(Bloomberg) — Cathie Wood bought shares of technology companies in the midst of a crushing market crisis even as her flagship fund fell to a new low in 2024.
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Wood’s ARK Innovation ETF (ticker ARKK) bought Amazon.com Inc., Advanced Micro Devices Inc. and Roku Inc., among others, getting in amid a broad decline that led to big losses for many tech stocks. A fintech-focused fund from her firm Ark Investment Management also added Reddit Inc. and Meta Platforms Inc., according to tables the firm publishes daily.
The buying came early in the week, as global markets reeled after weaker-than-expected U.S. jobs numbers fueled fears the economy was on the verge of a deeper downturn. Tech stocks, which had driven the market in recent months, have borne much of the brunt of the pain, though most of the sector is still holding on to healthy gains for the year.
Not so for Wood’s ARKK. The actively managed fund, which was already posting year-to-date losses at the start of the week, has continued its slide, closing Wednesday at its lowest level since November. It has fallen more than 20% this year, wiping out about 75% of its value from its early 2021 peak.
“The last few years have been really challenging” for ARKK, said Todd Sohn, an ETF strategist at Strategas. Of this week’s purchases: “Ark has a history of high-conviction, concentrated investments through their ETFs — there’s a tendency for the team to use sharp market selloffs as an opportunity to put their strongest ideas long,” he said.
Wood gained a following among retail investors in 2020 when her ARKK fund soared 150% in a banner year for tech stocks. Despite a mixed record in the years that followed, including losses in 2021 and 2022, investors held their ground for a while, pouring money into the ETF month after month. But that passion is fading.
Investors have pulled $2.2 billion out of ARKK so far in 2024 as of Tuesday’s close, putting the fund on track for its worst year of outflows since its inception in 2014. All told, the seven active funds in its ETF range have collectively seen $11.5 billion in outflows since the start of 2021, according to data compiled by Sohn at Strategas.
An Ark spokesperson declined to comment.
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