Wall Street does not doubt Cathy Wood is sticking to her strategy and investors staying with hereafter dramatic weeks for ARK Investment Management. This year she was questioned after the selloff in speculative tech stocks and future-focused ETF’S.
More on the sell-offs
As per Bloomberg News, ARK Innovation ETF, the flagship company, saw its lowest point on Wednesday after it slumped 10%. The day also saw the largest U.S. crypto exchange, Coinbase Global Inc., tumbling 26% after disappointing results among other digit assets’ poor performance.
While the rest of the market was offloading the stock, Wood kept playing to her playbook style and increased her holding at every drop, adding 860,000 shares last week till Thursday.
A system that avoids risk-taking positions on losers, Wood has a concentrated portfolio of speculative stocks that leaves her firm with many critics. However, the clarity of goal in going after companies that can turn around from major tech shifts and ARK’s commitment has won Woods many loyal fans.
As per Bloomberg News, ARK plunged last Wednesday; it also saw about $45 million in inflows. Though this amount is relatively small for the $7.8 billion ARK ETF, the net inflows in 2022 have been $1.5 billion. This is for a fund that has plunged by 61% this year.
ETF Trends head of Research, Todd Rosenbluth, said that investors who use the ARK strategy stay loyal and have a long-term investment horizon. They view sell-offs in the market as an opportunity to buy more by deploying additional funds and averaging their investment.
There is, however, no shortage of investors who are willing to bet against ARK. As per data from IHS Market Ltd, short interest in the leading fund is relatively higher at 14.8% of outstanding shares.
Tuttle Capital ETF, Short Innovation Fund, which plays and delivers the opposite performance of ARK ETF every day, saw its price more than double by Wednesday. By the end of the week, things looked up for ARK as tech stocks rebound. The ARK innovation fund jumped by 12 % Friday after it had climbed 5.6% a day earlier.
One of the high-profile picks by Wood, Robinhood Markets Inc., surged after Sam Bankman-Fried, a cryptocurrency billionaire, revealed his major stake in the company. It is still long to undo this year’s damage to Wood’s leading ETF. The fund would require a 260% jump from her to reclaim its all-time high.
Investors continue to depend on ARK ETFs as a vehicle to get in and get out of disruptive technology. The trading volume surged to a record high of 316 million shares in the turbulent last week. As ARK sticks to its strategy, investors know what to expect and can rely on its funds to trade on innovation.
