Cathie Wood has said in recent weeks that she’s not giving up on her speculative technology growth stocks.
Star investor Cathie Wood of Ark Investment Management isn’t just talking the talk in her investing. She’s also walking the walk.
Wood has said in recent weeks that she’s not giving up on her speculative technology growth stocks. Their recent declines are temporary and only have made their prices more attractive, she maintains.
And she has acted on that view by purchasing some of these stocks. Ark’s flagship fund, Ark Innovation ETF (ARKK) – Get ARK Innovation ETF Report, has snagged more than $400 million of them in the past two weeks, The Wall Street Journal reports.
The list includes financial services company Block (SQ) – Get Square, Inc. Class A Report, on,line videogame platform Roblox (RBLX) – Get Roblox Corp. Class A Report and securities brokerage app Robinhood Markets (HOOD) – Get Robinhood Markets, Inc. Class A Report.
Tech Stocks Have Slumped as Fed Rate Hikes Loom
Speculative technology stocks have sunk in recent months amid rising bond yields and anticipation that the Federal Reserve will raise interest rates soon.
Rising rates hurt these stocks by making safe investments, such as Treasury bonds, appear more attractive than stocks with distant earning potential.
Many of Wood’s “disruptive” technology companies also are borrowers, so higher rates mean a bigger debt load for them.
In the Ark Innovation ETF, No. 1 holding Tesla (TSLA) – Get Tesla Inc Report, the electric car titan, has dropped 38% in the past three months; No. 2 Roku (ROKU) – Get Roku, Inc. Class A Report, a streaming platform, has given up 40%; and No. 3 Teladoc Health (TDOC) – Get Teladoc Health, Inc. Report, an online healthcare company, has lost 47%.
But Wood is unbowed by the decline of Ark funds.
“The important thing to keep in mind is the long-term horizon that we invest in,” she told investors last month. “We have a five-year horizon. I’ve never seen innovation on sale like it is today.”
