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3 Funds That Got Barbecued in 2022

3 Funds That Got Barbecued in 2022

It’s barbecue season, so I thought I’d take a look at some funds that have been barbecued. It’s amazing how quickly fortunes are made and lost in investing. Let’s look at three of the biggest losers, so far, of 2022.

ARK Innovation ETF's ARKK super-aggressive portfolio has been crushed. The fund has lost more than half its value and given back enough gains that it’s only flat for the trailing three years at this point. Once a decade or so, these sort of super-high-valuation really speculative stocks take a severe hit, and that’s what we're seeing right now. Top holdings in the fund like Roku, Zoom, Teledoc, and Coinbase are down more than 70% on the trailing one-year, and even ARKK favorite Tesla has been getting hit more recently since Elon Musk started flirting with Twitter. We rate the fund Negative.

Dennis Lynch’s Morgan Stanley Institutional Growth MSEGX has been cut in half. It, too, loves fast-growing tech names, though it at least has better research to back it up. The Silver-rated fund has been burned by Shopify and Doordash.

Growth-oriented emerging-markets funds are really hurting, too. Artisan Developing World is off more than 40%. Asian internet plays like Sea Limited and Tencent have suffered from the tech selloff and China’s slowdown. We rate the fund Bronze as Lewis Kaufman has impressed over time, though he’s giving back some gains now.

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About the Author

Russel Kinnel

Director
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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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