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Cathie Wood's Ark ETFs Continue to Lose Ground

The flagship Ark Innovation ETF’s share-price gain isn’t much ahead of the S&P 500’s gain for the past two years -- 43% to 38%.
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Cathie Wood’s Ark Investment Management exchange-traded funds continue to fall, as investors sour on speculative technology stocks.

Wood’s flagship Ark Innovation ETF  (ARKK) - Get ARK Innovation ETF Report attracted raves when it more than doubled (up 157%) in 2020. But it then fell 23% in 2021 and has slid 19% year to date.

Over the past two years, Ark Innovation’s share-price gain isn’t much ahead of the S&P 500’s gain -- 43% to 38%. Ark Innovation has eased 0.27% Wednesday to $76.70.

Rising interest rates have hit technology stocks hard in recent days, and most of Ark’s “disruptors,” as Wood likes to call them, haven’t been spared.

To be sure, Ark Innovation’s No. 1 holding, Tesla  (TSLA) - Get Tesla Inc Report, has gained 16% over the past three months, but that’s an exception. 

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No. 2 holding Zoom Video (ZM) - Get Zoom Video Communications, Inc. Class A Report has given up 42% during that period, No. 3 Teladoc Health  (TDOC) - Get Teladoc Health, Inc. Report dropped 44%, and No. 4 Roku  (ROKU) - Get Roku, Inc. Class A Report shed 51%.

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Wood remains undaunted. “Sometimes the market can remain irrational and I’ll say what’s going on right now is irrational,” she said in a video posted on Ark’s website last week.

And on Wednesday she tweeted, “The disconnect between valuations for innovative companies in the public vs. private markets is as wide as I ever have seen. The arbitrage opportunity is enormous.” She presumably means that prices for her tech stocks are at attractive levels.

Wood appears not to have lost her grip on investors. While Ark Innovation’s assets have dropped to $12.8 billion from a high of $28 billion last February, nearly all that stems from the fund’s decline in value rather than outflows, Bloomberg reports.