Here's why Cathie Wood says it's a mistake to sell stay-at-home winners like Zoom and Roku

Published Wed, Jul 14 20216:06 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

Money manager Cathie Wood on Wednesday defended her flagship fund's holdings in a number of companies that have become known as stay-at-home stocks during the Covid pandemic. In an interview on CNBC's "Closing Bell," the Ark Invest founder said she continues to see a bright future for Teladoc , Zoom Video Communications and some other firms that benefited from coronavirus-driven lifestyle changes. Even as vaccinations have allowed for the resumption of more economic activity, and Wall Street shifted accordingly, they remain core holdings in the actively managed Ark Innovation ETF. While electric vehicle maker Tesla is the fund's largest constituent, with a 10.4% weighting as of Wednesday, No. 2 is Roku . The maker of video-streaming devices has a 5.99% weighting. "Roku is a very important name to us. Square , Zoom, Shopify , Teladoc — many of them are described as stay-at-home stocks," Wood said. Some observers say, "'We're going back to work. Why are you paying attention to them?'" she added. "What we believe is the coronavirus crisis changed the world dramatically and permanently, and when consumers and businesses find faster, cheaper, better, more productive, more creative -— they're not going back to the old world," Wood said. Teladoc, which offers a platform for telehealth services, is ARKK's third-largest holding, at 5.72%. That's followed by ecommerce platform Shopify, at 4.75%, and fintech firm Square, at 4.64%. Zoom, which became a household name during the pandemic thanks to its videoconferencing software, is the ETF's sixth-biggest position, at 4.57%. "Many of these stocks have been cut in half and then some because there are have been algorithms saying, 'They're stay-at-home stocks. Sell them.' We think that's a mistake." Wood and her firm have became closely followed on Wall Street after the flagship ARKK and its other ETFs performed remarkably well last year, prompting billions of dollars in inflows. The firm likes to invest around what it dubs disruptive innovation. ARKK is down about 5% so far this year, but remains up nearly 50% in the past 12 months.

People pass by a video sign display with the logo for Roku, a Fox-backed video streaming company, Sept. 28, 2017.

Brendan McDermid | Reuters

Money manager Cathie Wood on Wednesday defended her flagship fund's holdings in a number of companies that have become known as stay-at-home stocks during the Covid pandemic.