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

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

Post by lazydavid »

JonnyDVM wrote: Mon Feb 15, 2021 10:09 am
vineviz wrote: Mon Feb 15, 2021 9:57 am
JonnyDVM wrote: Mon Feb 15, 2021 9:29 am You think the bubble is going to burst within 6 months? Meh, I'll take my chances.
I have no idea what ARKK will do over the next 6 months, but surely a 60% drop isn't difficult to imagine for even the most ardent fan.
I can imagine only 60% more gain over that time period, and that feels like a worst-case scenario. A drop is inconceiveable.
Granted it's been 6 weeks rather than 6 months, but since this post, ARKK has "inconceivably" fallen 29.1%. Only needs a 125.4% gain in the next 4.5 months to align with your imagination!
Very prescient of you though, making this prediction while ARKK was at it's all time high, before beginning its decent literally the very next day. :sharebeer
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

lazydavid wrote: Tue Mar 30, 2021 3:49 pm
JonnyDVM wrote: Mon Feb 15, 2021 10:09 am
vineviz wrote: Mon Feb 15, 2021 9:57 am
JonnyDVM wrote: Mon Feb 15, 2021 9:29 am You think the bubble is going to burst within 6 months? Meh, I'll take my chances.
I have no idea what ARKK will do over the next 6 months, but surely a 60% drop isn't difficult to imagine for even the most ardent fan.
I can imagine only 60% more gain over that time period, and that feels like a worst-case scenario. A drop is inconceiveable.
Granted it's been 6 weeks rather than 6 months, but since this post, ARKK has "inconceivably" fallen 29.1%. Only needs a 125.4% gain in the next 4.5 months to align with your imagination!
Very prescient of you though, making this prediction while ARKK was at it's all time high, before beginning its decent literally the very next day. :sharebeer
It did have a nice bounce at the $110 mark today, which was a level the chart readers had said would spell more pain if ARKK closed below $110. If by some chance it drops below $100, I may be tempted to throw a little more money into it. I'm not convinced rates will go that much higher.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

hnd wrote: Tue Mar 30, 2021 1:51 pm i mean i get it but its kind of a little silly to point out a 3 month dip in something and be like "SEE!!! GARBAGE!!"
It's almost as silly to point out a one-year gain in something that has been taking big, concentrated, risky bets, and say "see, genius."
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Toons »

History Is Doomed To Repeat Itself

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

Post by unclescrooge »

watchnerd wrote: Tue Mar 30, 2021 9:14 am
atdharris wrote: Tue Mar 30, 2021 8:29 am I don't see an issue with holding some ARKK. I have about 5% of my portfolio in it. If Cathie Wood's thesis is correct, the fund could crush the market for years to come. It's a gamble, but people that buy it should understand it's a gamble. I don't think this current sell-off will last forever. Eventually, the market will rotate back into technology and growth.
5% isn't going to make or break you either way, so you can swing for the fences without big downside risk.

But some posters in this thread are 39% ARKK, according to their signatures....
Are you sure they didn't mean down 39% on ARKK? 😜😄
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dixdak »

Well tomorrow is end of month so we shall see if Mr39% will give us his promised update. I’m sure it’s less fun than the February taunting.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by birdog »

nisiprius wrote: Tue Mar 30, 2021 4:33 pm
hnd wrote: Tue Mar 30, 2021 1:51 pm i mean i get it but its kind of a little silly to point out a 3 month dip in something and be like "SEE!!! GARBAGE!!"
It's almost as silly to point out a one-year gain in something that has been taking big, concentrated, risky bets, and say "see, genius."
Bingo. Zoom out even further and things fall in line even more. Over any investing timeline that matters, I’ll stick with the index.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by JonnyDVM »

lazydavid wrote: Tue Mar 30, 2021 3:49 pm
JonnyDVM wrote: Mon Feb 15, 2021 10:09 am
vineviz wrote: Mon Feb 15, 2021 9:57 am
JonnyDVM wrote: Mon Feb 15, 2021 9:29 am You think the bubble is going to burst within 6 months? Meh, I'll take my chances.
I have no idea what ARKK will do over the next 6 months, but surely a 60% drop isn't difficult to imagine for even the most ardent fan.
I can imagine only 60% more gain over that time period, and that feels like a worst-case scenario. A drop is inconceiveable.
Granted it's been 6 weeks rather than 6 months, but since this post, ARKK has "inconceivably" fallen 29.1%. Only needs a 125.4% gain in the next 4.5 months to align with your imagination!
Very prescient of you though, making this prediction while ARKK was at it's all time high, before beginning its decent literally the very next day. :sharebeer
125% seems light. 175% feels way more realistic. Regardless, I 200% blame OP for the dip. This thread derailed ARK. Woods should consider legal action.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by JonnyDVM »

Nice little ARK pop so far today on an otherwise blah market day. That’s right bogleheads- keep spitting on the ARK funds. Maybe we can do for ARK what we did for Bitcoin. A disdain powered explosion. Muhhahahaha.
I’d trade it all for a little more | -C Montgomery Burns
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

JonnyDVM wrote: Wed Mar 31, 2021 9:23 am Nice little ARK pop so far today on an otherwise blah market day. That’s right bogleheads- keep spitting on the ARK funds. Maybe we can do for ARK what we did for Bitcoin. A disdain powered explosion. Muhhahahaha.
It's still 9-10% behind a dumb-as-a-rock Nasdaq index fund YTD.

I'm not seeing the "destroy".
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by YeahBuddy »

hnd wrote: Tue Mar 30, 2021 1:51 pm i mean i get it but its kind of a little silly to point out a 3 month dip in something and be like "SEE!!! GARBAGE!!"

Never said it's garbage.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by JonnyDVM »

watchnerd wrote: Wed Mar 31, 2021 9:39 am
JonnyDVM wrote: Wed Mar 31, 2021 9:23 am Nice little ARK pop so far today on an otherwise blah market day. That’s right bogleheads- keep spitting on the ARK funds. Maybe we can do for ARK what we did for Bitcoin. A disdain powered explosion. Muhhahahaha.
It's still 9-10% behind a dumb-as-a-rock Nasdaq index fund YTD.

I'm not seeing the "destroy".
Ten more 5% gain days in a row and we’re back on top baby
I’d trade it all for a little more | -C Montgomery Burns
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by queso »

JonnyDVM wrote: Wed Mar 31, 2021 2:24 pm
watchnerd wrote: Wed Mar 31, 2021 9:39 am
JonnyDVM wrote: Wed Mar 31, 2021 9:23 am Nice little ARK pop so far today on an otherwise blah market day. That’s right bogleheads- keep spitting on the ARK funds. Maybe we can do for ARK what we did for Bitcoin. A disdain powered explosion. Muhhahahaha.
It's still 9-10% behind a dumb-as-a-rock Nasdaq index fund YTD.

I'm not seeing the "destroy".
Ten more 5% gain days in a row and we’re back on top baby
Maybe we're finally out of the...woods? :D
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by JonnyDVM »

queso wrote: Wed Mar 31, 2021 2:29 pm
JonnyDVM wrote: Wed Mar 31, 2021 2:24 pm
watchnerd wrote: Wed Mar 31, 2021 9:39 am
JonnyDVM wrote: Wed Mar 31, 2021 9:23 am Nice little ARK pop so far today on an otherwise blah market day. That’s right bogleheads- keep spitting on the ARK funds. Maybe we can do for ARK what we did for Bitcoin. A disdain powered explosion. Muhhahahaha.
It's still 9-10% behind a dumb-as-a-rock Nasdaq index fund YTD.

I'm not seeing the "destroy".
Ten more 5% gain days in a row and we’re back on top baby
Maybe we're finally out of the...woods? :D
Boooooooooo. You take that terrible pun, put it in your pocket, and carry it over to the GME mega thread where people appreciate high level humor.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by MinnGuyInvesting »

Arguments of returns can conveniently be timed to provide the results you want.

"Drop from date XX/XX when XYZ peaked".
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

MinnGuyInvesting wrote: Wed Mar 31, 2021 3:43 pm Arguments of returns can conveniently be timed to provide the results you want.

"Drop from date XX/XX when XYZ peaked".
Did you sell some ARKK to take you from 39% to 35%?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by MinnGuyInvesting »

watchnerd wrote: Wed Mar 31, 2021 4:20 pm
MinnGuyInvesting wrote: Wed Mar 31, 2021 3:43 pm Arguments of returns can conveniently be timed to provide the results you want.

"Drop from date XX/XX when XYZ peaked".
Did you sell some ARKK to take you from 39% to 35%?
Didn't sell.
Portfolio changed that much.

See the thread in my signature for details.

ARK down.
SPY / QQQ Up
Crypto up.
FANG stocks down.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

MinnGuyInvesting wrote: Wed Mar 31, 2021 7:04 pm
watchnerd wrote: Wed Mar 31, 2021 4:20 pm
MinnGuyInvesting wrote: Wed Mar 31, 2021 3:43 pm Arguments of returns can conveniently be timed to provide the results you want.

"Drop from date XX/XX when XYZ peaked".
Did you sell some ARKK to take you from 39% to 35%?
Didn't sell.
Portfolio changed that much.

See the thread in my signature for details.

ARK down.
SPY / QQQ Up
Crypto up.
FANG stocks down.
You're dilligent.

I just list my targets, not the day by day fluctuations.

Actually, I'm not even sure what my allocation is right now.

I'll check on my birthday next month.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

watchnerd wrote: Wed Mar 31, 2021 8:20 pm I just list my targets, not the day by day fluctuations.

Actually, I'm not even sure what my allocation is right now.

I'll check on my birthday next month.
You're 99% Boglehead... Not sure why we argue so much. :beer
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by watchnerd »

HomerJ wrote: Wed Mar 31, 2021 9:32 pm
watchnerd wrote: Wed Mar 31, 2021 8:20 pm I just list my targets, not the day by day fluctuations.

Actually, I'm not even sure what my allocation is right now.

I'll check on my birthday next month.
You're 99% Boglehead... Not sure why we argue so much. :beer
It's that last 1%. ;)
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by MinnGuyInvesting »

watchnerd wrote: Wed Mar 31, 2021 8:20 pm
MinnGuyInvesting wrote: Wed Mar 31, 2021 7:04 pm
watchnerd wrote: Wed Mar 31, 2021 4:20 pm
MinnGuyInvesting wrote: Wed Mar 31, 2021 3:43 pm Arguments of returns can conveniently be timed to provide the results you want.

"Drop from date XX/XX when XYZ peaked".
Did you sell some ARKK to take you from 39% to 35%?
Didn't sell.
Portfolio changed that much.

See the thread in my signature for details.

ARK down.
SPY / QQQ Up
Crypto up.
FANG stocks down.
You're dilligent.

I just list my targets, not the day by day fluctuations.

Actually, I'm not even sure what my allocation is right now.

I'll check on my birthday next month.
I update my financial tracking at the end of the month, so I did it today.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Papajoe56 »

I own a little ARKK and bought in around $84 around 9 months ago.

I also own a little ARKW.

If ARKK performs half a well as it has over the last 5 years, I will be happy.

Someone at Morningstar is sounding off on ARKK's management/style.

In the article linked below, the author cites Wood's previous dismal performance at AllianceBerstein.

The company's failure to develop and keep good talent, is also mentioned.

IMHO Her past performance is no indication of future results.

She's just doing things differently, and some find that upsetting.

https://www.morningstar.com/articles/10 ... ajor-twist
Last edited by Papajoe56 on Fri Apr 02, 2021 10:40 am, 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 watchnerd »

Papajoe56 wrote: Fri Apr 02, 2021 10:05 am I own a little ARKK and bought in around $91 around 6 months ago.

I also own a little ARKW.

If ARKK performs half a well as it has over the last 5 years, I will be happy.

Someone at Morningstar is sounding off on ARKK's management/style.

In the article linked below, the author cites Wood's previous dismal performance at AllianceBerstein.

The company's failure to develop and keep good talent, is also mentioned.

IMHO Her past performance is no indication of future results.

She's just doing things differently, and some find that upsetting.

https://www.morningstar.com/articles/10 ... ajor-twist
Lax risk management is "just doing things differently"?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by xraygoggles »

Shoddy risk management, thinking you can consistently outperform the market year after year, utilizing leverage (in Ark's case, massive inflows of capital), overinflated ego..

Sounds like Long Term Capital v2.0
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by SlowMovingInvestor »

Papajoe56 wrote: Fri Apr 02, 2021 10:05 am I own a little ARKK and bought in around $91 around 6 months ago.

I also own a little ARKW.

If ARKK performs half a well as it has over the last 5 years, I will be happy.

Someone at Morningstar is sounding off on ARKK's management/style.

In the article linked below, the author cites Wood's previous dismal performance at AllianceBerstein.

The company's failure to develop and keep good talent, is also mentioned.

IMHO Her past performance is no indication of future results.


She's just doing things differently, and some find that upsetting.

https://www.morningstar.com/articles/10 ... ajor-twist
Don't you find those 2 statements a little contradictory ?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by SlowMovingInvestor »

https://www.bloomberg.com/news/features ... nd=premium


Interesting link between Bill Hwang of Archegos and Cathie Wood. But to be clear, the bad bets that bought Hwang down weren't ARKK style risky tech stocks, but more mainstream stocks like Viacom/CBS

In February 2016, Hwang’s name appeared on an invitation emailed to members of the Financial Services Ministry, a group affiliated with New York’s Redeemer Presbyterian Church that connects Christians in finance. It advertised a weekend retreat at the Princeton Theological Seminary... The highlight was a dinner on a Saturday with three of the ministry’s advisers: Cathie Wood, whose ARK Investments was then a startup money manager; Paul Gojkovich, a former director at Merrill Lynch; and Hwang.

For a while, Wood and Hwang shared a similar trajectory. As Archegos piled up winning trades outside the public eye, she became an investing sensation. Wood’s flagship exchange-traded fund, a technology-heavy portfolio open to any retail investor, wowed the market with a 148% return in 2020. Hwang is also one of Wood’s investors, and, according to one of his former employees, Archegos and ARK collaborated on industry research
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by gubernaculum »

For the next 10 years: VTSAX are my bonds, VITAX are my stocks. Its doing great.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by firebirdparts »

xraygoggles wrote: Fri Apr 02, 2021 10:11 am Shoddy risk management, thinking you can consistently outperform the market year after year, utilizing leverage (in Ark's case, massive inflows of capital), overinflated ego..

Sounds like Long Term Capital v2.0
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This time is the same
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Escapevelocity »

SlowMovingInvestor wrote: Thu Apr 08, 2021 8:53 pm https://www.bloomberg.com/news/features ... nd=premium


Interesting link between Bill Hwang of Archegos and Cathie Wood. But to be clear, the bad bets that bought Hwang down weren't ARKK style risky tech stocks, but more mainstream stocks like Viacom/CBS

In February 2016, Hwang’s name appeared on an invitation emailed to members of the Financial Services Ministry, a group affiliated with New York’s Redeemer Presbyterian Church that connects Christians in finance. It advertised a weekend retreat at the Princeton Theological Seminary... The highlight was a dinner on a Saturday with three of the ministry’s advisers: Cathie Wood, whose ARK Investments was then a startup money manager; Paul Gojkovich, a former director at Merrill Lynch; and Hwang.

For a while, Wood and Hwang shared a similar trajectory. As Archegos piled up winning trades outside the public eye, she became an investing sensation. Wood’s flagship exchange-traded fund, a technology-heavy portfolio open to any retail investor, wowed the market with a 148% return in 2020. Hwang is also one of Wood’s investors, and, according to one of his former employees, Archegos and ARK collaborated on industry research
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by xraygoggles »

History doesn't repeat, but it does rhyme.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

According to Yahoo! Finance, 10.84% of ARKK holdings are in TSLA.

The investment company act of 1940 says a fund should have no more than 5% of its holdings in a single stock. How is ARKK able to have 10.84% of its holdings in TSLA? What am I missing?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by thenextguy »

chris319 wrote: Thu May 06, 2021 10:45 pm According to Yahoo! Finance, 10.84% of ARKK holdings are in TSLA.

The investment company act of 1940 says a fund should have no more than 5% of its holdings in a single stock. How is ARKK able to have 10.84% of its holdings in TSLA? What am I missing?
I’m not sure, but that doesn’t sound right. The S&P 500 has more than 5% holdings of AAPL and MSFT. Lots of funds have holdings greater than 5%.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

The S&P 500 has more than 5% holdings of AAPL and MSFT.
The S&P 500 is an index, not a mutual fund.
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 Hyperchicken »

thenextguy wrote: Thu May 06, 2021 11:13 pm
chris319 wrote: Thu May 06, 2021 10:45 pm According to Yahoo! Finance, 10.84% of ARKK holdings are in TSLA.

The investment company act of 1940 says a fund should have no more than 5% of its holdings in a single stock. How is ARKK able to have 10.84% of its holdings in TSLA? What am I missing?
I’m not sure, but that doesn’t sound right. The S&P 500 has more than 5% holdings of AAPL and MSFT. Lots of funds have holdings greater than 5%.
I second that, just a quick look up of Vanguard Mega Cap ETF (MGC): https://investor.vanguard.com/etf/profi ... o-holdings

The two top holdings, Apple Inc.(AAPL) and Microsoft Corp.(MSFT), are both at 6+%.

chris319 wrote: Thu May 06, 2021 11:18 pm
The S&P 500 has more than 5% holdings of AAPL and MSFT.
The S&P 500 is an index, not a mutual fund.
Very well then. Vanguard S&P 500 ETF (VOO): https://investor.vanguard.com/etf/profi ... o-holdings

Apple Inc.(AAPL) - 5.70%
Microsoft Corp.(MSFT) - 5.26%
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

I think I know.

Under the act of 1940, a fund declares itself as diversified or nondiversified. ARKK is nondiversified, so that explains how it can have so much TSLA.
Last edited by chris319 on Thu May 06, 2021 11:34 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 Thesaints »

Cathie Wood reminds me of Elizabeth Holmes, in some respects...
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by dogagility »

Thesaints wrote: Thu May 06, 2021 11:29 pm Cathie Wood reminds me of Elizabeth Holmes, in some respects...
The bold claims... followed by...
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

chris319 wrote: Thu May 06, 2021 10:45 pm According to Yahoo! Finance, 10.84% of ARKK holdings are in TSLA.

The investment company act of 1940 says a fund should have no more than 5% of its holdings in a single stock. How is ARKK able to have 10.84% of its holdings in TSLA? What am I missing?
Chris319 is right. The act says a "diversified" fund cannot have more than 5% of its holdings in a single stock. But funds don't all need to be "diversified" funds. A fund can choose not be restricted to a 5% limit, but then it has to say in its literature, "the fund is not diversified."

There are quite a few "non-diversified" funds, and sometimes the statement is somewhat hidden.

There is a "75-5-10 rule" which applies to "diversified" funds:
  • 75% or more of its assets are invested in securities
  • No more than 5% of its assets are invested in any one security
  • Contains no more than 10% of the outstanding shares for any one security
And the '75%" leaves a 25% loophole. The loophole sounds as if it is for things that are not securities, but apparently it can be used to put 25% of the assets into a single security and still be considered as a "diversified" fund.

In the prospectus for ARKK,

Image

Some non-diversified funds' web pages and literature are reasonable straightforward and forthright about it. Quite a few actually seem to me to be trying to hide it. There was one specialized ETF, I don't remember which, which was non-diversified... but the factsheet seemed to be trying to use the word "diversification" as much as it could and in big letters all through the main body (because they said it would diversify your portfolio) while burying the word "non-diversified" in a long fine-print footnote saying merely that the fund present a long list of risks including "non-diversification risk."

But, yeah, I think investors need to understand and appreciate what the Investment Act of 1940 does.
Last edited by nisiprius on Fri May 07, 2021 1:48 pm, edited 2 times in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by abuss368 »

A lot of active funds have a day in the sun. The challenge for individual investors is identifying what active fund in advance will outperform.

That’s impossible!

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

Post by SlowMovingInvestor »

Thesaints wrote: Thu May 06, 2021 11:29 pm Cathie Wood reminds me of Elizabeth Holmes, in some respects...
This is unfair. Holmes seems to have indulged in outright fraud, even if she is acquitted.

I don't think Ms. Wood is some sort of investment genius, but she seems very sincere. And even if she were not, it's no different from the puffery that active fund managers indulge in routinely. Not comparable to Holmes.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by David Jay »

SlowMovingInvestor wrote: Fri May 07, 2021 7:22 am Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
What, no GME? That thread is over 4500 posts long...
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by SlowMovingInvestor »

David Jay wrote: Fri May 07, 2021 8:14 am
SlowMovingInvestor wrote: Fri May 07, 2021 7:22 am Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
What, no GME? That thread is over 4500 posts long...
Too conservative :happy
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by David Jay »

SlowMovingInvestor wrote: Fri May 07, 2021 8:29 am
David Jay wrote: Fri May 07, 2021 8:14 am
SlowMovingInvestor wrote: Fri May 07, 2021 7:22 am Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
What, no GME? That thread is over 4500 posts long...
Too conservative :happy
Yup, that makes perfect sense...
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Thesaints »

SlowMovingInvestor wrote: Fri May 07, 2021 7:22 am
Thesaints wrote: Thu May 06, 2021 11:29 pm Cathie Wood reminds me of Elizabeth Holmes, in some respects...
This is unfair. Holmes seems to have indulged in outright fraud, even if she is acquitted.

I don't think Ms. Wood is some sort of investment genius, but she seems very sincere. And even if she were not, it's no different from the puffery that active fund managers indulge in routinely. Not comparable to Holmes.
The similarity is not in the fraud elements. It is in the apparent lack of reasons why she should succeed so spectacularly and dubious qualifications. All we read is that she is a devout Christian and a mom and Laffer was her mentor at some point. Holmes was scared of needles, conveyed a Steve Jobs look & feel, and the likes of Kissinger and George Shultz supported her.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

I think it's wrong to call Cathie a fraud. She was one of the only ones to correctly call the initial Tesla surge last year and those who invest with her rode the wave. This year has not been her best, but it hasn't been a great year for a lot of tech as people pile into the re-opening stocks. I have little interest in selling the 5% of my portfolio I hold in ARKK. If the fund goes belly up, which I don't think it will, I can live with that. I don't expect 100% returns each year, but I think in the long run, ARKK can outperform the market.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by euphonious »

Thesaints wrote: Fri May 07, 2021 11:26 am
SlowMovingInvestor wrote: Fri May 07, 2021 7:22 am
Thesaints wrote: Thu May 06, 2021 11:29 pm Cathie Wood reminds me of Elizabeth Holmes, in some respects...
This is unfair. Holmes seems to have indulged in outright fraud, even if she is acquitted.

I don't think Ms. Wood is some sort of investment genius, but she seems very sincere. And even if she were not, it's no different from the puffery that active fund managers indulge in routinely. Not comparable to Holmes.
The similarity is not in the fraud elements. It is in the apparent lack of reasons why she should succeed so spectacularly and dubious qualifications. All we read is that she is a devout Christian and a mom and Laffer was her mentor at some point. Holmes was scared of needles, conveyed a Steve Jobs look & feel, and the likes of Kissinger and George Shultz supported her.
Does anyone know how much of an active role Woods actually plays in the investment decisions at ARK? Does she make investment choices, or simply sign off on the ones her analysts make? Or maybe she just lets them all do their own thing?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by thenextguy »

euphonious wrote: Fri May 07, 2021 12:26 pm
Thesaints wrote: Fri May 07, 2021 11:26 am
SlowMovingInvestor wrote: Fri May 07, 2021 7:22 am
Thesaints wrote: Thu May 06, 2021 11:29 pm Cathie Wood reminds me of Elizabeth Holmes, in some respects...
This is unfair. Holmes seems to have indulged in outright fraud, even if she is acquitted.

I don't think Ms. Wood is some sort of investment genius, but she seems very sincere. And even if she were not, it's no different from the puffery that active fund managers indulge in routinely. Not comparable to Holmes.
The similarity is not in the fraud elements. It is in the apparent lack of reasons why she should succeed so spectacularly and dubious qualifications. All we read is that she is a devout Christian and a mom and Laffer was her mentor at some point. Holmes was scared of needles, conveyed a Steve Jobs look & feel, and the likes of Kissinger and George Shultz supported her.
Does anyone know how much of an active role Woods actually plays in the investment decisions at ARK? Does she make investment choices, or simply sign off on the ones her analysts make? Or maybe she just lets them all do their own thing?
Well, she's the Chief Investment Officer of Ark Invest, so I imagine she gets the final say. If you watch her in interviews you get the sense she's pretty hands on.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chris319 »

The act says a "diversified" fund cannot have more than 5% of its holdings in a single stock. It can have more than that, but then it has to say in its literature, "the fund is not diversified."
I don't think that's the way it works. A fund has to declare itself as "diversified" or not at startup. A change from one to the other has to be voted on.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

I can't find the link right now, but there was a profile that talked about it.
Here's a different one... According to that article, as of 9/2020 there were only 27 people on the team.

She chooses the analysts that work for her. And "almost none of its analysts has a finance background. Instead, their previous careers include cancer researcher, artificial intelligence expert, gaming engineer -- even sailboat captain." And she tells them what kind of analysis she wants them to do. According to the article I can't find, her consistent direction is not to look for profit, but to look for the companies that are truly engaged in "disruptive innovation."

So my impression is that she is closely and directly involved in investment decisions. In particular, she is responsible for the decision to put "disruptive innovation" above all else, and to hire people who can help her find companies that engage in disruptive innovation as she understands it.

So my impression is that she is personally involved in investment decisions, and deserves personal credit for the performance of her funds in much the same way as a movie director may deserve personal credit for the performance of the actors.
Last edited by nisiprius on Fri May 07, 2021 1:57 pm, 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 nisiprius »

chris319 wrote: Fri May 07, 2021 1:37 pm
The act says a "diversified" fund cannot have more than 5% of its holdings in a single stock. It can have more than that, but then it has to say in its literature, "the fund is not diversified."
I don't think that's the way it works. A fund has to declare itself as "diversified" or not at startup. A change from one to the other has to be voted on.
I didn't express myself clearly in my posting and I'll go back and edit it.
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