The best-performing ETF under "Miss Wood" is not the flagship fund ARKK, but another one!

Zhitong App learned that growth stocks rebounded significantly in 2023, significantly boosting the performance of star investor "Cathy Wood" and her Ark Investment's ETFs. Wood's flagship ARK Innovation ETF (ARKK.US) has generated strong returns this year, with a cumulative increase of 74.03%, recovering a large amount of lost ground after a sharp decline in 2022.

However, ARK Innovation is not Wood's best-performing ETF in 2023. This honor belongs to the ARK Next Generation Internet ETF (ARKW.US), which has almost doubled in value, soaring by 102.68%, benefiting greatly from favorable trends in hot areas such as artificial intelligence and cryptocurrencies.

Portfolio Holdings

In fact, both the ARK Next Generation Internet ETF and the ARK Innovation ETF have basically taken the same measures throughout the year, but the ARK Next Generation Internet ETF has a higher concentration of popular stocks, which has helped expand its returns in 2023.

Specifically, the largest holding, Coinbase (COIN.US), is the main reason for the rise of the ARK Next Generation Internet ETF. Benefiting from the end of the cryptocurrency winter and speculation that the U.S. Securities and Exchange Commission will eventually approve a physically-backed Bitcoin ETF for retail investors, the price of Bitcoin soared to over $40,000 at the end of the year. Since the beginning of 2023, the stock price of cryptocurrency trading platform Coinbase has almost quintupled.

Other top-performing companies in the ARK Next Generation Internet portfolio include Roku (ROKU.US), UiPath (PATH.US), and Tesla (TSLA.US). Roku has made significant progress in finding ways to profit from the increasingly popular connected TV, as advertisers leverage this capability to more effectively target audiences. For UiPath, the growing demand for robotic process automation in the field of artificial intelligence has helped this newly listed company reverse the decline in its stock price in 2023.

Tesla remains a force to be reckoned with in the electric vehicle industry, and many investors believe that Tesla's efforts in AI-driven robotics and autonomous driving will have even greater value in the long run.

Aggressive Investment Strategy

Many investors hold admiration for Wood due to her courage in selecting investment projects for the Ark Investment Fund. For example, when it comes to Bitcoin, Wood stated that based on her analysis of institutional investment trends and the increasing popularity of leading cryptocurrencies, the price of Bitcoin could rise to nearly $1.5 million by 2030. This means that the value of cryptocurrencies will grow by about 35 times, inevitably having a positive impact on Coinbase's business.

However, there is one thing that has largely gone unnoticed by investors, and that is Wood's willingness to sell her profitable stocks without hesitation in order to provide funds for purchasing other stocks. Earlier in December, Wood sold a large amount of Coinbase stock and reduced her holdings in ARK Next Generation Internet by about 17,000 shares, worth approximately $24 million.

This is not a sign that Wood lacks confidence in Coinbase's future. Even with such a large-scale sale, it only represents a small portion of the fund's 12% position. After experiencing such a significant increase, seizing the opportunity to shift towards stocks that may achieve explosive returns in 2024 is a typical characteristic of Wood's long-term success in generating good returns.