Cathie Wood, CEO and founder of ARK Invest.
CNBC
Follow-up investor Cathie Wood is on the verge of recovering some of her recent sharp losses as technology stocks recovered Tuesday after a cruel correction caused by rising bonds.
Wood’s flagship active exchange traded fund Ark Innovation ETF (ARKK) climbed 4.8% in pre-trading on Tuesday. Tesla, the bulk of the fund, rose 5.2% in early trading. Among others, Zoom Video increased by 4.2%, while Palantir increased by 3.7%.
Another major stake in Invitae is 10% higher on Tuesday. She told CNBC on Monday that the company, which works in the molecular diagnostic space, is one of the companies that the company greatly appreciates.
The rebound in ‘ARKK’ comes amid a 2% increase in Nasdaq 100 futures contracts as bond yields have stabilized. The Nasdaq compound fell 2.4% on Monday and fell in the correction area, or more than 10% from the recent high.
Wood, which focuses on innovative technology, has recently seen stocks that fit its strategy hampered amid a large market rotation from high technology and in cyclical value stocks in the face of higher rates. The fund lost 5.8% on Monday alone, pushing its losses to 20% in 2021.
High-growth names are particularly hard hit because rising prices make their future gains less valuable today, making the high valuations of the shares less justifiable. Many of its major interests have suffered heavy losses over the past month: Tesla has lost 33%, Zoom Video has lost 27%, Palantir has fallen 41%.
Ark Investment Management founder and CEO said Monday she is not worried about the recent decline in her funds and believes her disruptive strategy could bear fruit over time.
“Right now the market is expanding and we think in the underlying sense that the bull market is strengthening and that will play to our advantage in the long run,” Wood told CNBC ‘Closing Bell’ on Monday.
“We get great opportunities” to buy the pure stakes in the funds, Wood added.
Wood gained a wide following on Wall Street after a banner in 2020 that raised her flagship fund by nearly 150% as the pandemic accelerated innovation trends. The assets of the fund under management amounted to more than $ 17 billion.
CNBC’s Maggie Fitzgerald reported.