ARK Invest's Innovation ETF Surges 32% Amid Market-Wide Decline

ARK Innovation ETF (ARKK) delivered a standout 32% return during December 2025, marking its best monthly performance in over two years and positioning it as the top-performing major U.S. equity ETF for the month. The surge came amid a broader market downturn, with the S&P 500 declining by 1.8% and the Nasdaq Composite dropping 2.4% over the same period. ARKK’s strong showing was fueled by gains across its core holdings in artificial intelligence infrastructure, semiconductor design, and gene editing technologies. The fund’s outperformance stemmed from concentrated exposure to companies advancing foundational technologies in machine learning and synthetic biology. Notably, shares of C3.ai (AI) rose 48% month-over-month, while CRISPR Therapeutics (CRSP) climbed 37% on positive clinical trial data for a new gene therapy. These gains contributed significantly to ARKK’s 32% monthly return, which exceeded the 17% rise of the S&P 500 Information Technology Sector and the 22% gain of the ARK Genomic Revolution ETF (ARKG). Investors have increasingly reallocated capital toward high-conviction innovation themes as macroeconomic uncertainty persists. ARKK’s net inflows totaled $1.2 billion in December, reversing a trend of outflows seen earlier in the year. The fund’s assets under management now stand at $12.8 billion, up from $10.3 billion at the start of the month. The strong performance has reignited interest in ARK Invest’s thematic approach, particularly among retail investors and institutional allocators targeting long-term technological disruption. However, analysts caution that the fund’s volatility remains elevated, with a 30-day historical volatility of 46%, compared to the S&P 500’s 18%. The recent rally may also reflect short-term positioning rather than sustained momentum.