Shares in Cathie Wood's flagship fund slid to a five-month low as Tesla Inc., its biggest holding, dropped after a round of job cuts stoked investors' worries about the carmaker's growth prospects.
The decline extends a disappointing run for the $6.7 billion Ark Innovation ETF (ticker ARKK), which has been hit by losses this year as a slew of unprofitable tech firms fall out of favor and investors dial back expectations for interest-rate cuts from the Federal Reserve.
ARKK edged lower by as much as 2.8% Tuesday even as the broader equity market stabilized from a steep two-day selloff.
That's left the actively-managed ETF down about over 16% this year despite a more than 5% gain in the Nasdaq 100 index and a 6% advance in the S&P 500.
That fund's performance has been dragged down heavily by Tesla, which accounts for nearly 10% of the fund's holdings and recently reclaimed its status as the fund's single biggest bet, overtaking Coinbase Global Inc.
The carmaker dropped as much as 4.8% Tuesday, leaving it down 37% this year and driving its stock market value to less than half its 2021 peak.
Meanwhile, shares of Coinbase declined by as much as 8% Tuesday after falling 9% in the previous session, though they're still up some 20% year-to-date. Other top holdings — Roku Inc. and UiPath Inc — also traded lower Tuesday.
The recent spell has driven investors to yank out cash. The fund is on track for its fourth straight monthly outflow, with $1.4 billion withdrawn this year.
During its pandemic heyday, the fund attracted as much as $3 billion in a single month alone.
