These were Cathie Wood’s Best ETFs of 2024.

Growth stocks rebounded sharply in 2023, which was good news for star investor Cathie Wood and her family of Ark Investment Management exchange-traded funds. Wood’s flagship ARK Innovation ETF (ARKK 1.34%) It has delivered strong returns, up 67% with just one week left in the year, and has regained a significant amount of ground after suffering heavy losses in 2022.

But ARK Innovation wasn’t Wood’s best achievement in 2023. Instead, the honor is ARK Next Generation Internet ETF (ARKW 0.84%), which has nearly doubled in value and has benefited even more from favorable trends in popular sectors such as artificial intelligence and cryptocurrencies. Here’s everything you need to know about this top-performing Ark Invest ETF and why Wood is so optimistic about the exchange-traded fund’s long-term prospects.

lead the higher path

As you can see below, ARK Next Generation Internet and ARK Innovation have had broadly identical movements throughout the year. However, ARK Next Generation Internet’s greater focus on the most moving stocks has helped boost its 2023 returns.

ARKK total return level data from YCharts.

Looking at the top holdings within ARK’s winning ETF for 2023, it’s easy to identify the reasons for the outperformance. best holding Coinbase Global (coin 4.43%) Profit from the end of the cryptocurrency winter. Bitcoin (BTC 0.01%) It soared to over $40,000 by the end of the year. Coinbase is well-positioned to profit if the U.S. Securities and Exchange Commission finally approves a spot Bitcoin ETF for retail investors, and if rising cryptocurrency prices spark new excitement among investors. Base’s cryptocurrency trading platform can generate more revenue and profits. Coinbase stock has risen nearly fivefold in 2023.

Other top performers among ARK Next Generation Internet’s holdings include: year (year -0.76%), Ui Pass (road 0.63%)and tesla (TSLA -0.77%). Roku has made significant progress in finding ways to monetize the growing popularity of connected TVs as advertisers flock to take advantage of the ability to more effectively target their marketing efforts to viewers. For UiPath, growing demand for robotic process automation in the AI ​​world helped the newly public company recover its stock price in 2023, and there’s still plenty of upside for the stock to return to a trading position immediately after its 2021 IPO. And while Tesla remains a notable force in the electric vehicle space, many investors see its efforts in AI-powered robotics and autonomous driving as having much greater long-term value.

Ambitious choices through continuous readjustment

Many investors admire Wood for his bold demands on the investments he chooses for his Ark Invest fund holdings. For Bitcoin, for example, Wood said the price of Bitcoin could rise to nearly $1.5 million by 2030, based on his analysis of institutional investment trends and growing adoption of major cryptocurrencies. This represents an approximately 35x increase in the value of the cryptocurrency and will inevitably have a positive impact on Coinbase’s business.

But one thing that goes mostly unnoticed among investors is that Wood doesn’t hesitate to reduce positions in winning stocks to fund purchases of other stocks. In early December, Wood sold the most shares of Coinbase in months, selling about 17,000 shares of the Next Generation Internet ETF for about $24 million.

Investors shouldn’t take this as a sign of uncertainty about Coinbase’s future. Even such a large sale would only reduce a position that accounts for 12% of the fund. And after such a big run, taking the opportunity to switch to stocks with a greater potential for explosive returns in 2024 would be the epitome of Wood’s long-term performance.

Will there be more profits in 2024?

Despite the gains in 2023, the losses suffered by the Ark Invest ETF in 2022 were large enough that Wood still has some work to do to keep some investors happy. Nonetheless, there is no doubt that key trends such as AI and cryptocurrencies will remain at the forefront of investors’ attention in the coming year. This could bode well for Wood and the Ark Invest ETF in 2024 and beyond.