Famed money manager Cathie Wood over the past few weeks has been buying and selling some of her favorite names in a stream of trading.
And the Ark Investment Management chief executive was at it again Jan. 30, buying shares of the ninth biggest holding in her flagship Ark Innovation ETF (ARKK).
Ark funds added 301,953 shares of Teladoc (TDOC), the online health service, with that stash valued at $8.4 million as of the Jan. 30 close. Teladoc has plummeted 62% over the past 12 month amid the slump in e-commerce companies.
Amid other Wood trades Jan. 30, Ark Fintech Innovation ETF (ARKF) snagged 77,362 shares of Roku (ROKU), the online streaming service. That was valued at $4.2 million as of the Jan. 30 close.
Roku, the fourth biggest holding of Ark Innovation ETF, has lost 66% during the last year amid intense competition in the streaming industry.
Wood’s Returns Tumble
Meanwhile, Wood’s performance hasn’t exactly overwhelmed the investment world over the past year, as her young technology stocks have slumped. Ark Innovation has slid 47% during that period and 75% from its February 2021 peak.
To be sure, the fund has rebounded 27% so far this year, joining the technology stock surge.
Wood has defended her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of Ark Innovation was negative 0.27% through Jan. 30, compared with a positive return of 9.23% 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’s subpar returns may be starting to deter investors. The $7.4 billion fund registered a net investment outflow of $135 million during the past five days. But it has posted an inflow of $1.07 billion over the past 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.
