When Cathie Wood's flagship fund hit a new low in 2024, she bought heavily into tech stocks that were hit hard in the market downturn.
Cathie Wood, the manager of ARK Innovation ETF (ARKK.US), bought a large amount of stock in tech companies that were hit hard in the market downturn when her flagship fund hit a new low in 2024. According to data released daily by ARK Investment Management, Wood's fintech fund also increased its holdings in Reddit (RDDT.US) and Meta Platforms (META.US), as well as stocks such as Amazon (AMZN.US), AMD (AMD.US), and Roku (ROKU.US), taking advantage of the opportunity presented by the widespread decline in the stock market.
At the beginning of this week, lower-than-expected US employment data caused market concerns about an economic recession, leading to global market volatility. Tech stocks, which had been the main driving force behind the rise of the stock market, have recently suffered significant losses, although many stocks still maintained some gains this year.
However, Wood's actively managed ARK Innovation ETF has not enjoyed this kind of gain. The fund has been in the red since the beginning of the week and has continued to fall, reaching its lowest level since November at the close of trading on Wednesday. This year, the fund has fallen more than 20%, and its value has shrunk by about 75% from its high point in early 2021.
Todd Sohn, ETF strategist at Strategas, said, "The past few years have been a challenge for the ARK Innovation ETF." In commenting on Wood's recent buying behavior, he said, "Ark has always made highly concerted and concentrated investments through its ETF, and the team tends to increase its long-term investments in its most steadfast beliefs during market downturns."
In 2020, thanks to the strong performance of tech stocks, Wood's ARK Innovation ETF soared 150%, winning the favor of many retail investors. Despite the fund's volatile performance in the following years, including losses in 2021 and 2022, investors maintained confidence and continued to invest in the ETF. However, this enthusiasm seems to be waning.
As of Tuesday's close, investors had withdrawn $2.2 billion from the ARK Innovation ETF this year, making it the fund's biggest outflow since its inception in 2014. According to data compiled by Sohn at Strategas, Wood's seven actively managed ETFs have seen a total outflow of $11.5 billion since the beginning of 2021.
Representatives of Ark Investment Management have not yet commented on these market changes.