Ark’s flagship Ark Innovation ETF has dropped 31% this year, but it has outperformed the S&P 500 over the last five years.
The stock market soared last week, with the S&P 500 index climbing 6% and the technology-heavy Nasdaq Composite gaining 8%.
That was good news for Cathie Wood’s exchange-traded funds at Ark Investment Management. Indeed, Ark’s flagship fund Ark Innovation ETF (ARKK) – Get ARK Innovation ETF Report registered its biggest four-day return since the fund’s inception in 2014, ascending more than 25%, The Wall Street Journal reports. Ark’s funds hold mainly young technology stocks.
To be sure, Ark is still down 31% year to date, after a 23% drop last year. But results have turned out better for the longer term. Ark has generated an annualized total return of 25% over the last five years, compared to 15% for the S&P 500.
Wood has said her stocks are merely undergoing a correction rather than a sustained downtrend. And she has noted that private market valuations for tech stocks are higher than public market valuations, creating a good opportunity to buy publicly-listed tech companies.
Wood has been an active buyer during the stock market’s slide this year. Last week, Ark funds
purchased Archer Aviation (ACHR) , an electric taxi aircraft maker, and China’s BYD (BYDDY) , which makes electric cars.
Wood also has been doing some selling. Last week, she dumped pharmaceutical companies Pfizer (PFE) – Get Pfizer Inc. Report, Regeneron (REGN) – Get Regeneron Pharmaceuticals, Inc. Report and Vertex Pharmaceuticals (VRTX) – Get Vertex Pharmaceuticals Incorporated Report.
One thing is clear: Wood’s investors aren’t abandoning her. Last Tuesday, Ark Innovation saw an inflow of $341 million, its largest daily haul since last May, according to Bloomberg. The fund was on pace for a sixth consecutive week of inflows.
