If you’ve followed Cathie Wood’s trades in recent months, you’ve undoubtedly noticed that the chief executive of Ark Investment Management has been shedding Exact Sciences (EXAS) stock.
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She did it again Thursday. Ark funds sold 146,411 shares of the company, valued at $9.7 as of that day’s close. Exact Sciences 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 dipped 3% over the past 12 months.
Ark has shed more than 3 million shares of Exact Sciences since Jan. 1. But it’s still the sixth biggest holding in Wood’s flagship Ark Innovation ETF (ARKK).
Wood’s Lagging Returns
Meanwhile, her 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 38% during that period and 76% from its February 2021 peak.
Nonetheless, the fund has bounced back 23% 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 $7.4 billion-asset Ark Innovation was only 1.35% through April 6, compared with 11.48% 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 saw a net investment outflow of $48 million during the five days through April 6 but an inflow of $582 million over the past 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.
