Cathie Wood, chief executive of Ark Investment Management, went for one familiar name Friday, in a quiet day of trading for her.
DON’T MISS: Cathie Wood Plows Millions Into Her Newest Investment
Ark funds bought 58,922 shares of Block (SQ), valued at $4.4 million as of Friday’s close, continuing its purchases of recent months.
Block has slumped 47% over the past year amid the decline in financial services and technology stocks. But it has climbed 18% so far this year after strong revenue growth in the fourth quarter. The company is the fifth biggest holding in Wood’s flagship Ark Innovation ETF (ARKK) .
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 41% during that period and 76% from its February 2021 peak.
Still, the fund has bounced back 22% 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 $7.7 billion-asset Ark Innovation was negative 1.03% through March 17, compared with positive 9.22% 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.
Still, Ark Innovation enjoyed a net investment inflow of $502 million during the past five days and a $534 million inflow 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 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.
