3 Growth Investors That Outperformed Cathie Wood Last Year

It could get a whole lot harder to beat Cathie Wood’s Ark Invest line of funds moving forward as artificial intelligence (AI) and other emerging technologies come into their own. Undoubtedly, it can be rather tricky to bet on disruptive innovators since it’s not just the incumbents these firms seek to disrupt that need to stay on their toes but the disruptive innovator itself. Indeed, the market is full of disruptive innovators who are hungry to take the lion’s share of the economic opportunity to be had. And, at times, it can be truly difficult to tell what separates the winners from the losers and everything in between.

Furthermore, last year’s loser could be the next decade’s big winner, given that much hinges on just one or two major innovations going right. In that light, I do think Cathie Wood’s aggressive growth strategy won’t trail the stock market averages forever, especially given some of her recent tech bets have proven quite applaud-worthy. If she can keep up the smart bets, perhaps Cathie Wood will be the disruptive growth benchmark to stack up against.

In this piece, we’ll have a look at three actively managed ETFs that managed to beat the flagship Ark Innovation ETF (NYSEARCA:ARKK) last year and explore what it’ll take to pull off another beat in 2025.

Morgan Stanley Insight Fund (CPOAX)

The Morgan Stanley Insight Fund (NASDAQ:CPOAX) had an incredible 2024. And the momentum doesn’t appear to be slowing down, with the fund up around 11.5% year to date. Now up 56% (versus just over 20% for ARKK), the high-growth tech fund seems virtually unstoppable as it aims to double down on the high-tech innovators, many of which you wouldn’t find at the top of the S&P 500 or Nasdaq 100.

Much of the recent outperformance is thanks to relatively small tech innovators that had a big year in 2024. Perhaps the standout performer in the fund is MicroStrategy (NASDAQ:MSTR), a Bitcoin beneficiary that’s up 345% in the past year.

With some very interesting but turbulent names at the fund’s core, investors looking to beef up their mid-cap exposure may wish to look at the fund and its holdings. As a mid-cap growth fund, do be ready to ride out the larger waves. As for beating the ARKK again in 2025, I think it’s a possibility.

T.Rowe Price Global Technology Fund (PRGTX)

T. Rowe Price Global Technology Fund (NASDAQ:PRGTX) is a fund that managed to top the ARKK last year, but it was a closer race. Over the past year, the PRGTX is up just 3% more than the ARKK.

Either way, I find the large-cap-centric fund, which is managed by Dominic Rizzo, to be an intriguing offering for investors who want more of a tilt toward larger-cap tech names like Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL), which comprise 15.5% and 11.2% of the fund, respectively, at the time of writing.

With a good amount of semiconductor names, it appears the PRGTX is well-equipped to keep on riding the AI wave higher in 2025. Of course, it will be interesting to see how the fund stacks up against Wood’s funds in this new year as the AI waters shift a bit.

Fidelity Magellan Fund (FMAGX)

Finally, we have the legendary Fidelity Magellan Fund (NASDAQ:FMAGX), which is up 35% in the past year. Underneath the hood of the fund are many mega-cap firms we’re probably well familiar with. Indeed, five of the Magnificent Seven or six of the “Fateful Eight” comprise the top 10 holdings.

Although there’s much overlap with the S&P 500, I do view the fund as intriguing and tough to beat, especially if management can pick and choose its way to market-beating performance this year. Personally, I’d give ARKK the slight edge for 2025, given the Mag Seven names may be running out of gas as smaller firms look to benefit from a broadening out of market strength.

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