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Cathie Wood's Ark Innovation ETF surges more than 10% for its best day ever

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Cathie Wood: The bull market is broadening and will be good for our funds long-term

Widely followed investor Cathie Wood recouped some of her recent sharp losses as tech stocks rebounded Tuesday after a brutal correction triggered by surging bond yields.

Wood's flagship active exchange-traded fund Ark Innovation ETF (ARKK) climbed 10.4% on Tuesday, for the fund's best day ever. Tesla, the fund's biggest holding, rose 19.6%. Among other holdings, Zoom Video gained 10%, while Palantir popped 7.7%.

Another big holding Invitae rose 11.7% Tuesday. She told CNBC on Monday that the company, which operates in the molecular diagnostics space, is one of the firm's most under-appreciated holdings.

The rebound in 'ARKK' came amid a 3.6% jump in the Nasdaq Composite as bond yields stabilized. The Nasdaq Composite dropped 2.4% on Monday, falling into correction territory, or more than 10% from its recent high.

Wood, who focuses on innovative technology, has seen stocks fitting her strategy get hammered lately amid a big market rotation out of high-flying tech and into cyclical value stocks in the face of higher rates. The fund lost 5.8% on Monday alone, pushing its 2021 losses to 11% as of Monday's close.

Ark Innovation, however, did see $46 million in inflows on Monday as the ETF was dropping, a vote of confidence in the hot-handed investor.

High-growth names are hit particularly hard as rising rates make their future profits less valuable today, making the stocks' lofty valuations less justifiable. Many of her big stakes experienced steep losses over the past month before Tuesday's session: Tesla shed 33%, Zoom Video lost 27%, Palantir was down 41%.

The Ark Investment Management founder and CEO said Monday she is not concerned about the recent drop in her funds and she believes over time her disruptive strategy will pay off.

"What has just happened in the equity market is a massive and severe....rotation into value stocks," Wood said on her monthly webinar on Tuesday. "The bull market broadened out into value in a more serious way."

"We are getting great opportunities" in the sell-off to buy the pure play names in the funds, Wood told CNBC on Monday.

Ark Innovation purchased 748,201 shares if DraftKings on Monday, according to the firm's disclosures. Wood also scooped up shares of Fate Therapeutics, Berkeley Lights and Beam Therapeutics.

Wood gained a wide following on Wall Street after a banner 2020 that saw her flagship fund return nearly 150% as the pandemic accelerated innovation trends. The fund's asset under management has ballooned to more than $17 billion.

— CNBC's Maggie Fitzgerald contributed reporting.