With star investor Cathie Wood’s flagship Ark Innovation ETF (ARKK) down 45% year to date through Monday and the technology stocks she invests in looking shaky, you might think that investors would abandon her fund.
But that’s not happening.
Ark Innovation saw an inflow of $341 million Tuesday, the largest daily haul since last May, according to Bloomberg. The fund is on pace for a sixth consecutive week of inflows.
Those who bought Tuesday had good timing, at least for now. From Monday’s close through Thursday’s close, Ark Innovation soared 19%.
A three-day move doesn’t say anything about the long term, but for the present, at least, Tuesday’s buyers should be happy. Through Thursday’s close, Ark Innovation has slid 34% year to date.
Throughout the stock market’s slide this year, Wood has said that her favorites are merely going through a correction.
“We have a five-year horizon. I’ve never seen innovation on sale like it is today,” she said in January. Wood has noted that private-market valuations of tech companies have exceeded stock-market valuations.
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The biggest holding in the Ark Innovation fund is electric vehicle maker Tesla (TSLA), followed by online healthcare platform Teladoc Health (TDOC), video streaming platform Roku (ROKU) and video meeting service Zoom Video Communications (ZM).
In addition to this year’s drop, Ark Innovation lost 23% last year, but it has an annualized return of 23% for the past five years, topping the 15% annualized return for the S&P 500.
The Good and the Bad
A recent Financial Times profile of Wood offered both positive and negative assessments of her.
“Regardless of performance trends, it’s clear that Cathie is disrupting the asset management industry in order to capture the imagination of a new generation of investors,” Katie Koch, a partner at Goldman Sachs Asset Management, told the FT.
“She has demonstrated great respect for the retail investor by democratizing access to information.”
But Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management and Wood’s boss at money manager AllianceBernstein, was less bullish.
“Cathie’s a boom or bust investor because she doesn’t disinvest or risk manage," she said. "This is the challenge that she has had for her entire career.”
