Kathy Wood’s ARKK: The Meteoric Rise, the Tumultuous Fall, and the Real Returns

Remember the buzz around Kathy Wood and her ARK Innovation ETF (ARKK) during the pandemic? It was the talk of every investment circle-stories of eye-popping returns and the promise of a future built on disruptive innovation. But what actually happened to investors who jumped in at the height of the excitement, and how do those returns stack up against the fund’s long-term record? Let’s dig in.

The Story: From Hero to Humbling

Late 2020 was a wild time. Investors were hungry for new ideas, and Kathy Wood’s ARKK was front and center, flush with Tesla, Zoom, and other pandemic-era darlings. She was everywhere-on CNBC, in headlines, and in the hearts of investors who wanted a piece of the future. Her ability to tell a compelling story about innovation made it easy to believe that ARKK was a ticket to easy riches.

But as with every hot streak on Wall Street, the music eventually stopped. ARKK soared in 2020, drawing in enormous amounts of capital, only to see a dramatic reversal as markets rotated away from speculative growth stocks. Many who bought in at the peak found themselves on a rollercoaster they hadn’t bargained for.

The Numbers: Annualized Returns-2021 to Today vs. Inception

Let’s get specific. If you invested in ARKK at the start of 2021 and held through today (May 2025), your experience would be very different from those who got in early.

ARKK Annualized Returns

• 2021–2025: Investors who joined the ARKK party at the start of 2021 have seen annualized returns of about -1.1% to -1.2%-meaning a negative return over more than four years38.

• Since Inception: Those who invested at launch in 2014 still enjoy a solid annualized return of about 10.1% to 10.2%38.

Recent Performance Snapshots

• 2023: +67.6%

• 2024: +8.4%

• 2025 (YTD as of May): +2.8%7

• 2022: -66.9%

• 2021: -23.4%

The wild swings are clear: after a massive 2020, ARKK suffered sharp losses in 2021 and 2022, then rebounded somewhat-but not enough to erase the pain for those who bought late.

What’s the Real Lesson Here?

Kathy Wood’s vision and communication skills are undeniable. She made innovation investing exciting and accessible. But the ARKK story is a classic reminder that:

• Timing matters. Those who chased performance at the top paid a steep price.

• Volatility is real. ARKK’s maximum drawdown since inception is a stomach-churning -77%8.

• Long-term discipline wins. Investors who stuck with ARKK from the very beginning have still outperformed the broad market-but those who jumped in during the hype have underperformed.

So, What Should You Do?

Before you ride the next Wall Street rocket, ask yourself:

• Am I investing with a plan, or just chasing headlines?

• Does this strategy fit my goals and risk tolerance?

• How will I handle the inevitable ups and downs?

Investing isn’t about catching the next superstar-it’s about building a strategy that works for you, in good times and bad.

Ready to rethink your investment approach? Let’s talk about your goals and how to build a portfolio that works for you-no matter who’s making headlines.

References:

• [Yahoo Finance: ARKK Performance]2

• [Schwab: ARKK Performance]3

• [Lazy Portfolio ETF: ARKK Historical Returns]8

• [YCharts: ARKK Performance]5

(Click the links above to see the full data and dig deeper!)