Cathie Wood Goes on Dip-Buying on Tech Spree as ARKK Hits 2024 Lows

(Bloomberg) -- Cathie Wood scooped up shares of tech firms caught in crushing market rout, just as her flagship fund sank to a new 2024 low. 

Wood’s ARK Innovation ETF (ticker ARKK) bought Amazon.com Inc., Advanced Micro Devices Inc. and Roku Inc., among others, stepping in amid a broad downdraft that spurred steep losses for many tech stocks. A fintech-focused fund of her firm Ark Investment Management also added Reddit Inc. and Meta Platforms Inc., according to tabulations put out by the firm on a daily basis.

The purchases happened at the start of the week, when global markets convulsed after weaker-than-expected US employment data fanned fears that the economy may be on the brink of a bigger downturn. Tech shares — which had powered the market in recent months — bore much of the pain, though most of the sector is still holding on to healthy gains for the year. 

Not so Wood’s ARKK. The actively-managed fund, which was already nursing losses for the year as the week began, has continued its slide, closing Wednesday at the lowest levels since November. It’s down more than 20% this year and has seen some 75% of its value wiped out from its peak in early 2021.

“The past few years, really, have been a challenge” for ARKK, said Todd Sohn, an ETF strategist at Strategas. Regarding this week’s purchases, “Ark has a history of high-conviction, concentrated investing via their ETFs — there’s a tendency for the team to use sharp market selloffs as an opportunity to add long exposure to their strongest ideas,” he said.

Wood gained a following among retail investors in 2020 when her ARKK fund rose 150% amid a stellar year for tech shares. Despite a checkered record in the years that followed, including losses in 2021 and 2022, investors remained steadfast for a while, plowing cash into the ETF month after month. But that fervor is dissipating.

Investors pulled $2.2 billion from ARKK so far in 2024 as off Tuesday’s close, putting the fund on pace for its worst year of outflows since its 2014 inception. All in all, the seven active funds across her ETF lineup have collectively seen $11.5 billion in outflows since early 2021, according to data compiled by Sohn at Strategas.

A representative for Ark didn’t immediately comment.

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