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Cathie Wood’s Ark Innovation ETF Faces Criticism Amid Trades

Cathie Wood, the CEO of Ark Investment Management, recently made trades in her funds. Despite a strong 153% return in 2020, her Ark Innovation ETF (ARKK) has fallen behind the Nasdaq Composite index with only a 25% return in the past 12 months.

The ETF has seen a negative 24% annualized return over three years and just a 3% return over five years, missing Wood’s goal of 15% annual returns. Wood’s strategy involves high-risk investments in young, small-company stocks in areas like AI, blockchain, DNA sequencing, energy storage, and robotics. However, Morningstar has expressed doubts about Ark Innovation’s ability to navigate the challenging market.

The focus on volatile stocks with uncertain futures has led to mediocre total returns and extreme volatility since the fund’s inception in 2014. Despite this, Wood has made significant trades, buying shares in Meta Platforms and Amgen while selling positions in Pfizer and Coinbase Global. Ark Innovation also experienced a net outflow of $1.3 billion during its recent 12-month rally.

Wood’s dynamic approach to trading raises questions about her fund’s ability to consistently deliver returns. Investors will be watching closely to see how Ark Innovation performs in the future.

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