Cathie Wood 'sArk Innovation ETF has outperformed theS&P 500 over the past few weeks after a terrible start to 2022.- Bond yields have fallen in that timespan, while some investors believe tech stocks are due to rebound.
Cathie Wood's flagship $4 exchange-traded fund has staged a fightback of sorts in recent weeks after a dreadful start to 2022.
The ETF, which trades under the ticker
Still, ARKK is down 55.4% year-to-date despite its moderate resurgence, and closed at $43.16 on Friday.
Wood's funds have suffered thanks in part to the Federal Reserve's aggressive plan for interest-rate hikes, which has disproportionately hurt growth and tech stocks by slowing down their cash flows.
The ARKK fund invests in disruptive technology, prioritizing companies' long-term growth prospects. Its top three holdings — in electric-vehicle maker $4, video platform $4 and streaming hardware maker $4 — are respectively down 34.3%, 42.6%, and 63.1% in 2022 so far.
Rather than changing her investing strategies, Wood has kept buying those old favorites over the past month. The
Crypto stocks $4 and $4, which are ARKK's fourth- and ninth-largest holdings, have also risen 17% and 26% since May 11. That was the day $4, prompting investors to $4 such as tech stocks.
"Almost immediately after breaking through the 'official' bear-market marker of a 20% decline from their peak, stocks rallied as bargain-hunters emerged," $4's chief US market strategist Dave Sekera said. "The growth category is now the most undervalued, trading at a 19% discount to our fair value."
ARKK's rally has also coincided with a slide in bond yields. $4 currently offer yields of around 2.955%, down from 3.124% on May 6. That's left investors looking to other assets as a source of returns.