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Cathie Wood claims ‘innovation is on sale’ after moving into the tech market

Ark Invest founder Cathie Wood said the sell-off of unprofitable tech companies that hit her hedge fund’s performance only increased her confidence in her positions. herself as she declares that “innovation is on sale” and urges investors to look beyond recent market volatility.

Wood spoke Tuesday at Ark’s 2022 Virtual Big Ideas Summit following a massive drop in her flagship Ark Innovation exchange-traded fund, known for its token ARKK . Shares in a $12 billion vehicle, which combines an ETF structure with the ability to pick stocks, Going down 27% this year and has halved since its peak in February last year.

US Stocks close lower on Tuesday in the latest volatile session as investors braced for a rate hike by the US Federal Reserve. exchange rate right after March. Measures of expected short-term volatility in US stocks, such as the Cboe Vix index, are well above historical averages.

“Many people associate volatility with risk,” says Wood.

“We use volatility to our advantage,” she added. “We focus on our most persuasive names, and that tends to work very well when we make these tweaks.”

ARKK makes bold bets on high-growth US listed companies, especially in areas related to DNA technology, automation, robotics, energy storage, artificial intelligence and fintech. Some of their biggest holdings have plummeted this year, with Tesla down 23.5%, Zoom Video Communications down 20.7% and Coinbase Global down 26.1%.

The improved growth outlook and the shift by central banks to a tougher stance on inflation have hampered Turn investors from high growth stocks such as those favored by Wood to gauge names in industries more closely tied to economic recovery.

But Wood urged investors to look beyond recent market turmoil to take advantage of cheaper valuations, pointing to Ark Invest’s five-year period.

“Innovation is on sale and it’s really important for investors to stay on track with change, with the level of disruption we expect,” she said.

While ARKK has an excellent long-term record, the average investor in an ETF is underwater now because much of its gains come when it has a much smaller asset base.

Wood said: “Since we are focusing on 5 years, keep an eye on the award. She acknowledged “the market is tough” but said that “our confidence over the past year has really grown”.

She added: “These exponential growth trajectories have been accelerated by Covid and made even more so by the chaos we are seeing in labor markets, logistics and financial markets. ”

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