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Cathie Wood, CEO of Ark Investment Management, is known for actively trading tech stocks she believes will shake up industries.
This week, she stuck to her strategy of buying stocks when their prices drop.
Investors and analysts have mixed opinions on Cathie Wood. Supporters see her as a visionary in tech investing, but critics say she’s only a mediocre fund manager.
Wood's followers affectionately dubbed her “Mama Cathie” after she drew widespread attention with a remarkable 153% return in 2020.
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However, her longer-term performance isn’t so hot:
The flagship ARK Innovation ETF (ARKK) , with $6.7 billion under management, returned 12.65% for the past 12 months, with an annualized three-year return of -15.59% and a five-year return of 2.92%.
In comparison, the S&P 500 gained 25.45% in the past year, with a three-year annualized return of 8.86% and a five-year return of 14.28%.
Cathie Wood’s investment strategy explained
Cathie Wood’s investment strategy is straightforward: Her ARK ETFs typically buy shares in emerging, high-tech companies in fields such as artificial intelligence, blockchain, DNA sequencing, energy storage, and robotics.
Wood says these companies will transform industries, but their volatility causes significant swings in ARK funds' values.
Related: Cathie Wood sells $21.5 million of soaring tech stocks
Investment research firm Morningstar has sharply criticized Wood and Ark Innovation ETF.
Amy Arnott, Morningstar portfolio strategist, calculated that Ark Innovation wiped $7.1 billion of shareholder wealth from its 2014 inception through 2023. That put the ETF as No. 3 on her wealth destruction list for mutual funds and ETFs for the past decade.
Wood recently shared optimism about a move toward fewer regulations under Donald Trump's presidency, especially in areas like technology, cryptocurrencies and digital assets.
“In the last four years, we saw massive concentration toward very few stocks,” Wood said on CNN’s Inside Politics Sunday in December 2024. “I think the market’s going to broaden out right now and reward companies who are at the leading edge of innovation.”
Not all investors are persuaded by Wood's confidence. Over the past year, Ark Innovation ETF saw a net outflow of $3.2 billion, with $219 million exiting the fund in the past week, according to ETF research firm VettaFi.
Cathie Wood bought AMD this week
On Dec. 31, Wood’s Ark funds bought 82,456 shares of Advanced Micro Devices (AMD) .