What are the top holdings of Cathie Wood's ARK Innovation ETF?

00:00:00 Jared Blikre

Arc Innovation Fund has always been about disruption, so Kathy Wood’s flagship fund was right in the place, the right place at the right time as the pandemic demanded different kinds of thinking. But times do change and so do disruption themes. So let’s track the Arc Innovation portfolio shift over the last five years. I’m Jared Blikre, host of Stocks and Translation. Here behind me is a look at the top five positions in Arc by market value at two different times, before and during the pandemic boom. Now back in December of 2019, Tesla led with a modest $200 million position. Fast forward just over a year, Arc’s Tesla holdings balloon to $2.4 billion as the fund’s total assets exploded. The entire fund family was up nearly 400% from its pandemic lows. The ETF’s holdings doubled to about 60 different names, adding big bets on remote favorites like Teledoc, Roku, and Shopify. But when the pandemic euphoria faded, so did the Innovation Fund. It lost 82% of its value from peak by into December of 2022. Now, check out its top 10 holdings here. Zoom led the fund with nearly $600 million and fast forward to today’s portfolio, we can see a significant shift again. Tesla is back on top, $750 million, followed by newcomers like Coinbase, Roblox, and Palantir. Arc didn’t just shrink, it rotated into themes like gaming, crypto again along with some early AI plays. So anything tied to disruption must necessarily reinvent itself. Now, let’s take a look at the biggest holdings from April 2021. That was a peak, and Arc has completely eliminated a lot of these. Teledoc, once a massive $1.4 billion position, has been entirely exited. Also gone are once hot stocks like Zillow, Zoom, Spotify, and Baidu, each formally worth $700 million in arc. Take Zoom for example. It fell 5%, well, from 5% of the portfolio to zero as its stock price collapsed from about 80% over the pandemic bust. Now finally, here are some stocks that Arc has increased its bets on the most measured by the change in portfolio weight since April of 2021. Coinbase, you’ll see there, was added shortly after its IPO. This was an unusual early move for an institutional investor. It’s now about 9% of arc, up about 7 percentage points. Palantir, another name, showed early institutional interest from arc, added about five months after its IPO. It’s now 5% of the fund, up nearly 4 percentage points. Arc also increased its already large positions in both Roku and Tesla, which has been its largest position for years by the way. These names became more prominent even as the fund shrank, showing high conviction. And today, these five stocks represent almost a quarter of the fund. Now arguably, the arc journey has mirrored the Gartner Hype Cycle that Kathy talks about often, from peak excitement through a tough trough, now onto a path of more sustainable growth. And with many of the names on a more solid technical footing, we’ll have to see how far arc can climb again. And tune in to Stocks and Translation for more jargon-busting deep dives. New episodes on Tuesdays and Thursdays on Yahoo Finance’s website or wherever you find your podcast.