Markets can feel a bit frothy from time to time, such as at the present. We are all prone to FOMO (fear of missing out) when we look back at stellar stock and fund performance, such as Tesla and the Ark Innovation ETF over the past couple of years. We take a look at the latter and the fund flows into and out of this high performing, high risk ETF. We estimate the gap between fund and investor returns to be in the region of 40% p.a. The average investor would have done just as well owning a US index tracker fund over the same period. The tortoise wins the (long-term) race!
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