Cathie Wood, chief executive of Ark Investment Management, trafficked in a few big names among her familiar stocks Tuesday.
Ark Fintech Innovation ETF (ARKF) bought 23,307 shares of social media stalwart Pinterest (PINS) Tuesday, after snagging 133,779 shares Monday (the first purchase since January). The combined cache was valued at $3.9 million as of Tuesday’s close.
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The stock has firmed 3% so far this year and 12% over the last 12 months amid the company’s strong performance, including a user increase in the fourth quarter. Pinterest is the 21st biggest holding in Ark Fintech Innovation.
Ark funds sold 325,930 shares of cloud-communications company Twilio (TWLO), valued at $20.5 million as of Tuesday’s close.
The stock has dropped 51% over the last year, but has jumped 29% year to date, helped by a strong fourth-quarter earnings report. Twilio is the 11th largest holding in Wood’s flagship Ark Innovation ETF (ARKK).
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Ark funds snagged 186,284 shares of Block (SQ) Tuesday, valued at $13.7 million as of that day’s close.
Block has slumped 22% over the past year amid the decline in financial services and technology stocks. But it has climbed 18% so far this year after strong revenue growth in the fourth quarter. The company is Ark Innovation’s fifth biggest holding.
Wood’s Lagging Returns
Meanwhile, Wood’s performance hasn’t exactly lit the investment world on fire over the past year, as her young technology stocks have slumped. Ark Innovation has descended 30% during that period and 76% from its February 2021 peak.
Still, the fund has bounced back 22% so far this year, as tech stocks have rebounded in general.
Mama Cathie, as Wood is known to her fans, defends her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of $7.4 billion-asset Ark Innovation was negative 1.82% through March 14, compared with positive 9.25% for the S&P 500.
The fund’s performance also doesn’t come close to Wood’s goal for annualized returns of 15% over five-year periods.
Ark Innovation enjoyed a net investment inflow of $243 million during the past five days and a $452 million inflow over the last year, according to ETF research firm VettaFi
What Draws Investors to Wood
You might wonder why so many investors have stuck with Wood. The fact that she had one spectacular year certainly helps. Ark Innovation skyrocketed 153% in 2020.
Also, Wood has become something of a rock star in the investment world, appearing frequently in the media. She explains financial concepts in ways that novice investors can understand.
Wood does have her detractors. Morningstar analyst Robby Greengold issued a scathing critique of Ark Innovation last year.
“ARKK shows few signs of improving its risk management or ability to successfully navigate the challenging territory it explores,” he wrote.
Wood, of course, begged to differ. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said in an interview with Magnifi Media by Tifin.
