Despite a 30% increase in Cathie Wood's ARKK fund following President Trump's re-election, outflows continue, and the fund is projected to reach $3 billion by 2024.

Despite Donald Trump's reelection providing a much-needed boost to Cathie Wood's struggling funds, investor inflows have not increased.

Since Election Day on Nov. 5, Wood's flagship has experienced a more than 30% increase, bringing its year-to-date return to nearly 18%. The electric vehicle maker's stock has skyrocketed about 70% since Trump claimed victory, with much of the gain coming from its biggest holding, which has a 16.3% weighting.

In November, the exchange-traded fund ARKK suffered $49 million in outflows, while in the first week of December, it lost another $24 million. These losses added to ARKK's total outflows of over $3 billion in 2024, making it a record year for the ETF industry, which experienced a massive influx of $1 trillion in new money.

TMX VettaFi's head of research, Todd Rosenbluth, stated that investors are still redeeming shares and ARKK, once the leading actively managed ETF, has lost its appeal.

Despite gaining notoriety during the Covid-19 pandemic for her predictions on Tesla and other Covid-related stocks like Zoom Video, the investor's success was short-lived as ARKK lost approximately 60% of its value from its 2021 high.

She believes that possible deregulation under Trump could lead to innovative developments in wood, which could boost the U.S. economy more powerfully than during the Reagan era.

Trump bump

Elon Musk, CEO of Tesla, has become one of the biggest beneficiaries of Trump in ARKK's portfolio due to his pro-Trump campaign efforts, which included pouring $277 million into the campaign and being assigned a starring role by Trump as head of the Department of Government Efficiency.

On Wednesday, Wood sold 51,335 shares of Tesla in ARKK, worth approximately $21.8 million, following a large postelection rally.

Another top performer in ARKK, the second-largest holding in the fund, has been the crypto exchange, which has seen shares rally more than 80% this year as bitcoin exceeded the key $100,000 threshold.

The hope among investors that Trump will bring about a golden age of crypto has increased, with the expectation of more favorable regulation and a potential national strategic bitcoin reserve or stockpile. This theme has also contributed to the success of ARKK, the sixth-largest holding in the fund, which has experienced a remarkable increase of over 213% in 2024.

Despite the Nasdaq Composite hitting multiple record highs, some of ARKK's holdings have not fully recovered from their pandemic lows, with down 9% and losing 16% this year.