Kathy Wood remains steadfast in her commitment to the company and its vision.
The founders of Ark Invest are known for their unwavering focus on high-tech stocks that they believe will shape the future. Even when these stocks face significant scrutiny, Wood usually takes a measured approach, preferring to hold rather than sell.
This recent move reflects her confidence in renowned tech stocks, which are currently under pressure from media coverage and market fluctuations.
Wood’s funds have had a turbulent year, swinging between considerable losses and impressive gains.
At the start of the year, in January and February, the Ark Fund gained traction as investors hoped for deregulation under the Trump administration, which they thought would favor Wood’s tech investments. However, momentum stalled in March and April, and funds struggled as worries about macroeconomic conditions and trade policies intensified.
As of July 11, the flagship Ark Innovation ETF has surged by 25.5% this year, significantly outpacing the S&P 500’s 6.4% rise.
Wood’s extraordinary 153% return in 2020 helped establish her reputation and draw in dedicated investors. While her strategy can lead to substantial gains in a bull market, it has also resulted in dramatic losses, like the drop of over 60% in 2022.
As of July 11, the ARK Innovation ETF held under $6.8 billion in assets and reported a five-year annual return of only 1.7%. In contrast, the S&P 500 has had an annual return of 16.2% during the same timeframe.
Wood’s investment philosophy is straightforward. Her ARK ETFs predominantly acquire stocks from emerging tech firms in fields such as artificial intelligence, blockchain, biomedical technology, and robotics.
Wood believes these companies have the potential to transform their industries, although their volatility causes significant fluctuations in the value of Ark Funds.
According to an analysis by Morningstar’s Amy Arnott, the ARK Innovation ETF has diminished $7 billion in investor wealth over the decade leading up to 2024, making it the third-largest wealth destroyer among mutual funds and ETFs in her evaluations.
Recently, Wood asserted that the U.S. is on the path to a productivity-driven recovery, which could foster a broader bull market.
In a letter to investors in late April, she dismissed predictions of a recession extending into 2026 and maintained an optimistic outlook for tech stocks.
“Given the current chaotic transition in the U.S., we think consumers and businesses will accelerate their shift towards innovative technological platforms, such as artificial intelligence and blockchain technology,” she remarked.
However, not everyone is as optimistic. The ARK Innovation ETF has experienced nearly $2 billion in net outflows over the last year, according to Vettafi.
On July 11, Wood’s Ark Funds purchased 59,705 shares of Tesla Inc., valued at about $18.7 million.
Wood has been a long-time supporter of Tesla and continues to believe in its potential, even amidst a notable decline following CEO Elon Musk’s announcement of a new political party.
Sales for Tesla have dropped in key markets like Europe and China, coinciding with Musk’s political controversies that have alienated some buyers.
“We’ve navigated controversies around Elon Musk since we initially invested in the stock,” Wood commented in a recent feature. “We trust the board’s judgment and stay distanced from political implications.”
She also indicated that Musk seems refocused on business, especially after taking over sales in the U.S. and Europe.
“He’s overseeing sales in those major markets now,” she mentioned. “When he commits to something, he typically delivers. I think he’s very focused these days.”
Meanwhile, Tesla is set to enter the Indian market with its first showroom opening in Mumbai next week. However, the company has opted against local production, which means they’ll face an import tax around 70%.
In March, Wood forecasted that Tesla’s stock could hit $2,600 within five years, much of this optimism stemming from the anticipated rollout of their advanced technologies.
Tesla has consistently been Wood’s largest holding, comprising 9.26% of the ARK Innovation ETF.
This year, the stock has dropped over 22%, making it one of the poorest performers in her portfolio.
