Skip to main content

Cathie Wood Watch: Ark Buys Tesla, Coinbase, Roku

Wood's flagship Ark Innovation ETF has slid 61% over the past year and 79% from its February 2021 peak.
  • Author:
  • Publish date:

Famed investor Cathie Wood, chief executive of Ark Investment Management, continued to load up on favorites Tesla  (TSLA) - Get Free Report and Coinbase  (COIN) - Get Free Report Jan. 10.

Tesla, of course, is the dominant electric vehicle maker in the U.S. And Coinbase is the country’s biggest cryptocurrency exchange

Ark also snatched shares of another Wood favorite, streaming platform Roku  (ROKU) - Get Free Report. That may be Ark’s first Roku trade in months.

Ark funds bought 100,982 shares of Tesla Jan. 10, valued at $12 million as of that day’s close.

Tesla has plunged 65% during the last year amid worries about production and demand issues. Investors also aren’t thrilled with Chief Executive Elon Musk’s preoccupation with his newly-bought Twitter.

Tesla is the No. 3 holding in Wood’s flagship Ark Innovation ETF  (ARKK) - Get Free Report, behind No. 1 Exact Sciences and Zoom Video Communications.

Ark Innovation purchased 33,756 shares of Coinbase, valued at $1.5 million as of the Jan. 10 close. Coinbase has plummeted 82% over the last year amid turmoil in the cryptocurrency industry. Coinbase is Ark Innovation’s 12th biggest holding.

Ark Fintech Innovation ETF  (ARKF) - Get Free Report snapped up 33,185 shares of Roku Jan. 10, valued at $1.6 million as of the close that day. The company has dropped 74% in the last year amid intense competition in the streaming industry. Roku is the No. 4 holding in flagship Ark Innovation.

Wood’s Returns Tumble

Meanwhile, Wood’s investment performance hasn’t exactly overwhelmed the investment world over the past year, as her young technology stocks have slumped. Ark Innovation ETF has slid 61% over the past year and 79% from its February 2021 peak.

Wood has defended her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of Ark Innovation was negative 1.9% through Jan. 10, compared with the S&P 500’s positive return of 9.3%.

The fund’s performance also doesn’t come close to Wood’s goal for annualized returns of 15% over five-year periods.

Ark Innovation’s subpar returns may finally be starting to push investors away. The $6.4 billion fund registered a net investment outflow of $288 million in the past month, according to ETF research firm VettaFi. But it still notched a $1.39 billion inflow over the past year.

What Draws Investors to Wood

You might wonder why so many investors have stuck with Wood. The fact that she had one spectacular year certainly helps. Ark Innovation skyrocketed 153% in 2020.

Also, Wood has become something of a rock star in the investment world, appearing frequently in the media. She explains financial concepts in ways that novice investors can understand.

Wood does have her detractors. Morningstar analyst Robby Greengold issued a scathing critique of Ark Innovation last year.

“ARKK shows few signs of improving its risk management or ability to successfully navigate the challenging territory it explores,” he wrote.

Wood, of course, begged to differ. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said in an interview with Magnifi Media by Tifin.