ARK Investment Management LLC’s highflying exchange-traded funds are firmly in a bear market following another round of steep declines Friday.
The core five ETFs of star stock picker Cathie Wood’s New York asset-management firm finished the day mixed between small gains and losses. But deep declines of shares of technology and other fast-growing stocks in previous sessions have left a heavy toll. All five of ARK’s funds are down 20% or more from their most recent high, meeting the traditional threshold used for determining when securities and indexes have entered a bear market.
ARK’s ETFs have plunged past the broader stock market. The S&P 500, which ARK uses as a benchmark for its own funds, is off 2.4% from its Feb. 12 high.
ARK’s flagship innovation fund has been hardest hit. The $23 billion fund has fallen 27% from its previous high, with roughly a third of those declines coming this week alone. The drops for ARK’s other funds weren’t far off. That is likely because a number of the stocks in Ms. Wood’s funds are largely exposed to the growth trade, which the market has turned on in the face of a steepening yield curve.
Some of ARK’s funds have heavy positions in companies like electric-car maker Tesla Inc., streaming service Roku Inc. and digital-payments company Square Inc. All three of those stocks are off at least 24% from their most recent highs.