Famed money manager Cathie Wood, chief executive of Ark Investment Management, has been buying and selling some of her biggest names in recent weeks. And she was at it again Feb. 13.
Ark exchange-traded funds purchased 118,695 shares of troubled Coinbase Global (COIN), the biggest U.S. cryptocurrency exchange. That chunk was valued at $6.7 million as of the Feb. 13 close.
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Wood likely views Coinbase as a bargain, thanks to the stock’s 70% plunge over the past year amid turmoil in the digital currency market. To be sure, the stock has rebounded 63% year to date.
She has been buying Coinbase for months. It ranks as the eighth biggest holding in Wood’s flagship Ark Innovation ETF (ARKK).
Meanwhile, Ark funds dumped 119,612 shares of Exact Sciences (EXAS) Feb. 13, valued at $7.8 million as of that day’s close. The company is a medical diagnostics provider famous for its at-home colon cancer test.
Wood apparently is trying to take advantage of the stock’s recent rebound. Exact Sciences shares have more than doubled since Oct. 14, buoyed by strong earnings and the overall market’s rally.
That said, the stock has shed 19% over the past year. Wood has unloaded more than 2 million Exact Sciences shares since the beginning of the year.
The company is still the third biggest holding in Ark Innovation ETF, behind No. 1 Tesla and Zoom Video Communications. Exact Sciences was No. 1 for part of January.
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Wood’s Returns Tumble
Meanwhile, Wood’s performance hasn’t exactly overwhelmed the investment world over the past year, as her young technology stocks have slumped. Ark Innovation has slid 44% during that period and 75% from its February 2021 peak.
Still, the fund has rebounded 28% so far this year, joining the tech stock surge.
Wood has defended her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of Ark Innovation was only 1.56% through Feb. 13, compared with 11.16% 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.
Ark Innovation, with $7.4 billion in assets, suffered a net investment outflow of $170 million during the past five days, according to ETF research firm VettaFi. But it has enjoyed an inflow of $972 million over the last year.
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 issued a scathing critique of Ark Innovation last year.
“ARKK shows few signs of improving its risk management or ability to successfully navigate the challenging territory it explores,” he wrote.
Wood, of course, begged to differ. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said in an interview with Magnifi Media by Tifin.
