Cathie Wood, chief executive of Ark Investment Management, bought one and sold another of her favorite stocks Friday, repeating recent activity.
Ark Genomic Revolution ETF (ARKG) dumped 46,132 shares of Exact Sciences (EXAS), valued at $3.1 million as of Friday’s close. The company is a medical diagnostics provider famous for its Cologuard at-home colon cancer test.
DON’T MISS: Cathie Wood Backs Out of One Investment She Previously Praised
Exact Sciences stock has ascended 33% thus far in 2023, buoyed by strong earnings but has descended 13% over the last year.
Ark has shed more than 3 million of the company’s shares since Jan. 1. But it’s still the biggest holding by far in Ark Genomic Revolution.
On the buying side, Ark funds purchased 16,257 shares of video streaming platform Roku (ROKU), valued at $1.1 million as of Friday’s close.
The stock has dropped 48% over the past year amid intense competition in the streaming industry. But it has soared 59% so far this year, helped by strong earnings and the technology sector’s rebound. Roku is the third biggest holding in Wood’s flagship Ark Innovation ETF (ARKK).
Wood’s Lagging Returns
Meanwhile, her 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 42% during that period and 76% from its February 2021 peak.
Nonetheless, the fund has bounced back 25% 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 $7.8 billion-asset Ark Innovation was only 1.93% through March 31, compared with 11.19% 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.
She may be losing her popularity. Ark Innovation suffered a net investment outflow of $304 million during the five days through March 24. But it enjoyed a net inflow of $156 million 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 offered a harsh critique of Ark Innovation in March. “Its dubious ability to successfully navigate the challenging territory it explores earns a rating of negative,” 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 last year in an interview with Magnifi Media by Tifin.
