Cathie Wood, chief executive of Ark Investment Management, traded one of her biggest holdings for the first time in more than a month on April 16.
The stock is Roblox (RBLX), an online video game platform. Ark funds bought 484,480 shares, valued at $19.5 million as of Monday’s close. That’s on the large side for a Wood purchase. She last snatched Roblox shares March 15.
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Roblox stock plunged 12% on Monday, after the company estimated that average bookings per daily active user were in a range of down 2% to up 1% in March from a year earlier. Wood may have seen the stock’s drop as a buying opportunity.
Roblox shares are still up a hefty 41% year to date, though they have slid 5% over the past 12 months. Roblox is the 12th biggest holding in Wood’s flagship Ark Innovation ETF (ARKK).
Also on April 17, Ark Innovation sold 136,604 shares of Exact Sciences (EXAS), valued at $9 million. The company is a medical diagnostics provider famous for its Cologuard at-home colon cancer test.
The stock has ascended 34% thus far in 2023, buoyed by strong earnings, but has eased 4% over the last 12 months.
Ark has unloaded more than 3 million shares of Exact Sciences since Jan. 1. But it’s still the fifth biggest holding in Ark Innovation ETF.
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 32% during that period and 76% from its February 2021 peak.
Nonetheless, the fund has bounced back 25% 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 only 0.07% through April 17, compared with 10.87% 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 registered a small net investment inflow of $3 million during the five days through April 14, and enjoyed an inflow of $682 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.
