Cathie Wood Doubles Down
On Monday, Ark Investment Management founder and CEO Cathie Wood appeared in an interview on CNBC and Bloomberg. As many investors already know, Cathie Wood’s fund manages five ETFs focusing on disruptive innovation. Last year, Ark’s flagship fund focusing on disruptive innovation — Ark’s Innovation ETF — gained nearly 150%. However, this year Ark’s Innovation ETF has fallen more than 11%.
Technology stocks have been relatively weak recently, fueled by rising interest rates and fears of inflation. During the interview, Wood gave her opinion on the market’s current conditions and gave investors an update on the state of Ark’s disruptive strategies amid the big tech sell-off.
Wood essentially said investors knew interest rates were never going to stay this low — the market never priced in 0.5%, 1% or 1.5% 10-year Treasury yields. As the economic recovery from the pandemic continued, interest rates would start to rise again. Wood then mentioned she believes the speed at which interest rates rose was unexpected, scaring investors who borrowed money at low-interest rates to invest in high-growth companies.
Investors are now pulling money from high-growth companies like tech stocks and are putting their money into value stocks. Cathie Wood calls this a broadening out of the bull market and says it is good news for Ark’s disruptive strategy in the long run. She said, “We are becoming more and more optimistic about our portfolios in this sell-off.”
The Ark Innovation ETF has fallen more than 30% from its most recent high, but the plunge isn’t scaring Cathie Wood — she’s doubling down.
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