Cathie Wood’s ARK Innovation ETF (NYSE Arca:ARKK) has been hammered hard over the past several months. In just six months, it has lost more than half of its value (the S&P 500, meanwhile, is down by less than 6%). Some of the fund’s more popular stocks have been struggling mightily as well, including Roku (NASDAQ:ROKU), which has fallen an incredible 68% in just half a year. Tesla (NASDAQ:TSLA) is the one exception, having generated modest gains of 8% during that time. But the excitement surrounding that stock has cooled off significantly.
The ARK Innovation fund focuses on “disruptive innovation” and on companies that can change the way people live. Other popular holdings in the ETF include Zoom Video Communications (NASDAQ:ZM) and Block (NYSE:SQ). The fund normally holds between 35 and 55 stocks, and it’s home to some of the top growth stocks in the world. The massive decline in the ETF over the past six months gives investors the opportunity to buy back in to what may be a promising long-term growth opportunity. At less than $56 to finish last week, the ARK Innovation ETF hit a new 52-week low.
Although it’s proving to be a risky buy right now, if you’re a long-term investor who is willing to hang on amid these challenging times, the pay off could be significant. Growth stocks generally outperform the market, and many of these stocks, while they may have been overpriced months ago, still possess some attractive growth potential over the long haul.