Reviewing the returns in the active ETF sector in the early weeks of 2026, one company stands out for its negative results, and it is quite a turnaround from last year. Cathie Wood’s Florida-based ARK Investment Management had a storming 2025 (which we covered HERE), with ARK Innovation ETF and ARK Artificial Intelligence & Robotics ETF both returning more than 30% over the year. Thus far in 2026, however, the former is the worst performing European active ETF in the sector (among the largest 350 or so funds) having lost 12.3%. And the latter is not that far behind, having fallen 6.4% (figures to 12 February).
ARK specialises in “technologically enabled advancements that have the potential to change the world” and such disruptive companies can be very in demand as was the case last year. This year has seen something of a reverse, however. The tech sector has been under pressure – the Nasdaq is down year-to-date – and many AI-linked stocks have been hit by concerns over valuations and some reassessment of the wider narrative about AI disruption. This has seen some market rotation into other sectors.
There have also been some stock-specific issues. For example, the sportsbook markets operator DraftKings has been widely held across ARK funds, but was sold following disappointing results and after a 30% fall so far this year.
Our view
David Batchelor, senior analyst at QuotedData, said: “It was only seven weeks ago, two days before Christmas to be precise, that I lauded ARK Investment Management for taking the top two positions in the 2025 active ETF leaderboard. A lot can change in a few weeks however. That said, investors in ARK funds know what they are letting themselves in for – or at least they should – namely high risk, potentially high returns from growthy, often volatile holdings. It’s therefore unlikely that they will be put off by a few weeks of negative performance, but will instead be reminding themselves of the need for a strong stomach on this particular rollercoaster”.
