ARKW Tops 131 US Equity ETFs With 12.7% 3-Year Alpha
Updated
Updated · Trefis · Jul 20
ARKW Tops 131 US Equity ETFs With 12.7% 3-Year Alpha
1 articles · Updated · Trefis · Jul 20
Summary
Only 30 of 131 US-focused equity ETFs generated positive alpha over three years, with ARK Next Generation Internet ETF leading at 12.7% annualized above what its market exposure would imply.
ARKW’s outperformance came with heavy risk: it returned 117% over three years, but its 1.97 beta, 36% annualized volatility and 0.81 Sharpe ratio point to a far rougher ride than the S&P 500.
VanEck Semiconductor ETF ranked second with 11.1% alpha and a 261% three-year return, while posting a stronger 1.27 Sharpe ratio that suggests more consistent risk-adjusted gains.
Recent results show how quickly that edge can reverse: ARKW’s one-year alpha is -35% and its one-year return is -8.1%, even though the fund now trades about 12% below its historical valuation norm.
The screen highlights that beating the market often reflects higher beta rather than manager skill, making alpha, Sharpe ratio and concentration key tests for judging ETF performance.