Celebrity money manager Cathie Wood, chief executive of Ark Investment Management, continued to buy and sell big technology stocks Nov. 9.
The buying shows she’s acting on her contention that the 2022 declines of young, “disruptive” technology shares represent buying opportunities. Those shares are her stock and trade.
All valuations below are as of Wednesday’s close.
On the buying side, Ark funds purchased 237,675 shares of Coinbase Global (COIN), the biggest U.S. cryptocurrency exchange, worth $10.9 million.
Wood was likely taking advantage of the stock’s 22% drop from Nov. 4-9 amid turmoil in the cryptocurrency market. Ark also bought shares Nov. 8. The stock has plunged 80% year to date.
Tesla, Zoom, Roblox, Nvidia
Ark funds snagged 39,676 shares of electric vehicle titan Tesla (TSLA), worth $7.5 million. Wood has repeatedly expressed admiration for chief executive Elon Musk’s business acumen. The stock has slid 46% so far this year.
Ark funds picked up 148,645 shares of video-conference service Zoom Video Communications (ZM), worth $10.7 million. Zoom has dropped 56% year to date.
Ark funds snapped up 333,420 shares of online video game platform Roblox (RBLX), worth $10.3 million. The stock has lost 68% so far this year.
On the selling side, Ark Innovation ETF (ARKK) dumped 323,457 shares of giant semiconductor maker Nvidia (NVDA), worth $44.6 million. The stock has shed 50% year to date.
Wood’s Underperformance
Ark’s ETFs have tumbled this year as their tech holdings suffered from weak earnings. Wood has defended herself by noting that she has a five-year investment horizon.
The five-year track record of her flagship Ark Innovation ETF could indeed give investors comfort up to May 9. The fund’s five-year return beat that of the S&P 500 until then. But the five-year annualized return of Ark Innovation totaled only 0.29% through Nov. 9, far behind the S&P 500’s 9.65% return.
The fund’s performance also falls well below Wood’s goal for annualized returns of 15% over five-year periods. Ark Innovation has dropped 61% so far this year, and it’s down 77% from its February 2021 peak.
The $6.5 billion fund’s underperformance may finally be starting to push investors away. Ark Innovation suffered a net outflow of $398 million in the three months through Nov. 7, according to VettaFi, an ETF research firm. But it has still registered an inflow of $1.26 billion year to date.
You might wonder why so many investors have stuck with Wood, despite her mediocre returns. The fact that she had one spectacular year certainly helps. Ark Innovation ETF skyrocketed 153% in 2020.
Also, Wood has become something of a rock star in the investment world, appearing frequently in the media. She is intelligent and articulate, explaining financial concepts in ways that novice investors can understand.
