Cathie Wood’s flagship fund, Ark Innovation, hit its lowest point of the year on Monday as further sales of innovation stocks were made.
Ark Innovation’s 5% decline on Monday pushed the Disruptive Innovation ETF below its March lows, a level many investors see as a barometer for the larger tech sector.
Ark Innovation is now nearly 35% below its last high: $ 159.70 on February 16.
Wood’s core ETF is down more than 13% this month and more than 16% year-to-date.
Some of Ark Innovation’s top positions saw huge hits on Monday as the Nasdaq Composite fell more than 2.5%. Tesla fell 6.4% and Teladoc Health fell 6.6%. Square and Roku fell 7.3% and 4.9%, respectively. DraftKings was down 6.4% and Zillow was down 5.1%.
Wood told CNBC on Friday that she loves the setup for their ETFs after the recent tech stock sell-off. She said she envisioned her strategies that have an average annual return of 25% to 30%.
“I love this setup,” Wood 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.”
However, this month, Ark Innovation left more than $ 1.1 billion in funding. According to FactSet, Ark Invest – including its five core ETFs – lost nearly $ 2 billion to investors in May.
The 200-day moving average is long gone
Ark Innovation fell below its 200-day moving average, an important technical level that has been watched by traders and is essentially the average of the last 200 closing prices.
“The problem with ARKK and other speculative growth ETFs is that short-term rallies have aggressively faded for three months,” Frank Cappelleri, Instinet’s executive director, told CNBC. “It takes more than a few days for the ETF to ricochet to convince traders.”
“In other words, just getting back above the 200-day moving average doesn’t mean much without it being enforced. That remains the top concern,” added Cappelleri.