Celebrity investor Cathie Wood, chief executive of Ark Investment, traded several familiar names Monday, buying shares of a top semiconductor maker and video-streaming platform.
All the valuations below are as of Monday’s close.
Ark Next Generation Internet ETF (ARKW) purchased 20,593 shares of Nvidia (NVDA), the chip maker, valued at $3.9 million. Ark Innovation ETF (ARKK) snagged 86,899 shares of Roku (ROKU), the video-streaming service, valued at $7.8 million.
Ark funds snatched 221,814 shares of Unity Software (U), a videogame-software company, valued at $9.5 million. Ark funds snapped up 198,427 shares of online videogame platform Roblox (RBLX), valued at $6.2 million.
The funds bought 167,614 shares of robotics-software company UiPath (PATH), valued at $3.3 million.
On the selling side, Ark funds dumped 194,806 shares of e-commerce platform Spotify Technology (SPOT), valued at $21.6 million.
Trailing the S&P 500
As Ark funds have tumbled in recent months, Wood has defended herself by noting that she has a five-year investment horizon.
And the five-year track record of Ark Innovation could indeed give investors comfort until May 9. The fund’s five-year return beat that of the S&P 500 until then. But the five-year annualized return of Ark Innovation totaled 9.81% through May 31, behind the S&P 500’s 13.16% return.
Ark Innovation has fallen 54% so far this year, as Wood’s tech picks have slumped. And it’s down 73% from its February 2021 peak. Raging inflation and soaring interest rates have helped put the kibosh on tech stocks.
Still, Wood’s investors aren’t deserting her. Ark Innovation enjoyed a net inflow of $1.24 billion in the six months through June 3, according to VettaFi, an ETF research firm.
Stagdeflation Coming?
Meanwhile, Wood discussed her macroeconomic views in a recent webinar.
While many experts expect a bout of stagflation -- sluggish economic growth combined with rising inflation -- she sees stagdeflation. That’s slow growth combined with falling inflation.
“We are probably going to see more deflationary forces at the end of all this than inflationary forces,” Wood said. “We are in the early stages of seeing this.” Consumer prices soared 8.3% in the 12 months through April.
Naturally, Wood says this will be a good time for her “disruptive” technology stocks: “During tough times, innovation gains traction.”
Morningstar’s View
On March 29, Morningstar analyst Robby Greengold issued a scathing critique of Ark Innovation.
“ARKK shows few signs of improving its risk management or ability to successfully navigate the challenging territory it explores,” he wrote.
Wood countered Greengold’s points in an interview with Magnifi Media by Tifin. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said.
