Asset manager Cathie Wood’s flagship Ark Innovation ETF has fallen 51% this year and is down 71% from its February 2021 peak.
The prominent investor Cathie Wood traded familiar names on June 7, buying shares of an online videogame platform and selling an e-commerce company.
All the valuations below are as of Tuesday’s close.
Ark funds purchased 422,638 shares of the videogame platform Roblox (RBLX) – Get Roblox Corporation Class A Report valued at $13.3 million. The stock has dropped 67% year to date.
Ark Innovation ETF (ARKK) – Get ARK Innovation ETF Report snagged 58,844 shares of Roku (ROKU) – Get Roku Inc. Report, a video-streaming service, valued at $5.5 million. The stock has tumbled 56% this year.
Ark Genomic Revolution ETF (ARKG) – Get ARK Genomic Revolution ETF Report snatched 129,800 shares of Burning Rock Biotech (BNR) – Get Burning Rock Biotech Limited Report, valued at $279,070. The stock has slumped 76% year to date.
Ark funds snapped up 99,132 shares of UiPath (PATH) – Get UiPath Inc. Class A Report, a robotics-software company, valued at $2 million. The stock has dived 50% this year.
On the selling side, Ark funds unloaded 324,672 shares of music-and-podcast platform Spotify Technology (SPOT) – Get Spotify Technology S.A. Report, valued at $35.6 million. Wood continued to shed shares of the company, which has seen its stock shed 51% year to date.
Loyal Following
Wood has developed a loyal following among retail investors. And many of them appear not too worried about the underperformance of her funds — at least her flagship, Ark Innovation.
Ark’s roster of nine exchange-traded funds saw assets decrease 48% in 2022 through June 1, to $15.3 billion, according to Bloomberg. That’s the largest drop among the biggest 25 U.S. ETF issuers.
The asset shrinkage stemmed largely from fund performance. The Ark funds as a whole have net inflow of $167 million so far this year.
To be sure, more than 100% of that total comes from Wood’s flagship Ark Innovation ETF (ARKK) – Get ARK Innovation ETF Report. It enjoyed a net inflow of $1.24 billion in the six months through June 3, according to VettaFi, an ETF research firm.
That means the other funds likely had a combined outflow of more than $1 billion. In any case, in Ark Innovation at least, Wood, whose fans have taken to calling her Mamma Cathie, hasn’t lost her following.
Trailing the S&P 500
As Ark Innovation and the other Wood funds have tumbled in recent months, she has defended herself by noting that she has a five-year investment horizon.
And the five-year track record of Ark Innovation could indeed give investors comfort until May 9. The fund’s five-year return beat that of the S&P 500 until then. But the five-year annualized return of Ark Innovation totaled 10.42% through June 6, behind the S&P 500’s 13.34% return.
Ark Innovation has fallen 51% so far this year, as Wood’s tech companies have hit the skids. And it’s down 71% from its February 2021 peak. Raging inflation and soaring interest rates have helped put the kibosh on tech stocks.
“Most [fund managers] would probably collapse if they had the same performance, but Cathie and Ark have a strong following,” Bloomberg Intelligence ETF analyst Athanasios Psarofagis told his company’s news service.
