Cathie Wood loves the setup for her stocks after sell-off, expects big returns from her strategies
Cathie Wood, founder of Ark Invest, said Friday that the decline in technology stocks was nothing to worry about and that her long-term bets would pay off over time.
“I love this setup,” she said on CNBC’s Closing Bell on Friday. “The worst that could have happened to us is that the market is only focused on our stocks – the innovation space.”
Amid the rotation of high-growth market areas, some of Wood’s strategies have declined more than 30% from their February high.
“From our point of view – the time horizon of five years – nothing has changed except the price,” she said. Back in February, Wood was expecting an average annual return of 15% from its strategies. However, after the recent drop in prices, she expects that number to climb to between 25% and 30%.
While Wood is sticking to her long-term bets, one name she’s been selling is Apple. The fund is not allowed to hold cash. Instead, the dollars are parked in what are known as “cash-like innovation stocks,” which include Apple.
“The FAANGs definitely meet these criteria – they act like defenders,” she said. “At a time of volatility like the one we’ve just seen, we’re going to sell these stocks and switch to either our purer or past innovation companies that are being hurt by the risk.”
Wood’s flagship fund, Ark Innovation, gained ground along with the broader tech sector on Friday, though the fund was still down more than 9% over the week.
Amid the weakness, around $ 760 million was withdrawn from the fund last week, according to FactSet.
Despite the outflow, Wood said the company hasn’t seen a month of withdrawals.
Wood rose to fame in 2020 when their line of exchange-traded funds, focused on areas such as the genomic revolution and robotics, far outperformed the broader market.
As their company grew in importance, their funds grew in popularity. According to Wood, fortune in Ark vehicles rose from $ 10 billion to $ 80 billion in just 10 months.
“This is parabolic. We’re used to exponential growth – that’s what we do. Our Ark strategies, our Ark innovation platforms, which we believe will scale exponentially, and so our capacity should scale exponentially. 10 billion to 80 billion were a little faster than that. ” ,” She said.
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