Cathie Wood’s Ark ETF Rallies With Tech High-Flyers Surging
Cathie Wood’s flagship ETF bounced back from its worst run of losses since 2018.
(Bloomberg) -- Cathie Wood’s flagship ETF bounced back from its worst run of losses since 2018, riding the rally in stay-at-home winners who thrived after Friday’s weaker-than-forecast jobs report.
The Ark Innovation exchange-traded fund (ARKK) rose 1.3% to halt an eight-day slide that wiped almost $5 billion from the ETF’s value. Tesla Inc., the fund’s top holding, rose 1.3%, ending its own four-day drop. Roku Inc., the fourth-biggest member, surged 12%. The ETF is still down 30% from its February peak.
“I love that setup,” Wood told CNBC in an interview Friday. “Nothing has changed except the price and therefore the return.” She said she expects her strategy of targeting tech companies that could disrupt industries could return more than 25% compounded annually.
Ark funds added to their stakes in Twitter, Roku, Skillz Inc. and Peloton Interactive Inc. in the week, according to an email from the firm on its trading activity.
Wood gained fame in 2020 when her flagship ETF rose more than nine-fold, handily outperforming the broader market. She piled into stay-at-home winners before the pandemic bottom in March. The holdings in her funds swelled to more than $60 billion, making her company the seventh largest ETF issuer at its peak.
The strategy turned sour in February, when investors rotated into companies that would benefit from the economy’s reopening. The recent selloff, sparked by fear that a surge in inflation would make it hard to justify high valuations in many of the stocks she favors, saw Ark’s ETF holdings shrink to $42.6 billion, leaving the firm in 11th place among issuers.
Wood previously told CNBC that the rotation was good because it signaled the broader participation in the bull market. “The worst thing that could have happen to us is to have the market narrowly focus on just our ilk of stock -- the innovation space. Instead, it has broadened out,” she said Friday.
Wood founded Ark in 2014. The firm’s first four funds were seeded by Bill Hwang, whose family office Archegos Capital Management blew up last month when several bets turned bad.
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