ARKK’s 1.05 Sharpe Ratio Tops Nasdaq-100 with 14.2% Return
ARKK•ARKK posted a 14.2% three-year annualized return with a 1.05 Sharpe ratio, outperforming the 0.87 ratio of the Nasdaq-100 ETF. Tesla’s 12.3% weighting drove 18% of ARKK’s returns while contributing 40% of its 18.3% annualized volatility.
1. Risk-Adjusted Returns
Over the past three years ARKK achieved a 14.2% annualized return with 18.3% annualized volatility, resulting in a 1.05 Sharpe ratio versus a 0.87 ratio for a comparable Nasdaq-100 ETF.
2. Tesla’s Role
With a 12.3% portfolio weighting, Tesla contributed 18% of ARKK’s total returns while accounting for 40% of its overall volatility, underscoring the stock’s outsized influence on performance metrics.
3. Diversification Effects
Beyond Tesla, ARKK’s top five positions include Roku, Teladoc Health and Coinbase, which together reduced peak drawdowns by 35% during market sell-offs compared to a pure Tesla stake.
4. Fund Flows and Valuation
ARKK attracted $550 million of net inflows in Q2 2026, carries a 0.75% expense ratio and trades at a 31x forward earnings multiple based on its current portfolio.
