Cathy Wood
Crystal Mercedes | CNBC
Cathie Wood, founder and CEO of Ark Investment Management, said she is not concerned about the recent decline in her funds and that the bull market is simply expanding with more strategies such as value.
The short-tempered investor added that her disruptive strategy pays off over time, and she’s benefiting from the sell-off.
“Right now the market is expanding and we think in an underlying sense that the bull market is getting stronger and that will work in our favor in the longer term,” Wood said on CNBC’s “Closing Bell” on Monday.
Wood operates five ETFs focused on “disruptive innovation” that raised more than $ 15 billion in investor money this year alone. Ark’s flagship fund – Ark Innovation – returned nearly 150% in 2020 as the pandemic accelerated innovation trends and now has more than $ 17 billion in net worth. However, the ARKK is down about 8% this year due to the recent weakness in technology stocks, under pressure from rising interest rates.
“We’re getting great opportunities” on the sale to buy the pure play names in the funds, Wood said. “If we get opportunities like this to invest in pure plays instead of more mature plays … we’ll go back to pure plays.” “
We are becoming increasingly optimistic about our portfolios during this sell-off, ”she added.
Wood used the recent technical weakness as an opportunity to buy the dip in some of her ETF’s top positions. According to the company’s revelations, Wood has made major purchases from Tesla, Teladoc, Zoom Video and Palantir. Ark Innovation also recently took in shares of Square, Roku, Zillow and Shopify.
Wood said the Ark Invest notes that the market has never priced a 0.5%, 1%, or 1.5% return on the US 10-year Treasury.
“We really think the rate of interest rate hike scares people. It got very comfortable in a low interest rate environment: not much is changing, the Fed has us back and forth,” Wood said.
Wood added that this kind of pullout happened to Ark in the fourth quarter of 2016, when President Donald Trump was elected and promised to cut tax rates. During that time, Ark’s strategies turned negative.
“The bull market expanded to include value or more cyclical sectors and I thought this would be very good news for our longer-term strategies. The worst that could have happened to us is another technology and telecom bubble in which the market shrank so that only a few groups won, ”Wood said.