Cathie Wood, CEO and founder of ARK Invest.
CNBC
Investor Cathie Wood is on the verge of recovering some of her recent sharp losses, with technology stocks rebounding on Tuesday after a brutal correction triggered by rising bond yields.
Wood’s main active stock market fund, Ark Innovation ETF (ARKK), rose 4.8% in pre-market trading on Tuesday. Tesla, the fund’s largest stake, rose 5.2% at the start of the trading session. Among other holdings, Zoom Video rose 4.2%, while Palantir rose 3.7%.
Another big share of Invitae is up 10% in Tuesday’s pre-market. She told CNBC on Monday that the company, which operates in the field of molecular diagnostics, is one of the company’s most underestimated stakes.
The recovery in ‘ARKK’ occurred amid a 2% jump in Nasdaq 100 futures, with the stabilization of bond yields. Nasdaq Composite fell 2.4% on Monday, falling in the correction territory, or more than 10% from its recent high.
Wood, who focuses on innovative technology, has seen stocks that fit his strategy recently been hammered amid a major high-tech market rotation for stocks of cyclical value in the face of higher rates. The fund lost 5.8% on Monday alone, bringing its losses in 2021 to 11%.
High-growth names are hit particularly hard as rising rates make their future profits less valuable today, making high stock valuations less justifiable. Many of his big bets suffered sharp losses last month: Tesla fell 33%, Zoom Video lost 27%, Palantir fell 41%.
Ark Investment Management’s founder and CEO said on Monday that he is not concerned about the recent drop in his funds and believes that his disruptive strategy will pay off over time.
“At the moment, the market is expanding and we believe that, in an underlying way, the bull market is strengthening and that will be beneficial for us in the long run,” said Wood in CNBC’s Closing Bell on Monday.
“We are getting big opportunities” in the liquidation to buy the funds’ pure play names, Wood added.
Wood gained a large following on Wall Street after a banner in 2020, which saw its main fund return by almost 150% as the pandemic accelerated innovation trends. The fund’s managed assets have increased to more than $ 17 billion.
– CNBC’s Maggie Fitzgerald contributed reporting.