Cathy Wood
Mercedes glass | CNBC
Ark Investment Management founder and CEO Cathie Wood said she is not worried about the recent fall in her funds and that the bullish market is simply expanding to include more strategies like stock.
The investor added that over time his disruptive strategy will bear fruit and that he is capitalizing on the sale.
“Right now the market is expanding and we believe that, in an underlying sense, the bullish market is strengthening and that will serve our long-term profit,” Wood said Monday on Closing Bell CNBC.
Wood manages five ETFs focused on “disruptive innovation” that have amassed more than $ 15 billion in money for investors this year alone. Ark’s flagship fund, Ark Innovation, returned close to 150% in 2020, as the pandemic accelerated innovation trends and now has more than $ 17 billion in net assets. However, ARKK has fallen by about 8% this year amid the recent weakness in technology stocks, pressured by rising interest rates.
“We have great opportunities” in selling to buy the pure gambling names from the funds, Wood said. “When we have opportunities like this to invest in pure plays instead of more mature plays … we will play in pure plays again.”
“We are increasingly optimistic about our portfolios in this sale,” he added.
Wood took advantage of the recent technological weakness as an opportunity to buy the deposit in some of the major holdings of his ETF. Wood has made big purchases from Tesla, Teladoc, Zoom Video and Palantir, according to the firm’s disclosures. Ark Innovation also acquired shares of Square, Roku, Zillow and Shopify recently.
Investors have abandoned some of their high-growth names as bond yields have risen in recent weeks. Wood said Ark Invest was surprised that the market did not have a 0.5%, 1% or 1.5% U.S. Treasury yield at ten years.
“We think the speed of rising interest rates is scaring people. It became very comfortable in a low interest rate environment: nothing changes much, the Fed has our backs and so on.” said Wood.
Wood added that this kind of setback happened in Ark during the fourth quarter of 2016, when President Donald Trump was elected and promised to lower tax rates. During this period, Ark’s strategies were negative.
“The bullish market was expanding to incorporate value or more cyclical sectors and I thought it would be good news because our strategies will last longer. The worst thing that could have happened to us is what made another technology bubble and “Telecommunications where the market shrank, so they only won a few groups,” Wood said.