Famed money manager Cathie Wood, chief executive of Ark Investment Management traded three big-name stocks Friday, repeating moves of the prior day and recent months.
Ark funds bought 119,543 shares of Coinbase Global (COIN), the largest U.S. cryptocurrency exchange, valued at $7.7 million as of Friday’s close.
DON’T MISS: Cathie Wood’s Theory Behind Her Firm's Tesla Investment
The company’s shares have tumbled 60% over the past 12 months amid turmoil in the cryptocurrency market. But they have rebounded 89% this year, helped by bitcoin’s recovery. Coinbase is the sixth biggest holding in Wood’s flagship Ark Innovation ETF (ARKK).
On the selling side, Ark funds dumped 58,195 shares of online sports gambling platform DraftKings (DKNG), valued at $1.1 million as of Friday’s close.
The stock has gained 6% in the past year and 69% year to date amid strength in the sports-gambling market. DraftKings is the 11th biggest holding in Ark Innovation, falling one place Friday.
Ark funds unloaded 11,987 shares of Exact Sciences (EXAS), valued at $809,200 as of Friday’s close. The company is a medical diagnostics provider famous for its Cologuard at-home colon cancer test.
Exact Sciences stock has climbed 39% thus far in 2023, buoyed by strong earnings and the overall market’s rally. The shares have eased 3% over the past year.
Wood has unloaded more than 2 million Exact Sciences shares in 2023. But the company remains the fourth biggest holding in Ark Innovation.
Ark's Lagging Performance
Meanwhile, Wood’s performance hasn’t exactly lit the investment world on fire over the past year, as her young technology stocks have slumped. Ark Innovation has descended 30% during that period and 75% from its February 2021 peak.
Still, the fund has bounced back 30% so far this year, as tech stocks have rebounded in general.
Mama Cathie, as Wood is known to her fans, defends her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of $7.6 billion Ark Innovation was just 0.67% through March 3, compared with 10.42% for the S&P 500.
The fund’s performance also doesn’t come close to Wood’s goal for annualized returns of 15% over five-year periods.
Still, Ark Innovation enjoyed a net investment inflow of $14 million during the past five days, and $538 million over the last year, according to ETF research firm VettaFi.
What Draws Investors to Wood
You might wonder why so many investors have stuck with Wood. The fact that she had one spectacular year certainly helps. Ark Innovation skyrocketed 153% in 2020.
Also, Wood has become something of a rock star in the investment world, appearing frequently in the media. She explains financial concepts in ways that novice investors can understand.
Wood does have her detractors. Morningstar analyst Robby Greengold issued a scathing critique of Ark Innovation last year.
“ARKK shows few signs of improving its risk management or ability to successfully navigate the challenging territory it explores,” he wrote.
Wood, of course, begged to differ. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said in an interview with Magnifi Media by Tifin.
