Cathie Wood's Ark Invest posts 6% weekly gain amid turnaround in innovation names

Published Sun, Jun 13 20218:00 AM EDT

Cathie Wood's Ark Invest funds, which slid while investors flocked to value stocks earlier this year, staged a comeback last week in what could be a turning point for the innovation fund. Ark Invest's flagship ETF — ARK Innovation — notched a 6% gain last week, as investors shrugged off inflation fears and interest rates continued to come down (the 10-year Treasury was below 1.43% on Friday, a three-month low). The innovation fund is up 16.7% over the last month, which could mark a critical moment for the battered ETF. Wood made a name for herself after a banner 2020 where ARK Innovation returned nearly 150% and became the largest actively managed ETF. ARKK has seen more than $6.7 billion in fund flows in 2021 and more than $14 billion in the past 12 months, according to FactSet. Yet shares of ARK Innovation are down 6.7% this year to around $116 per share amid a sharp rotation into value stocks. The ETF is about 27% off its high in February as worries about how the Federal Reserve might react to inflation pushed investors away from technology names . That's because as interest rates rise, the present value of cash flows for growth companies – namely tech stocks – goes down. However, Wood said last Tuesday that the "rotation back to growth is probably close at hand." Wood never doubted the flip back to innovation would happen. She has been buying her highest conviction names — some that are at a significant discount to their levels earlier in the year. "We have capitalized on this volatility by selling names that have held up better than others and moving into names … those that we have a high degree of conviction and those that are more opportunistic," she said during an ARK webinar last week. In June, Wood purchased in her various funds shares of Netflix , Etsy , Google-parent Alphabet , Zoom Video , CRISPR Therapeutics and DocuSign . Wood is even doubling down on her top holding Tesla , which has fallen about 33% from its 52-week high. A new top 10 Wood's top 10 holdings look different since the start of the year, which Wood has said is a result of consolidating into Ark's highest conviction plays. Tesla has long been ARK Innovation's top holding and remains nearly 10% of the ETF's weight. Teladoc Health , Roku and Square are also bellwethers of the fund since 2020, remaining in their top ten spots from last year. Teladoc Health rose 5.6% and Roku rose nearly 6.1% last week. Square climbed 2.6% since Monday. Meanwhile, Zoom Video , Shopify , Spotify Technology , Unity Software , Coinbase Global and Twilio have all joined the top ten in 2021, knocking Invitae , CRISPR Therapeutics , Proto Labs , 2U , Slack and Lending Tree out of the prime spots. Zoom Video rose nearly 9.1% last week. Spotify and Shopify gained close to 3.2% and 3.4%, respectively. Unity Software rallied 4.6% last week. Twilio is up about 7.4% since Monday. Coinbase lost 2.1% last week. Coinbase rose through the ranks especially fast, breaking the top ten just weeks after its public debut in April. The company — founded in 2012 as a way to simplify the purchase of bitcoin — is the world's largest cryptocurrency exchange. Coinbase's shares suffered as the price of bitcoin weakened. A longtime bitcoin bull, Wood told Bloomberg TV in May that she still expects the digital asset to reach $500,000. However, she said the pullback in the price of bitcoin could help the prospects for an Ark bitcoin ETF. Wood has long said being an active manager allows her to be nimble and to take advantage of volatility that is inherent in innovation names. "I think any company on the right side of these five platforms is going to enjoy exponential growth opportunities, the likes of which we have not seen before, except for maybe Amazon over the last 2025 years has been the poster child," said Wood last month.

Cathie Wood

Source: CNBC

Cathie Wood's Ark Invest funds, which slid while investors flocked to value stocks earlier this year, staged a comeback last week in what could be a turning point for the innovation fund.

Ark Invest's flagship ETF — ARK Innovation — notched a 6% gain last week, as investors shrugged off inflation fears and interest rates continued to come down (the 10-year Treasury was below 1.43% on Friday, a three-month low). The innovation fund is up 16.7% over the last month, which could mark a critical moment for the battered ETF.