Cathie Wood became a star during the pandemic with well-timed bets on companies like Tesla, Zoom and Roku, but those same bets are now draining Ark's cash, prompting investors to protest this year. Withdrawing billions of dollars.
Funders have withdrawn $2.2 billion since January from six ETFs actively managed by Mr. Wood's firm, Ark Investment Management, which is on top of the $760 million raised by investors last year. It has increased significantly since then. wall street journal report. Total assets invested in the six ETFs have fallen 30% since the beginning of the year to $11.1 billion, and are down 81% from their 2021 peak.
Wood's popularity is one of the main attractions for investors to put money into Ark, and through her enthusiastic television appearances and continued activity on social media, she has become a celebrity on and off Wall Street. . Still, Morningstar analyst Robbie Greengold wrote in an April note that Ark's focus on wood is part of the problem.
“Mr. Wood's reliance on intuition to build his portfolio is a liability,” Greengold wrote.
Some of Wood's top picks have fallen sharply this year, even as tech stocks led the market's rally and the S&P 500 rose 6.3%. Tesla accounts for about 9.45% of Wood's flagship Ark Innovation ETF, making it the company's second-largest holding, but it dropped by more than 50% on Tuesday following the release of lackluster first-quarter results. It fell. Even after rebounding Wednesday morning, the company's stock is still down about 35% year-to-date. Some of Ark's other holdings, such as Zoom and Roku, fell 11.5% and 31%, respectively, during the same period.
Wood defended his decision to sell his Ark Innovation ETF's holdings in semiconductor maker Nvidia just before the bull market that saw stocks rise 200% in one year. He said in May that Nvidia faces increased competition from other tech companies such as Tesla, Meta and Apple, adding that it was time for a recalibration.
“We're pivoting to another set of plays that most people haven't discovered yet,” Wood said at the time. “It's like they didn't understand that Nvidia was his AI space until very recently.”
A bright spot for Wood is Coinbase, the Ark Innovation ETF's largest holding. The cryptocurrency exchange's stock price has risen about 47% since January, but it's still a long way from its 2021 highs.
Morningstar estimates that in the 10 years since launching its first fund, Ark Invest has destroyed more than $14 billion in investor wealth, more than any other asset manager in the same period. ing.
Ark Invest did not immediately respond. luckAsked for comment, a spokesperson said: wall street journal He said the flagship fund's 109% return since 2014 is evidence of its strong value creation.
The company's flagship fund is down about 12% since the beginning of the year. It closed less than 1% at $43.90 as of Wednesday afternoon.
