Cathie Wood Says Ark ‘Soul-Searching’ as Once-Stellar Funds LagETFs
$ARK ETFs.US$ Ark Investment Management is “going through soul-searching” as its growth-focused funds fall out of favor amid expectations of tighter Federal Reserve policy, said founder Cathie Wood.
The $17.8 billion ARK Innovation ETF has tumbled more than 20% this year, with several of its top holdings like electric-vehicle giant Tesla Inc. and video-streaming platform Roku Inc. down from their peaks. During the same period, the S&P 500 Index climbed about 24%.
“I’ve never been in a market that is up -- has appreciated -- and our strategies are down,” Wood said in a Thursday interview with Bloomberg Television. “That has never happened before.”
“When we go through a period like this, of course we are going through soul-searching, saying ‘are we missing something?’” she said, adding that in response, Ark has doubled down on its research and modeling.
Wood noted that the companies she invests in are aggressively investing in the future. While those stocks may have high multiples now, Ark is assuming that those valuations are going to compress in the longer term.
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Feleshia : Cathie can pick good companies but i feel the price targets she comes up with are just pulled out of thin air.
Marilyne : I think one of her problems -agnostic to her picks- is how often she trades. You really can't be a momentum trader with $50B AUM. Allocating/selling 1% of funds in a $5B company is 10% of their float. Slippage is a big problem when you're trading in that quantity and frequency. She needs stop random momentum buys, stick with convictions, and loosen target allocation ranges.