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Cathie Wood, CEO of Ark Investment Management, typically focuses on small- and mid-cap technology stocks. She sometimes ventures into megacap stocks, likely aiming to add stability to her funds.
That is what she did last week. She bought $9 million shares of a tech giant amid a market slump, hoping for a bargain.
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Wood’s flagship fund, the Ark Innovation ETF (ARKK) , is down 27.2% year-to-date as of April 4, while the S&P 500 and the Nasdaq Composite lost 13.73% and 19.28%, respectively, during the same period.
Opinions on Wood vary. To her supporters, she is a visionary with a remarkable 153% return in 2020. However, her longer-term performance has raised doubts about her aggressive, opportunistic approach.
As of April 4, Ark Innovation ETF, with $6 billion under management, has delivered an annualized three-year return of negative 15.9% and a five-year return of 1.35%.
In comparison, the S&P 500 index has a three-year annualized return of 5.07% and a five-year return of 17.11%.
Cathie Wood’s investment strategy explained
Wood’s investment strategy is straightforward: Her Ark ETFs typically buy shares in emerging high-tech companies in fields such as artificial intelligence, blockchain, biomedical technology, and robotics.
Wood says these companies have the potential to reshape industries, but their volatility leads to major fluctuations in Ark funds' values.
Related: Cathie Wood's net worth: The Ark Invest CEO's wealth & income
Morningstar’s analyst Amy Arnott calculated that Ark Innovation ETF destroyed $7 billion of shareholder wealth over the 10-year period ended in 2024. That put the ETF as No. 3 on her wealth destruction list for mutual funds and ETFs during that period.
Cathie Wood on Trump’s tariffs
Wood questioned President Donald Trump’s tariffs on April 4 during the "In The Know with Cathie Wood” channel.
The markets have been in turmoil since Trump returned to office. On April 2, Trump announced another round of sweeping tariffs of at least 10% on key U.S. trade partners, and the S&P 500 index lost 10% in the two following sessions.
Trump called the move “reciprocal,” arguing that other countries have taken advantage of the U.S. for too long. Wood questioned that.
Related: Billionaire Bill Ackman delivers frank 3-word message on tariff war
“We know how he calculated his version of reciprocity, but it doesn't seem to make very much sense,” she said. "Things do feel a bit chaotic out there, and the markets are convulsing as a result. There's a lot of uncertainty."