Reported 4 months ago
ARK Invest, led by Cathie Wood, gained attention by heavily investing in small companies and excluding large ones, except for Tesla. Despite the initial success, their ETFs underperformed the S&P 500 and Nasdaq Composite in the long run. This underperformance was due to niche companies cooling off and missing exposure to megacap leaders in artificial intelligence (AI), like Nvidia and Microsoft. To avoid similar mistakes, investors are advised to strike a balance in portfolio composition, considering exposure to megacap growth stocks. The Vanguard Mega Cap Growth ETF is suggested as an alternative with significant exposure to key industry players like Microsoft, Apple, and Amazon. Utilizing ETFs strategically can provide diversification and long-term growth potential in AI sectors.
Source: YAHOO