Cathie Wood, chief executive of Ark Investment Management, sold shares of Exact Sciences (EXAS), one of her biggest holdings, for the third day in a row Wednesday.
Ark funds dumped 131,414 shares of the stock, valued at $9 million. Ark unloaded $9 million of the stock Monday too and another $8.8 million Tuesday.
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Exact Sciences is a medical diagnostics provider famous for its Cologuard at-home colon cancer test. The stock has ascended 35% thus far in 2023, buoyed by strong earnings, and 2% over the last 12 months.
Ark has unloaded more than 4 million shares of Exact Sciences since Jan. 1. But it’s still the sixth biggest holding in Wood’s flagship Ark Innovation ETF (ARKK).
Cathie Wood’s Lagging Returns
Meanwhile, Wood’s performance hasn’t exactly lit the investment world on fire over the past year, as her young technology stocks have slumped. Ark Innovation has descended 37% during that period and 76% from its February 2021 peak.
Nonetheless, the fund has bounced back 21% so far this year, as tech stocks have rebounded in general.
Mama Cathie, as Wood is known to her fans, defends her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of $7.6 billion-asset Ark Innovation was just 0.9% through April 19, compared with 10.99% for the S&P 500.
The fund’s performance also doesn’t come close to Wood’s goal for annualized returns of 15% over five-year periods.
But Ark Innovation enjoyed a net investment inflow of $127 million during the five days through April 18, and an inflow of $638 million over the last year, according to ETF research firm VettaFi.
What Draws Investors to Wood
You might wonder why so many investors have stuck with Wood. The fact that she had one spectacular year certainly helps. Ark Innovation skyrocketed 153% in 2020.
Also, Wood has become something of a rock star in the investment world, appearing frequently in the media. She explains financial concepts in ways that novice investors can understand.
Wood does have her detractors. Morningstar analyst Robby Greengold offered a harsh critique of Ark Innovation in March. “Its dubious ability to successfully navigate the challenging territory it explores earns a rating of negative,” he wrote.
Wood, of course, begs to differ. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said last year in an interview with Magnifi Media by Tifin.
