Cathie Wood, CEO and founder of ARK Invest.
CNBC
Widely followed investor Cathie Wood is about to recoup some of her recent sharp losses as tech stocks rebounded Tuesday after a brutal correction triggered by surging bond yields.
Wood’s flagship active exchange-traded fund Ark Innovation ETF (ARKK) climbed 4.8% in premarket trading on Tuesday. Tesla, the fund’s biggest holding, is up 5.2% in early trading. Among other holdings, Zoom Video is up 4.2%, while Palantir gained 3.7%.
Another big holding Invitae is up 10% in premarket trading Tuesday. She told CNBC on Monday that the company, which operates in the molecular diagnostics space, is one of the firm’s most under-appreciated holdings.
The rebound in ‘ARKK’ came amid a 2% jump in Nasdaq 100 futures as bond yields stabilized. The Nasdaq Composite dropped 2.4% on Monday, falling into correction territory, or more than 10% from its recent high.
Wood, who focuses on innovative technology, has seen stocks fitting her strategy get hammered lately amid a big market rotation out of high-flying tech and into cyclical value stocks in the face of higher rates. The fund lost 5.8% on Monday alone, pushing its 2021 losses to 11%.
High-growth names are hit particularly hard as rising rates make their future profits less valuable today, making the stocks’ lofty valuations less justifiable. Many of her big stakes experienced steep losses over the past month: Tesla has shed 33%, Zoom Video has lost 27%, Palantir is down 41%.
The Ark Investment Management founder and CEO said Monday she is not concerned about the recent drop in her funds and she believes over time her disruptive strategy will pay off.
“Right now the market is broadening out and we think in an underlying sense the bull market is strengthening and that will play to our benefit over the longer term,” said Wood said on CNBC’s “Closing Bell” on Monday.
“We are getting great opportunities” in the sell-off to buy the pure play names in the funds, added Wood.
Wood gained a wide following on Wall Street after a banner 2020 that saw her flagship fund return nearly 150% as the pandemic accelerated innovation trends. The fund’s asset under management has ballooned to more than $17 billion.
— CNBC’s Maggie Fitzgerald contributed reporting.