This past year has been extremely challenging for Cathie Wood’s equity funds. The tech-heavy ARK Innovation ETF (ARKK) has been foundering after hitting its peak in February 2021, owing to concerns surrounding the Fed’s hawkish stance, which negatively impacts growth stocks. Furthermore, the escalating Russia-Ukraine war has led to a sharp spike in commodity prices and U.S. Treasury yields, adding to inflationary pressures. These macroeconomic factors have weighed more broadly on ARK’s equity fund.
During the first quarter of 2022, ARKK was the worst-performing U.S. equity fund, and incurring severe losses in the quarter. A sharp selloff in tech stocks has dragged down the leading ARKK fund. Cathie Wood’s top holdings have been retreating sharply due to the selloff. Yesterday, the fund’s third-biggest holding, Teladoc, tumbled more than 46% in price following a poor earnings report. Investors’ bearish sentiment is evident in ARKK’s 61% decline over the past year.
