Cathie Wood, CEO of Ark Investment Management, typically focuses on small- and mid-cap technology stocks. She sometimes ventures into megacap stocks, likely aiming to add stability to her funds.
That is what she did last week. She bought $9 million shares of a tech giant amid a market slump, hoping for a bargain.
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Wood’s flagship fund, the Ark Innovation ETF (ARKK) , is down 27.2% year-to-date as of April 4, while the S&P 500 and the Nasdaq Composite lost 13.73% and 19.28%, respectively, during the same period.
Opinions on Wood vary. To her supporters, she is a visionary with a remarkable 153% return in 2020. However, her longer-term performance has raised doubts about her aggressive, opportunistic approach.
As of April 4, Ark Innovation ETF, with $6 billion under management, has delivered an annualized three-year return of negative 15.9% and a five-year return of 1.35%.
In comparison, the S&P 500 index has a three-year annualized return of 5.07% and a five-year return of 17.11%.
The Ark Innovation ETF has seen a net outflow of $2.33 billion over the past 12 months through April 3, with nearly $26 million exiting in the past five days.
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Cathie Wood’s investment strategy explained
Wood’s investment strategy is straightforward: Her Ark ETFs typically buy shares in emerging high-tech companies in fields such as artificial intelligence, blockchain, biomedical technology, and robotics.
Wood says these companies have the potential to reshape industries, but their volatility leads to major fluctuations in Ark funds’ values.
Related: Cathie Wood’s net worth: The Ark Invest CEO’s wealth & income
Morningstar’s analyst Amy Arnott calculated that Ark Innovation ETF destroyed $7 billion of shareholder wealth over the 10-year period ended in 2024. That put the ETF as No. 3 on her wealth destruction list for mutual funds and ETFs during that period.
Cathie Wood on Trump’s tariffs
Wood questioned President Donald Trump’s tariffs on April 4 during the “In The Know with Cathie Wood” channel.
The markets have been in turmoil since Trump returned to office. On April 2, Trump announced another round of sweeping tariffs of at least 10% on key U.S. trade partners, and the S&P 500 index lost 10% in the two following sessions.
Trump called the move “reciprocal,” arguing that other countries have taken advantage of the U.S. for too long. Wood questioned that.
Related: Billionaire Bill Ackman delivers frank 3-word message on tariff war
“We know how he calculated his version of reciprocity, but it doesn’t seem to make very much sense,” she said. “Things do feel a bit chaotic out there, and the markets are convulsing as a result. There’s a lot of uncertainty.”
Wood said that if Trump’s tariff isn’t handled carefully, it could lead to a bear market or a recession. Still, she’s hopeful things will calm down as the negotiations move forward.
“Trump wants to be one of the greatest presidents ever…he’s not going to get there by throwing the economy into a recession and the stock market into a bear market,” she said.
But not all investors share Wood’s optimism. The Ark Innovation ETF has seen a net outflow of $2.33 billion over the past 12 months through April 3, with nearly $26 million exiting in the past five days, according to ETF research firm VettaFi.
Cathie Wood buys $9 million of Amazon stock
On April 4, Wood’s Ark funds bought 54,120 shares of Amzon.com (AMZN) .
That chunk of stock is valued at roughly $9.3 million. The purchase was made as the stock slid 4% that day, bringing its loss for the year to 22%.
Her last two Amazon purchases were made in February when the company’s stock fell from an all-time high after a disappointing outlook.
On Feb. 6, the e-commerce giant reported that it topped Wall Street’s expectations in the fourth quarter of 2024, with earnings of $1.86 a share and revenue of $187.79 billion.Â
But the company’s forecast for the current quarter fell short. It expects revenue to grow between 5% and 9%—at the low end of the range, that would mark the slowest growth on record.
Amazon has been expanding into AI, hoping to spark momentum beyond retail and cloud. In late February, the company rolled out Alexa+, an upgraded AI assistant that can handle tasks like managing smart home devices, ordering from Uber Eats, and tracking Ticketmaster sales.
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“The Alexa+ upgrade reinforces Amazon’s dominance and signals a push toward more AI-driven personal assistance in everyday life,” Ark Investment’s associate portfolio manager Nick Grous commented.
Amazon shares rose 44% in 2024, outpacing the Nasdaq, which gained 29%.Â
The stock is the 15th largest holding of the Ark Innovation ETF as of April 4, occupying 2.17%.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
