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Cathie Wood Watch: Ark Dumps Pfizer, Buys Tesla

Wood's flagship Ark Innovation ETF has sunk 53% so far this year, as her technology companies have hit the skids.
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Celebrity investor Cathie Wood, chief executive of Ark Investment Management, sold shares of a major pharmaceutical company and traded in some of her usual names June 8.

All the valuations below are as of June 8's close.

The pharma company is Pfizer  (PFE) - Get Pfizer Inc. Report, which doesn’t match the young, “disruptive” technology companies that make up the bulk of Wood’s portfolio.

In any case, Ark Genomic Revolution ETF  (ARKG) - Get ARK Genomic Revolution ETF Report, unloaded 152,823 shares of the drug giant, valued at $8.2 million. The stock has dipped 9% so far this year.

Ark funds also dumped 192,948 shares of audio streaming service Spotify Technology  (SPOT) - Get Spotify Technology S.A. Report, valued at $22.4 million. The stock has plunged 52% year to date.

On the buying side, Ark Genomic snagged 172,939 shares of Moderna  (MRNA) - Get Moderna Inc. Report, a biotechnology company that makes a covid vaccine, valued at $25.7 million. The stock has dropped 40% so far this year.

Ark funds snatched 318,713 shares of robotic software company UiPath  (PATH) - Get UiPath Inc. Class A Report, valued at $6.8 million. The stock has lost 51% so far this year.

Ark funds snapped up 232,607 shares of Unity Software  (U) - Get Unity Software Inc. Report, a video game software company, valued at $10.7 million. The stock has cratered 68% year to date.

Ark Next Generation Internet  (ARKW) - Get ARK Next Generation Internet ETF Report bought 1,358 shares of electric vehicle titan Tesla  (TSLA) - Get Tesla Inc. Report, valued at $985,365. Wood has been loading up on Tesla in recent sessions, after selling for several months, in what she called profit-taking. The stock has shed 37% year to date.

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Cathy Wood Has a Loyal Following

Wood has developed a cult-like following among retail investors. And apparently many of them aren’t too worried about the underperformance of her funds—at least her flagship, Ark Innovation ETF  (ARKK) - Get ARK Innovation ETF Report.

Ark’s roster of nine exchange-traded funds saw assets decrease by 48% so far this year through June 1, to $15.3 billion, according to Bloomberg. That’s the largest drop among the biggest 25 U.S. ETF issuers.

But the asset shrinkage stems largely from fund performance. The Ark funds as a whole have net inflow of $167 million so far this year.

To be sure more than 100% of that total comes from Ark Innovation. It enjoyed a net inflow of $1.28 billion in the six months through June 7, according to VettaFi, an ETF research firm.

That means the other funds likely had a combined outflow of more than $1 billion. In any case, in Ark Innovation at least, Wood, whose fans have taken to calling her Mamma Cathie, hasn’t lost her following.

Ark Is Trailing the S&P 500

As Ark Innovation and the other Wood funds have tumbled in recent months, she has defended herself by noting that she has a five-year investment horizon.

And the five-year track record of Ark Innovation could indeed give investors comfort until May 9. The fund’s five-year return beat that of the S&P 500 until then. But the five-year annualized return of Ark Innovation totaled 10.79% through June 8, far behind the S&P 500’s 13.09% return.

Ark Innovation has sunk 53% so far this year, as Wood’s tech companies have hit the skids. And it’s down 72% from its February 2021 peak. Raging inflation and soaring interest rates have helped put the kibosh on tech stocks.

“Most [fund managers] would probably collapse if they had the same performance, but Cathie and Ark have a strong following,” Bloomberg Intelligence ETF analyst Athanasios Psarofagis told his company’s news service.

But if Ark Innovation keeps dropping in value, it will be interesting to see how long the Mamma Cathie worshippers stick around.