funds.

What experts say about past performance:

viewtopic.php?f=10&t=156573&newpost=2349057

Best wishes.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 1789 »

About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dogagility »

1789 wrote: Fri Dec 10, 2021 1:26 pm About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
Perhaps you can time the market successfully by doing the opposite of what your friend does... :D
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by tsohg »

1789 wrote: Fri Dec 10, 2021 1:26 pm About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
Your friend's experience sounds like a common one. Can anyone hazard a guess at what the following chart will look like over the next 5 years? My bet would be on massive outflows.

Image
I don't know why people weren't gushing over ARKK at the end of 2017. It was even an opportunity to get in at the end of a fabulous run and not have to wait very long for the next one.
Why are we discussing returns in 2017 when (relatively speaking) no one was invested to achieve those returns? There's a much better chance this fund will cease to exist in 5 years than it will achieve 40% yearly growth. :oops:
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

tsohg wrote: Fri Dec 10, 2021 2:58 pm
1789 wrote: Fri Dec 10, 2021 1:26 pm About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
Your friend's experience sounds like a common one. Can anyone hazard a guess at what the following chart will look like over the next 5 years? My bet would be on massive outflows.

Image
I don't know why people weren't gushing over ARKK at the end of 2017. It was even an opportunity to get in at the end of a fabulous run and not have to wait very long for the next one.
Why are we discussing returns in 2017 when (relatively speaking) no one was invested to achieve those returns? There's a much better chance this fund will cease to exist in 5 years than it will achieve 40% yearly growth. :oops:
See, that's an EXCELLENT graph...

Showing returns from inception from any mutual fund doesn't prove anything...

The VAST majority of investors never see those returns. It's not until AFTER the fund has huge returns, and makes the news feeds, and the top-10 funds of the year lists, THEN the investors pile in.

So not only do they miss the big initial returns, but then they also make it harder for the fund manager to continue to hit outsize returns.

40% a year is possible when you have a smaller fund and you can make big bets on a few select companies.

When you have $50 billion under management, it's a lot harder to find large enough companies that will grow that much. You're investing in all the same large tech companies that every other active tech fund manager is investing in.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

tsohg wrote: Fri Dec 10, 2021 2:58 pm Image
Also, think of the profit implicit in that chart...

1% fees on $3 billion is $30 million.

It jumps to $20-$30 billion, and they are suddenly making $200 million a year. And they didn't ramp up their operations that much in one year. Maybe they hired a few more people. But they ran for 5+ years on the $30 million a year revenue, and suddenly they jump to $200 million?

Totally rewards taking crazy risks in a fund. If it crashes and burns, you close the fund, and start over. If you get lucky, you make a couple hundred million a year. Every year. For as long as you can convince people to stick with you.

So, yeah I'd sound really confident too about 40% returns over the next 5 years...

Every year she can keep the money under management is an extra TWO HUNDRED MILLION DOLLARS.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 000 »

HomerJ wrote: Fri Dec 10, 2021 6:44 pm Also, think of the profit implicit in that chart...

1% fees on $3 billion is $30 million.

It jumps to $20-$30 billion, and they are suddenly making $200 million a year. And they didn't ramp up their operations that much in one year. Maybe they hired a few more people. But they ran for 5+ years on the $30 million a year revenue, and suddenly they jump to $200 million?

Totally rewards taking crazy risks in a fund. If it crashes and burns, you close the fund, and start over. If you get lucky, you make a couple hundred million a year. Every year. For as long as you can convince people to stick with you.

So, yeah I'd sound really confident too about 40% returns over the next 5 years...

Every year she can keep the money under management is an extra TWO HUNDRED MILLION DOLLARS.
Their ER is not 1% though. :oops:
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Elysium »

nisiprius wrote: Fri Dec 10, 2021 9:46 am
stormcrow wrote: Fri Dec 10, 2021 8:14 am
nisiprius wrote: Wed Nov 17, 2021 5:53 pm Image
Looking at this chart and ARKK's holdings, it seems like there was some moderate outperformance up until March 2020.Then, it looks like the fund, with its 10%+ allocation to TSLA has been riding the gamma squeeze/FOMO-palooza that stock has had. I am having a hard time imagining outside of TSLA continuing to expand how the fund doesn't quickly and painfully regress closer to the mean.
Look, I agree with you. But ARKK hasn't blown up yet, or anything like it. Current losses since the peak are small compared to the previous gains. And you need to look more closely at the chart. It didn't just outperform in 2020, the performance in 2017 was stunning. It just looks like a yawn because 2020 was even more stunning.

I don't know why people weren't gushing over ARKK at the end of 2017. It was even an opportunity to get in at the end of a fabulous run and not have to wait very long for the next one.

An average of 40%/year over the next five years seems like crazy braggadocio to me, but it should be noted that it is exactly ARKK has already done once before. It has averaged over 40%/year for the last five years. So she is just claiming she can repeat what she has actually done once before.

Can lightning strike three times?
Graphs like these showing annualized returns are many times misleading, especially when they don't go out 30 years or more. That's when a look at year over year return are helpful. Okay, so two years out of a six since 2015 were the contributing factors to this 40% claim. Out of those two, the 152% in 2020 was a complete blind luck on TSLA, which made no sense, still does not. ARK and it's manager will eventually join the ranks of former super managers such as Berkowitz that no one now wish to talk about, or perhaps she is the real oracle who disappeared from the matrix to show up at ark investments. :wink:
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

000 wrote: Fri Dec 10, 2021 6:56 pm
HomerJ wrote: Fri Dec 10, 2021 6:44 pm Also, think of the profit implicit in that chart...

1% fees on $3 billion is $30 million.

It jumps to $20-$30 billion, and they are suddenly making $200 million a year. And they didn't ramp up their operations that much in one year. Maybe they hired a few more people. But they ran for 5+ years on the $30 million a year revenue, and suddenly they jump to $200 million?

Totally rewards taking crazy risks in a fund. If it crashes and burns, you close the fund, and start over. If you get lucky, you make a couple hundred million a year. Every year. For as long as you can convince people to stick with you.

So, yeah I'd sound really confident too about 40% returns over the next 5 years...

Every year she can keep the money under management is an extra TWO HUNDRED MILLION DOLLARS.
Their ER is not 1% though. :oops:
Really? Come on 000.. You're already THAT guy way too much of the time. Do you really have to be THAT guy all the time?

I didn't look it up... sorry... so it's 0.75%, not 1%.

Does it REALLY change my point that her fund went from making (ugh, now I have to open up the calculator app, which is what I was avoiding when I used 1%) $22.5 million a year, and apparently everyone was happy, because the fund hadn't closed...

To $150 million a year.

So every year she keeps people from bailing, she's making an extra $125,000,000. Each year. EVERY year.

Of course she's going to promise 40% returns, and she's going to sound super confident when she says it. And that's just one of her funds right?

You guys don't get it.

These managers don't get rich growing their own money over the long run with great investments. They get rich from the FEES.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Ocean77 »

Reminds me of the types like Mary Meeker, Henry Blodget, Van Wagoner etc, for those here old enough to remember. They were the stars of the 1990s, peddling internet stocks and getting outsize returns. Soon after they had to hide under the stairs.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 1789 »

dogagility wrote: Fri Dec 10, 2021 2:21 pm
1789 wrote: Fri Dec 10, 2021 1:26 pm About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
Perhaps you can time the market successfully by doing the opposite of what your friend does... :D
Actually good idea. Whatever and whenever he does something i should just do opposite 🤣😂
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 000 »

HomerJ wrote: Fri Dec 10, 2021 8:45 pm Really? Come on 000.. You're already THAT guy way too much of the time. Do you really have to be THAT guy all the time?

I didn't look it up... sorry... so it's 0.75%, not 1%.

Does it REALLY change my point that her fund went from making (ugh, now I have to open up the calculator app, which is what I was avoiding when I used 1%) $22.5 million a year, and apparently everyone was happy, because the fund hadn't closed...

To $150 million a year.

So every year she keeps people from bailing, she's making an extra $125,000,000. Each year. EVERY year.

Of course she's going to promise 40% returns, and she's going to sound super confident when she says it. And that's just one of her funds right?

You guys don't get it.

These managers don't get rich growing their own money over the long run with great investments. They get rich from the FEES.
Sorry, but 25% (or we could say 33%) off is a huge error. :mrgreen:

It also reveals your level of research did not even include going to the fund's homepage or reading page two of this thread. :!:

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

40% a year is possible when you have a smaller fund and you can make big bets on a few select companies.
For 5 years as Cathie Wood promises?

She's just blown her credibility with me.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

chris319 wrote: Fri Dec 10, 2021 10:19 pm
40% a year is possible when you have a smaller fund and you can make big bets on a few select companies.
For 5 years as Cathie Wood promises?

She's just blown her credibility with me.
She has a large fund now which makes it even more unlikely.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by wrongfunds »

Suppose I did put 100k in ARK today and next year it does go to 140k

Do I liquidate it then or wait for another year for it to become 196k?

You get my drift. The issue is not getting in. That is somewhat easy. How to get out? That is the hard part when you start putting your bets in individual stocks or individual active funds
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by firebirdparts »

I have the same problem ^^^^^.

I figure if you can only be one thing, be confident. It works. It doesn't help your fund, of course, but it sure helps your salary, and honestly it works in all your personal relationships too.

If you had to wish to be a little dumber to get that confidence, it's probably worth it.

After S&P500-invested money quadrupled from 2010 to 2020, I kinda changed my attitude about what I consider a 'bold' prediction, though.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

wrongfunds wrote: Sat Dec 11, 2021 10:23 am Suppose I did put 100k in ARK today and next year it does go to 140k

Do I liquidate it then or wait for another year for it to become 196k?

You get my drift. The issue is not getting in. That is somewhat easy. How to get out? That is the hard part when you start putting your bets in individual stocks or individual active funds
If Cathie Wood is as good as she thinks she is, you keep it in there forever and she will make you a zillionaire!
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by wrongfunds »

Given that I had seen my Nortel Lucent and Palm evaporate on me in dot com era, that would be rather difficult for me
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by abuss368 »

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.
ARKK have had excellent past performance. The question becomes is that performance sustainable. Most active funds have there day in the sun before fizzling out.

With thousands of funds to chose from, the probability of an individual investor selecting the best fund is is close to impossible. If the Wall Street machine, with its unlimited resources, brightest minds, and unlimited research can not do this consistently, the “little guy” stands no chance.

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by SeasOfCheese »

I used to own ARKK back when it was called PBHG Growth.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by phxjcc »

chris319 wrote: Thu Dec 09, 2021 9:07 pm
She was of course very positive about the future outlook for ARK and said their models currently project a 40%/yr. compound rate of return for the next 5 years. That's better than their models have ever projected before. You would quadruple your investment in 5 years. I have been listening to sales pitches for 35 years and I've never heard a more optimistic forecast, not only the numbers but the tone of her voice and her enthusiasm. She exuded a strong sense of certainty about achieving those returns.
Oh puh-leeze.

I hope you didn't fall for this propaganda.
I have no dog in this hunt.

But, checking NAsdaq and SP 500 trailing 3 years, this would not seem like rocket surgery. If there is a black swan event, she has an out. Otherwise she can cherry pick winners and forget the losers and she has to barely exceed total market returns to get her numbers.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Doc7 »

I bought some ARKK in early Feb 2021 and I sold it on February 8th 2021 because i knew i should be staying the course on total index funds.

Since that day, ITOT : +14%
ARKK : -39%


of course it could be exactly opposite in the next 12 months. but holding total market i'll never feel i made a "wrong" decision.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by an_asker »

MinnGuyInvesting wrote: Wed Nov 17, 2021 1:27 pm I continue to hold my ARK holdings.

2021 has not been a great year (especially for ARK-G) but I'm happily holding these funds and continue to expect good things in the next few years as part of my portfolio.

I also hold other assets that are non-Bogleheadish as part of my investment strategy.
Just curious - I have not been keeping track but a) are the numbers in your signature up to date and b) have they been unchanged as well?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

mikeyzito22 wrote: Thu Dec 09, 2021 10:01 pm
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.
“Rule number 1: Never lose money. Rule number 2: Don’t forget rule number 1.”-Warren Buffet.
:sharebeer
I guess that means don't own Buffett's company. It had a -44% drawdown during the GFC and didn't recover until 2013.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

Noobvestor wrote: Fri Dec 10, 2021 2:41 am
nisiprius wrote: Wed Nov 17, 2021 5:53 pm
MinnGuyInvesting wrote: Wed Nov 17, 2021 1:27 pm I continue to hold my ARK holdings.

2021 has not been a great year (especially for ARK-G) but I'm happily holding these funds and continue to expect good things in the next few years as part of my portfolio.

I also hold other assets that are non-Bogleheadish as part of my investment strategy.
Although I personally think ARK is a bunch of hooey and definitely not my thing, I think the plain facts should be acknowledged.

The total performance of ARKK even going back all the way to inception and including some lackluster years, has been excellent.

The pullback since the top, so far, has been small compared to what went before.

You could give half of the gain back and still be ahead of the S&P 500.

You won on this gamble, and you are so far ahead that you have the luxury of being able to lose quite a bit more and still quit while you're head.

source

Image
Unfortunately, most investors have failed to capture that return. Heavy inflows toward the top, etc...
This kind of thing seems to happen so often that I would almost be tempted to find the active funds that have recently performed well, and when their inflows increase dramatically, short them.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Triple digit golfer »

willthrill81 wrote: Tue Dec 14, 2021 3:00 pm
mikeyzito22 wrote: Thu Dec 09, 2021 10:01 pm
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.
“Rule number 1: Never lose money. Rule number 2: Don’t forget rule number 1.”-Warren Buffet.
:sharebeer
I guess that means don't own Buffett's company. It had a -44% drawdown during the GFC and didn't recover until 2013.
I don't understand the idolatry for him around here. He is regularly vague, probably intentionally, and his "rules" don't apply for the average investor.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

Triple digit golfer wrote: Tue Dec 14, 2021 3:08 pm
willthrill81 wrote: Tue Dec 14, 2021 3:00 pm
mikeyzito22 wrote: Thu Dec 09, 2021 10:01 pm
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.
“Rule number 1: Never lose money. Rule number 2: Don’t forget rule number 1.”-Warren Buffet.
:sharebeer
I guess that means don't own Buffett's company. It had a -44% drawdown during the GFC and didn't recover until 2013.
I don't understand the idolatry for him around here. He is regularly vague, probably intentionally, and his "rules" don't apply for the average investor.
I believe that he has been a great investor, but the problem is that his strategy doesn't scale well. He's on record saying that it's easy to beat the market with a comparatively small amount of money but much harder to do so with tens of billions. And yes, much of his advice is vague, and much of the rest doesn't apply to the average investor.
Last edited by willthrill81 on Tue Dec 14, 2021 3:12 pm, edited 1 time in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

Berkshire was a great investment up until the GFC. Even the great ones cannot beat the market forever. I believe Buffett himself said once you get big enough, you cannot beat the market.

I obviously am not thrilled with ARKK's performance in 2021, but it's the risky portion of my portfolio so I expect it to fluctuate wildly.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Escapevelocity »

SeasOfCheese wrote: Sat Dec 11, 2021 4:25 pm I used to own ARKK back when it was called PBHG Growth.
And I owned ARKK back in the 90s when it was called Van Wagoner emerging growth.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dogagility »

Escapevelocity wrote: Tue Dec 14, 2021 3:20 pm
SeasOfCheese wrote: Sat Dec 11, 2021 4:25 pm I used to own ARKK back when it was called PBHG Growth.
And I owned ARKK back in the 90s when it was called Van Wagoner emerging growth.
Makes me think of the Porter Wagoner tune Misery Loves Company. :D
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Escapevelocity »

dogagility wrote: Tue Dec 14, 2021 4:07 pm
Escapevelocity wrote: Tue Dec 14, 2021 3:20 pm
SeasOfCheese wrote: Sat Dec 11, 2021 4:25 pm I used to own ARKK back when it was called PBHG Growth.
And I owned ARKK back in the 90s when it was called Van Wagoner emerging growth.
Makes me think of the Porter Wagoner tune Misery Loves Company. :D
A couple good reads about the Cathie Wood of 1999:
https://www.kiplinger.com/article/inves ... -fund.html
https://www.institutionalinvestor.com/a ... 1990s-Icon
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by 000 »

willthrill81 wrote: Tue Dec 14, 2021 3:00 pm
mikeyzito22 wrote: Thu Dec 09, 2021 10:01 pm
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.
“Rule number 1: Never lose money. Rule number 2: Don’t forget rule number 1.”-Warren Buffet.
:sharebeer
I guess that means don't own Buffett's company. It had a -44% drawdown during the GFC and didn't recover until 2013.
lol exactly
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by iamlucky13 »

dogagility wrote: Fri Dec 10, 2021 2:21 pm
1789 wrote: Fri Dec 10, 2021 1:26 pm About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
Perhaps you can time the market successfully by doing the opposite of what your friend does... :D
There's an XKCD for that:

https://xkcd.com/2270/
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by buckeye7983 »

Over the past five years, for example, the fund’s 41.3% annualized return places it among the top five best-performing U.S. equity funds and ETFs, and it trounced the S&P 500 (the benchmark listed in its prospectus) by more than 15 percentage points per year. After the adjusting for the timing of cash inflows and outflows, though, we estimate that investors earned less than a fourth of that return. ARKK’s estimated 9.9% investor return over the past five years lagged its benchmark by about 8 percentage points per year.
https://www.morningstar.com/articles/10 ... -to-invest
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

iamlucky13 wrote: Tue Dec 14, 2021 5:40 pm
dogagility wrote: Fri Dec 10, 2021 2:21 pm
1789 wrote: Fri Dec 10, 2021 1:26 pm About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
Perhaps you can time the market successfully by doing the opposite of what your friend does... :D
There's an XKCD for that:

https://xkcd.com/2270/
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