Cathie Wood, CEO of ARK Invest, has been hailed as both ‘Hero’ and ‘Zero’ over the past couple of years.
With a focus on technology and innovation, Wood’s early adoption strategy and aggressive investment style has divided opinion on Wall Street.
Tesla and Moderna have been key holdings for Wood. In 2020 shares gained 695% and 485% respectively, leading to Bloomberg naming Wood ‘Stock Picker of the Year’.
However, Wood’s fall from grace has been spectacular – almost Neil Woodford spectacular!
US and Chinese technology stocks, to which ARK funds are greatly exposed, have plummeted over the past year amid concerns of rising interest rates and regulatory intervention. ARK’s flagship Innovation ETF is down over 60% in the last 12 months. In fact, 4 of ARK’s 8 ETFs are down more than half, during the same period.
How did it get so bad for Wood’s funds? Whilst investors would expect to tolerate some volatility being invested in tomorrow’s technology, they would also expect an element stability often associated with funds. A 60% decline requires a 150% increase to return to breakeven, its a long road ahead for some ARK investors.
Marc Kimsey, Frederick & Oliver
With US inflation at a 40-year high, the Federal Reserve will remain under pressure to hike interest rates, further challenging Wood’s technology stocks.
That said, whilst the US technology sector has endured a torrid 6-12 months, at what point will the discounts prove too good to pass up?
- Netflix -75%
- Amazon -45%
- Peloton -85%
- Tesla -45%
- Meta -50%
- Apple -24%
At Frederick & Oliver, you can buy positions in stocks such as Netflix, Amazon and Apple for 20% cash outlay. That’s right, you could buy a $10,000 position for $2,000 or a $100,000 position for $20,000.
For more information call now on 020 8054 7901.
By Marc Kimsey