Cathie Wood, CEO and founder of ARK Invest.
Widespread investor Cathie Wood recovered some of her recent heavy losses as technology stocks rallied on Tuesday after a brutal correction triggered by rising bond yields.
Wood’s active active exchange-traded fund, Ark Innovation ETF (ARKK), gained 8.2% on Tuesday. Tesla, the fund’s largest holding, gained 12.4% in morning trading. Among other things, Zoom Video rose 7% while Palantir rose 6.2%.
Another large Invitae stake rose 13% 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 Composite rising 2.5% as bond yields stabilized. The Nasdaq Composite fell 3.4% 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, increasing its 2021 losses to 11% at the close of trading on Monday.
However, Ark Innovation saw $ 46 million in inflows on Monday as the ETF fell, a vote of confidence for the die-hard investor.
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 saw heavy losses in the month leading up to Tuesday’s session: Tesla lost 33%, Zoom Video lost 27%, Palantir fell 41%.
The founder and CEO of Ark Investment Management said Monday she wasn’t concerned 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 in the long run,” 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.
According to the company, Ark Innovation bought 748,201 shares of DraftKings on Monday. Wood also earned stakes in Fate Therapeutics, Berkeley Lights, and Beam Therapeutics.
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.