Ark's Cathie Wood Continues to Stumble

Soaring interest rates and weak economic growth have dented Wood’s young, 'disruptive' technology companies.
Five-Year Underperformance
The five-year annualized return of Ark Innovation totaled a paltry 1.07% through Oct. 14, far behind the S&P 500’s 8.93% return, according to Morningstar.
Despite that underperformance, the $6.7 billion fund enjoyed a net inflow of $1.27 billion year to date through Oct. 13, according to VettaFi, an ETF research firm. Clearly many investors are loyal to Mama Cathie, as some fans call her.
But the tide may be starting to turn. Over the five days through Oct. 13, Ark Innovation suffered a $204 million outflow.
Investor Loyalty
You might wonder why so many investors have stuck with Wood, despite her mediocre returns. The fact that she had one spectacular year certainly helps. Ark Innovation ETF skyrocketed 153% in 2020.
Also, Wood has become something of a rock star in the investment world. She has appeared frequently in the media over the last couple years. She is clearly intelligent and articulate, explaining financial concepts in ways that novice investors can understand.
If Wood’s investment performance rebounds, her true believers will say, “I told you so.” If it doesn’t, it will be interesting to see how long investors are willing to stick with her.
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