Cathie Wood’s Ark Innovation Fund is poised for a big boost on Tuesday as Tesla, other tech darlings, make an appearance
Cathie Wood, CEO and founder of ARK Invest.
Widespread investor Cathie Wood is about to offset some of her recent heavy losses as technology stocks rebounded Tuesday after a brutal correction triggered by rising bond yields.
Wood’s active flagship fund, Ark Innovation ETF (ARKK), gained 4.8% in premarket trading on Tuesday. Tesla, the fund’s largest holding, is up 5.2% in early trading. Among other things, Zoom Video rose 4.2% while Palantir rose 3.7%.
Another large Invitae stake rose 10% in premarket trading on Tuesday. She told CNBC on Monday that the company, which operates in the molecular diagnostics space, is one of the company’s underappreciated holdings.
‘ARKK’ rebounded on the Nasdaq 100 futures rising 2% as bond yields stabilized. The Nasdaq Composite fell 2.4% on Monday, falling in correction territory or more than 10% from its recent high.
Wood, who is focused on cutting-edge technology, has recently seen stocks that fit her strategy get hammered in the midst of a major market rotation from high-flying technology to stocks with cyclical value amid higher interest rates. The fund lost 5.8% on Monday alone and increased its losses to 11% in 2021.
High-growth names are particularly hard hit as rising interest rates make their future earnings less valuable today and the high valuations of the stocks are less justified. Many of their big bets have suffered heavy losses over the past month: Tesla lost 33%, Zoom Video lost 27%, Palantir fell 41%.
The founder and CEO of Ark Investment Management said Monday she wasn’t worried about the recent decline in her funds and she believes her disruptive strategy will pay off over time.
“Right now the market is expanding and we believe that the bull market is getting stronger in a sense and that will be to our advantage over the long term,” Wood said on CNBC’s Closing Bell on Monday.
“We have great opportunities” in the sell-off to buy the game-only names in the fund, added Wood.
Wood won on Wall Street after a banner in 2020 that saw their flagship fund generating nearly 150% return as the pandemic accelerated innovation trends. The fund’s assets under management have grown to over $ 17 billion.
– CNBC’s Maggie Fitzgerald contributed to the coverage.