Asymmetric Advantage: Why ARKI Led In Both Rallies And Pullbacks

Following the recent one-year anniversary of ARK Europe’s suite of actively managed ETFs (with flagship fund ARKK having surpassed the $100 million AUM threshold)¹, one standout story emerges: the ARK Artificial Intelligence & Robotics UCITS ETF (ARKI), which has demonstrated parallel momentum by surpassing USD $70 million in assets and delivering a return of over 60% since inception.² This performance reflects ARKI’s ability to capture upside effectively while exhibiting uncommon resilience during downturns, driven by its distinctive portfolio positioning:

• Driver 1: Allocates actively across the AI value chain due to its benchmark-agnostic research process
• Driver 2: Leans into digital transformation during a period where tariff policy threatens physical goods
• Driver 3: Focuses on the robotics revolution that may experience reshoring tailwinds
• Driver 4: Provides exposure to defence innovators that have been sheltered from spending cuts

Crossing One Year In [Risk-Adjusted] Style

The ARK Artificial Intelligence & Robotics UCITS ETF has officially crossed its one-year milestone as of early April, a key moment for any actively managed ETF operating within the fast-evolving frontier of innovation. Since its launch, ARKI has attracted over $70 million in assets under management³ — a clear testament to investor confidence in both the long-term potential of AI and robotics, and ARK’s differentiated approach to capturing it a new strategy tailor-made for European clients.

But while asset growth is noteworthy, it’s ARKI’s performance profile that sets it apart from the pack. Over the past year, ARKI has not only captured the highest upside in rising markets among its peer group, but it has also delivered second-best downside protection in declining markets — a rare and powerful combination in a sector known for volatility.

• This asymmetric risk-reward profile, strong participation in rallies with reduced participation in corrections, is a testament to ARK’s active management approach and differentiated portfolio construction that is centred on top-down, technology research and bottom-up, benchmark-agnostic stock selection.

While a one-year track record offers only a limited window from which to draw long-term conclusions, the following sections highlight several clear performance drivers — supported by data, attribution, and thematic positioning — that helped ARKI navigate both tailwinds and turbulence.

Performance Analysis

The charts below compare ARKI’s performance against benchmarks and high-profile stocks across two periods – since inception through latest for the longest time window and year-to-date to zoom in on the more recent period of downside volatility. The visuals in the line charts largely speak for themselves, which is why this section focuses more on directional trends than dense data points. Absolute returns are noted within the graphics, while more detailed statistics and quantitative analysis follow in the subsequent sections.

Cumulative Performance vs. Index Heavyweights – Since Inception⁴

Cumulative Performance vs. Index Heavyweights – YTD 2025⁵

As illustrated in the charts, ARK’s positioning beyond the more conventional megacap names has contributed to relative outperformance and reinforces ARKI’s role as a differentiated diversifier within the growth allocation of client portfolios. These results reinforce ARKI’s performance edge: standout upside capture during growth-led rallies, and disciplined downside containment, providing investors with a smoother ride through volatility.

In the following sections, we break down this performance with data and attribution, and explore the structural and thematic positioning that helped ARKI thrive in both tailwinds and turbulence.

Stock Attribution: Balanced Exposures For Different Environments

To isolate performance with a bit more precision, we can analyse stock contribution⁶ during two distinct timeframes that help further identify and shape the four key themes that drove performance. For analytical clarity, we loosely define the ‘upside’ window as the period from fund inception on April 12, 2024, through the most recent peak on February 18, 2025, and the ‘downside’ window as spanning from February 21, 2025, to the most recent trough of April 9, 2025. While this segmentation is a simplified framework, it provides a practical lens through which to assess the fund’s positioning and resilience across market cycles.

Upside Period

Downside Period Relative To Nasdaq 100

*Drivers of performance are discussed in the following sections. Sources: Bloomberg, Morningstar, ARK Investment Management LLC, 2025. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.

This attribution reinforces the strength of our diversified approach, with distinct performance drivers contributing meaningfully across both rising and falling markets—ultimately positioning us ahead of peers. In the sections that follow, we explore the four strategic themes that have powered this differentiated performance.

• Importantly, this outcome reflects our active management philosophy—allocating to off-benchmark names; trimming into strength during market rallies; and leaning into opportunity during periods of volatility—an approach we expand on in the following analysis.

Driver 1: Ai Value Chain Positioning

A closer look at ARKI’s portfolio over the past year reveals several key drivers of performance. First among them was its allocation across the full AI value chain — spanning enabling infrastructure, foundational models, deployment platforms, and intelligent edge applications. We believe that understanding where an AI fund invests across the AI value chain (or “tech stack”) is crucial for assessing its growth potential and risk profile. Many AI-focused funds allocate heavily toward the compute and IaaS layers, resulting in excessive exposure to mega-cap tech. While these companies may provide consistent, steady growth, they often lack the asymmetric upside that we—and many others— see today in AI software-oriented companies within the AI stack. As companies increasingly seek to leverage their underutilised data and enhance operational efficiency through AI, software applications will be essential enablers of adoption.

• Fund managers who are diversified across the AI stack, with a greater emphasis on Infrastructure- and Platform-as-a-Service, have been best positioned to capitalise on the advancement of the AI opportunity.

A standout example from 2024 was the fund’s overweight in Palantir Technologies (PLTR), a company ARK identified early as a differentiated operator at the intersection of AI deployment and mission-critical analytics that was a top holding in ARKI. Palantir’s (PLTR) strong performance in calendar year of 2024 of 346% (compared to Nvidia’s (NVDA) 171% return) came amid increased enterprise and government adoption of its AI-powered decision platforms, which contributed meaningfully to ARKI’s relative returns during key rally periods. And, as our clients know, PLTR was not added to most common benchmarks until the second half of 2024.⁷

Importantly, ARK’s investment team capitalised on PLTR’s outperformance in 2024 by trimming the position as its valuation became more elevated and reinvesting across the portfolio into names spanning Tempus AI to CoreWeave. From early September 2024 through early May 2025, the Palantir position was trimmed by 5.4%,⁸ which speaks to ARK’s active overlay and bottom-up stock selection investment process.

By allocating not just to model builders or GPU infrastructure, but also to companies enabling real-world AI applications, ARKI captured value at multiple layers of the ecosystem. You can read more about ARK’s positioning across the AI value chain in our Know Your AI & Robotics Exposure insight piece.  

Driver 2: Digital Tilt In A Tariff-Fying Macro

Another defining feature of ARKI’s portfolio has been its digital-over-physical tilt. Compared to peers with heavier exposure to hardware and manufacturing – as outlined above in our AI value chain thesis, ARKI’s bias toward software-centric and cloud-native AI companies positioned it relatively well during macro shocks. This has been particularly pronounced during the current period of tariff and supply chain uncertainty. The primary driver behind the fund’s differentiation is that peers tend to be heavily influenced by benchmark weights, thus leaning more heavily into hardware-centric Mag 6 names – from Apple to Nvidia – that have shown signs of weakness in this period of turbulence.

• As global trade tensions rose in the first half of 2025, companies with exposure to semiconductors or hardware inputs experienced market pressure. ARKI’s lighter weighting to those segments helped it preserve capital. We highlighted this differentiation last year, which is equally insightful now.⁹

This digital exposure also provided agility — a trait that becomes critical in fast-moving innovation cycles and cross-border economic friction.

Driver 3: Reshoring Through Robotics: A Coming Tailwind?

ARKI’s exposure to industrial automation and robotics also positions it to benefit from a potentially secular reshoring of U.S. manufacturing. Recent trends — including onshoring incentives from the CHIPS Act, labour shortages, and corporate de-risking of overseas supply chains — are creating tailwinds for robotics in logistics, warehousing, and precision assembly.

With potential cost deflation in automation tools and rising urgency around domestic capacity, this theme could enter a new growth phase over the next 1–2 years. While it is our expectation that “reciprocal tariffs” are being used as a negotiation tactic as opposed to a more permanent, regressive tax, we find comfort in the portfolio’s allocation to robotics during this period of uncertainty.

For example, ARKI maintains a top-10 position in Teradyne Inc (TER), which offers industrial automation through Universal Robots, MiR, and Energid. We do not believe the market has factored in the pace at which industrial automation is moving (including autonomous delivery) and the productivity gains these technologies can deliver.

• Technology-enabled delivery is likely to reshape consumer buying habits, as the cost of transporting goods falls. Our research suggests that robot/drone delivery fees and autonomous trucking revenues could reach ~$440 billion and ~$420 billion, respectively, in 2030.¹⁰

Driver 4: Defence Becomes Defensive

ARKI’s exposure to AI-enabled defence platforms adds a distinct layer of thematic relevance — and downside resilience. While some innovation funds avoid defence entirely, ARK’s view is that defence is increasingly a focus for frontier AI and robotics applications. And while defence companies have shown defensive performance year-to-date, it is our view that the defence landscape will continue to be redefined – not by sheer firepower but by innovation velocity. The current state of warfare has proven that high-cost aircraft are unsustainable against low-cost internationally made drones. Meanwhile, AI is improving decision-making and efficiency, reducing the need for human troops. ¹¹

Legacy contractors, once insulated by decades of procurement cycles and political inertia, now face existential risk. Technological superiority is no longer guaranteed by size or history but by adaptability, data, and breakthrough engineering. The battle for supremacy is shifting to space, cyberspace and autonomous platforms, domains where nimble innovators outpace incumbents.

Key holdings spanning Palantir Technologies (PLTR), Kratos Defense & Security Solutions (KTOS), AeroVironment (AVAV), CrowdStrike (CRWD) straddle both the public and private AI deployment frontier, offering use cases in intelligence, autonomous systems, and cybersecurity.

• In a year when U.S. discretionary spending faced pressure, defence budgets remained largely insulated — signaling bipartisan political support for continued investment.

This positioning not only contributes to thematic breadth but also enhances portfolio robustness during market or geopolitical stress.

Conclusion: An ETF That Is Positioned With Purpose

In its first full year, ARKI has demonstrated that a high-conviction thematic ETF can offer more than just exposure to exciting headlines — it can offer durable, risk-adjusted performance.

By balancing exposure across the AI value chain, leaning into digital resilience, tapping into long-term robotics trends, and recognising the security dimensions of technology, ARKI has delivered asymmetric, risk-adjusted performance that stands out even in a crowded field.

• For investors seeking AI and robotics exposure with a distinctive lens and a thoughtful risk framework, ARKI presents a differentiated option.

As the global race for AI infrastructure and intelligent automation accelerates, ARKI is positioned not only to participate — but to potentially lead.