What is it Warren Buffett's famous quote: "It's only when the tide goes out that you see who's been swimming naked."
And it seems the good ship Ark has crashed on the rocks and the tide is now going out.
The question to pose now is: did Cathie Wood ever really have any investment skills, or was her previous outperformance all just a the result of randomness and a good yarn?
If you want to beat the market then it's not that hard - just take on more risk. However that cuts both ways, as when the rubber band snaps the other way the losses can be huge.
Looking at her risk adjusted metrics, the evidence seems to point to the latter. Since 2015 her fund's Sharpe/Sortino ratios have been lower than both the S&P and the Nasdaq. Therefore, one is not wrong to conclude that there is no evidence of her having any real investment skill, and her outperformance has simply been the result of holding much more risk.
Whether you subscribe to Buffett's definition of risk as permanent loss of capital, or the orthodox investment management definition of risk as portfolio volatility (I personally don't think they are mutually exclusive), the Ark funds carry a hell of a lot of risk that its investors are now bearing.