ARK Innovation losing more than half of its value in the past year is not enough to derail Cathie Wood's unwavering conviction in innovation investing. The closely-followed portfolio manager, founder and CIO of Ark Invest told investors on Tuesday: "We do believe that innovation is on sale." Wood said she has been using the market volatility to her advantage and concentrating her funds to Ark's highest conviction names. Wood's comments, during an Ark Invest summit, come as her innovation-centered funds have been ravaged for nearly a year. Wood's flagship fund, ARK Innovation , is down more than 55% from its $156.58 per share high notched in February of 2021. The exchange-traded fund closed at $70.80 per share on Tuesday. The fund has taken a sharper leg lower in 2022 following increasing signals from the Federal Reserve that it will take aggressive action to slow down the historic levels of inflation. ARK Innovation is down more than 25% in 2022 alone, as government bond rates move higher and punished growth pockets of the market. More than $200 million in fund flows have exited ARK Innovation, according to FactSet. However, Wood said she believes the inflation and interest rate risks are finally priced into the market. "Many people associate volatility with risk. Volatility is more associated with uncertainty," she said. Wood said her funds are a "wonderful compliment to the tradition asset management-oriented portfolios." If Ark Invest's theses play out, there is going to be disruption and creative disruption in the major benchmark, making Ark funds an "appropriate" and "necessary" hedge, she said. To be sure, Wood's funds have a five-year time horizon. ARK Innovation is about even with the market over the past three years, helped by her banner year in 2020, when ARKK rose nearly 150%. Over the past five years, ARK Innovation has had an annual return of 28%, compared to the S & P 500's annual return of about 16%.
Catherine Wood, chief executive officer of Ark Investment Management.
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ARK Innovation losing more than half of its value in the past year is not enough to derail Cathie Wood's unwavering conviction in innovation investing.