After A Remarkable Resurgence Last Year, Cathie Wood Says 'Prime Time' For ARK Is Still Ahead
Cathie Wood, Wall Street's star fund manager and CEO of Ark Investment Management, experienced a resurgence of success last year: After two years of significant decline, her Ark stock funds, which focus on tech stocks, rallied and achieved some of the industry's best results.
Data indicates that Wood's $8 billion Ark Innovation ETF (ARKK) recorded a 68% increase in 2023, ranking in the top 1% among similar funds. This is in contrast to the previous period from 2021 to 2022 when the fund had an average annual loss of 50%, reflecting investor sentiment towards its high-growth companies.
I think we did pay our dues in 2021 and 2022, and now we're on the other side of that, said Wood.
ARKK, due to investments in companies like Tesla, achieved over 150% growth in 2020. Afterward, however, due to the Federal Reserve raising interest rates to a 40-year high, the highly concentrated portfolio took major hits in the subsequent two years, losing 23% of its net worth in 2021 and 67% in 2022.
Currently, Wood optimistically predicts that the Federal Reserve will cut interest rates in 2024, bringing inflation rates down to deflationary levels. This is perceived to contribute to the flourishing development of her innovation-based ARKK fund's investment strategy.
Honestly, I think what happened to us in 2021 and 2022-a worse downturn than the Nasdaq during the tech and telecom bust-that doesn't make any sense, because innovation is here and ready for prime time, replied Wood.
However, since the beginning of this year, due to drops in key holdings like Tesla, ARKK has fallen by over 10% since the start of January.
Despite this, Wood continued to buy more Tesla shares. When Tesla announced weaker-than-expected earnings for the fourth quarter last week and warned of a significant slowdown in sales this year, Wood increased her holdings during the price crash, buying shares worth roughly $32.48 million.
She acquired an additional 182,541 shares of Tesla on Friday (26th), worth about $33.45 million calculated at the closing price. In total, Ark Investment purchased Tesla shares worth $65.93 million last week.
Wood has always been confident in Tesla's self-driving technology, seeing it as the core of the future robotaxi service that the company predicts it will launch. She stated last year that she expects Tesla's stock price to reach a target of $2000 per share by 2027, with about 67% of the company's value attributed to its upcoming autonomous driving service.