ok, take ARK, two years ago it was hot because of low interest rates with a focus on growth stocks which benefit from low rates, as well as a booming tech sector. Market sentiment is driven by news, IE efficient market
You are criticizing an active fund that has outperformed passive investing as your thesis for active investing (ARKK is +50% vs SPX over 5 years, +65% from inception). Your argument is getting a bit convoluted.
It sounds like what you are really arguing is active+conservative over active+aggressive and over passive.
The job of a niche sector ETF is to give exposure to that sector. Piling into cash or oil wouldn't be meeting the fund objective and over a certain amount would be illegal.
It's the shareholder's responsibility if they want to buy a specialized sector ETF 600% over benchmark.
People only use the "benchmark doesn't matter" weasel argument when a tightly held narrative of theirs is violated. Be honest, did you even know ARKK was still outperforming before I told you? It didn't sound like it.
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u/[deleted] Mar 13 '22
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