Cathie Wood of Ark Investment Management says the drop of Ark funds’ speculative technology stocks is just a temporary thing.
And many investors apparently agree. In the past week, Ark Innovation ETF (ARKK) has seen an inflow of $168 million, leaving the fund’s net assets at $11.8 billion, according to FactSet, as cited by The Wall Street Journal.
Ark Innovation’s return soared 157% in 2020 but slid 23% last year and has dropped another 27% so far this year. That has left it trading at the same level as it did in June 2020.
Rising interest rates have hurt Ark stocks, making their promise of earnings growth less attractive compared with safe investments like Treasury bonds.
Ark Innovation’s biggest position, Tesla (TSLA), has slid 20% this year, No. 2 Zoom Video Communications (ZM) has lost 22%, and No. 3 Teladoc Health (TDOC), also has fallen 22%.
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But Wood is unbowed. “The important thing to keep in mind is the long-term horizon that we invest in,” she said last week in an Ark webinar. “We have a five-year horizon. I’ve never seen innovation on sale like it is today.”
To be sure, not all of Ark’s funds are receiving loyalty from shareholders. The company’s funds as a whole have seen a net outflow of $1.4 billion in the past month, the biggest negative number for any U.S. ETF issuer, the Journal reported, citing FactSet data.
