Cathie Wood, CEO and Founder of ARK Invest.
CNBC
Much-followed investor Cathie Wood is about to recoup some of her recent sharp losses as tech stocks rebounded on Tuesday after a brutal correction triggered by rising bond yields.
Wood’s flagship exchange-traded fund, Ark Innovation ETF (ARKK), rose 4.8% in premarket trading Tuesday. Tesla, the fund’s largest holding, is up 5.2% in early trading. Among other things, Zoom Video is up 4.2%, while Palantir is up 3.7%.
Another major holding company Invitae is up 10% on Tuesday in premarket trading. She told CNBC on Monday that the company, which is active in the molecular diagnostics field, is one of the company’s most undervalued interests.
The recovery in ‘ARKK’ came amid a 2% rise in Nasdaq 100 futures as bond yields stabilized. The Nasdaq Composite fell 2.4% on Monday, falling into correction territory, or more than 10% from its recent high.
Wood, who focuses on innovative technology, has seen stocks that fit her strategy have been hammered lately amid a major market rotation from high-flying tech to cyclical value stocks in the face of higher interest rates. The fund lost 5.8% on Monday alone, bringing the loss to 11% in 2021.
Fast-growing names are hit particularly hard as rising prices make their future earnings less valuable today, making high stock valuations less justified. Many of its big stakes have seen hefty losses in the past month: Tesla has lost 33%, Zoom Video has lost 27%, Palantir is down 41%.
Ark Investment Management’s founder and CEO said on Monday that she is not concerned about the recent decline in her funds and believes her disruptive strategy will pay off over time.
“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.
“We’re getting great opportunities” on the sale to buy the pure play names in the funds, Wood added.
Wood gained a wide following on Wall Street after a 2020 banner that saw her flagship fund return nearly 150% as the pandemic accelerated innovation trends. The fund’s assets under management have exploded to more than $ 17 billion.
CNBC’s Maggie Fitzgerald contributed reporting.