Cathie Wood, known for her successful bets on companies like Tesla, Zoom, and Roku during the pandemic, is now facing challenges as these same investments are causing her Ark funds to decline. Investors have withdrawn billions of dollars in protest, with $2.2 billion pulled from six actively managed ETFs by Ark Investment Management since January. This is a significant increase from the $760 million withdrawn last year, leading to a 30% decrease in assets invested in the six ETFs to $11.1 billion.
Wood’s popularity has been a key factor in attracting investors to Ark, as she gained celebrity status through media appearances and social media engagement. However, Morningstar analyst Robby Greengold believes that Wood’s reliance on her instincts to construct the portfolio is a liability. Some of Wood’s major stock picks, such as Tesla, Zoom, and Roku, have seen significant declines this year despite overall market gains.
Wood defended her decision to sell off holdings in chipmaker Nvidia before a rally that saw its shares soar, citing increased competition and the need for a readjustment. Despite these challenges, Coinbase has been a bright spot for Ark, with shares of the crypto exchange rising about 47% since January.
Overall, Morningstar estimates that Ark Invest has destroyed over $14 billion in investor wealth in the decade since its first funds launched, making it the worst-performing asset manager in that period. Ark Invest claims a 109% return on its flagship fund since 2014 as evidence of its strong value creation.
Despite these setbacks, Ark’s flagship fund is down about 12% year-to-date, closing at $43.90 as of Wednesday afternoon. This story was originally featured on Fortune.com.