ARK Invest’s chief has stood by the fund’s poor recent performance as investors flee to benchmarks and anti-innovation funds.
Cathie Wood, chief executive officer of ARK Invest, has presided over a steep drop in the group’s ARK Innovation ETF (ARKK), which prioritises innovative technologies like gene editing, electric vehicles and artificial intelligence.
She told CNBC the current flight from innovation and towards benchmarks among investors represented “a massive misallocation of capital”.
“Benchmarks are where they are because of past successes. If we are right, those are the companies that will be disrupted,” said Wood.
The ARKK fund focuses on emerging technology, with Tesla Inc (NASDAQ:TSLA), Teladoc (NYSE:TDOC), Roku Inc (NASDAQ:ROKU) and Zoom Technologies Inc (NASDAQ:ZOOM) among the largest holdings in the fund.
ARKK is down 23.38% year to date (YTD), having previously risen more than 300% between March 2020 and February 2021.
Wood criticised those betting against the ARK Innovation ETF as “ridiculous”, in reference to the SARK ETF, which invests in the inverse of ARKK and has grown 20.49% YTD.
Technology and innovation stocks are in the midst of a bear market against the threat of monetary tightening, following bumper growth in 2020 and 2021.
The NASDAQ Composite 100 Index, a popular tech-based fund, is down 12.33% YTD.
The ARKK fund fell 6.44% by close yesterday prior to Wood’s comments. The fund was flat in after-hours trading.