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Ark Investment Management founder and CEO Katie Wood said she was not worried about the recent decline in her funds and that the bull market was simply expanding to include more value-added strategies.
The hot investor added that over time, its destructive strategy will pay off.
“Currently, the market is expanding and we believe that at the core of this, the bull market is strengthening and this will play in our favor in the long run,”
Wood manages five ETFs focused on “destructive innovation” that have grossed more than $ 15 billion in investor money this year alone. Ark’s flagship fund, Ark Innovation, returned nearly 150 percent in 2020 as the pandemic accelerated innovation and now has more than $ 17 billion in net assets. However, the ARKK is down about 8% this year amid a recent weakness in technology stocks, driven by rising interest rates.
Wood said Ark Invest was shocked that the market had never had prices of 0.5%, 1% or 1.5% return on the 10-year US Treasury.
“We think the rate of rise in interest rates scares people. It’s become very comfortable in a low-interest environment: nothing much changes, the Fed has a back, and so on,” Wood said.
Wood added that this type of concession happened to Ark in the fourth quarter of 2016, when President Donald Trump was elected and promised to cut tax rates. During this period, Ark’s strategies became negative.
“The bull market was expanding to include valuable or more cyclical sectors, and I thought that would be very good news for our longer-term strategies. The worst thing that could happen to us, what other technological and telecommunications. a bubble where the market is shrinking so only a few groups have won, ”Wood said.
Staying on course, Wood accepted the recent technological weakness as an opportunity to buy a dip in some of his best ETF funds. Wood has made large purchases of Tesla, Teladoc, Zoom Video and Palantir. Ark Innovation also gained shares in Square, Roku, Zillow and Shopify recently.