Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Cathie Wood's ARK Innovation fund hits 13-month low in tech selloff

Stock MarketsDec 03, 2021 01:10PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Cathie Wood, founder and CEO of ARK Investment Management LLC, speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 13, 2021. REUTERS/Brendan McDermid

By David Randall

NEW YORK (Reuters) - Star stock picker Cathie Wood's ARK Innovation ETF tumbled more than 7% and hit its lowest level since November 2020 on Friday as bets on a more aggressive Federal Reserve pushed investors to sell the high-growth, high-valuation stocks that rallied during the early stages of the pandemic.

The declines in ARK's portfolio were widespread, with nine out of its 10 top holdings falling as a selloff in technology stocks pushed the benchmark S&P 500 down 1.3%. Tesla (NASDAQ:TSLA) Inc, its largest holding, shed nearly 4%, while Teladoc (NYSE:TDOC) Health Inc, its second-largest holding, dropped 5.2%.

ARK, whose outsized holding of so-called stay at home stocks helped it outperform all other U.S. equity funds last year, is down 25% over the last month. Those declines have come as investors increasingly anticipate that the Federal Reserve could raise interest rates in the year ahead, which would weigh on growth stocks by discounting their future cash flows.

Friday’s declines may have been bolstered by a U.S. employment report showing that the U.S. economy added 210,000 jobs last month, pushing the unemployment rate to a 21-month low of 4.2%.

"Ultimately the lower unemployment rate could help build confidence that the economic growth we've been seeing will continue regardless of what happens with Omicron, and that will push investors out into small-caps and cyclicals instead of the stay at home and technology trades," said Jim Paulsen, chief investment strategist at the Leuthold Group.

Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank is open to accelerating the pace of its tapering program, essentially removing its support of the economy faster than it originally anticipated.

Friday's declines pushed the ARK Innovation fund down 24.5% for the year to date, well behind the roughly 20% gain in the benchmark S&P 500 over the same time.

Roku (NASDAQ:ROKU) Inc, for instance, dropped 4.1% Friday, leaving it down nearly 40% for the year to date, while Spotify Technology SA (NYSE:SPOT) fell 1.4%, leaving it down 28.3% for the year to date.

ARK Invest did not respond to a request for comment for this story.

Cathie Wood's ARK Innovation fund hits 13-month low in tech selloff
 

Related Articles

Russian rouble returns to gains as tax payments loom
Russian rouble returns to gains as tax payments loom By Reuters - May 19, 2022

(Reuters) - The Russian rouble firmed past 63 against the dollar on Thursday, propped up by capital controls as well as looming tax payments that usually require extra conversion...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
Jack AAA
Jack_A Dec 03, 2021 4:43PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The ETF is essentially a bag of junk companies which don't make profits!
Waldemar Gau
Waldemar Gau Dec 03, 2021 2:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
HF seems fighting her too
Gordon Edgett
Gordon Edgett Dec 03, 2021 2:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Cathie Wood knows it is a long term game.
Vi Ma
Vi Ma Dec 03, 2021 1:39PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
haha haha ha ....
Jeff Gordon
Jeff Gordon Dec 03, 2021 1:07PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
everyone made money in the fake covid fed funded market. just wait to see how bad things can really get. you ain't seen nothing
John Avenetti
John Avenetti Dec 03, 2021 1:07PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
yeah but you're not making anything now with that mindset. chicken little makes nothing.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email