Ark Invest founder Cathie Wood is one of the best-known investors thanks to the incredible performance of their ARK Innovation exchange-traded fund (ETF) between 2020 and 2021.
Bold statements on the future of the economy and industries that will be shaped by disruptive innovation have built her a large loyal following.
The ARK Innovation ETF increased from $40 in March 2020 to $157 in January 2021, which helped to make her the face of the fourth industrial revolution investing sector.
However, her fund has since given back those gains as the most hyped stocks in her portfolio, which had lofty valuations, plummeted.
From early February 2021, the ARK Innovation ETF has declined by 75%. It has not deterred Wood or her followers.
Despite the sharp decline, the ARK Innovation ETF has still been experiencing net fund inflows in 2022.
Wood continues to back her stance on disruptive innovation, stating that the innovation market cap will grow from $7 trillion to $210 trillion by 2030.
Only time will tell whether she was right or whether these stocks were simply easy to hype up, similar to what happened during the dot-com bubble.
ARK has reacted to the market turmoil this year by concentrating its portfolios on its highest conviction stocks, adding to positions like Tesla, Zoom, and Roku.
There were some changes. The flagship ARK Innovation ETF has reduced its holdings from 57 to 34 stocks.
Tesla remains their biggest holding and has been the largest contributor to the fund’s growth and fame.
The ETF is heavily concentrated towards medical research, with 19 out of the 40 largest holdings being pharmaceutical or bio-science research companies.
ARK has also turned its attention to innovation in emerging markets, including South Africa. Discovery currently makes up a small position of 0.2% of ARK Investment Management’s portfolio.
Contrary to Wood’s style of stock picking, the fund holds two very small short positions through puts on Intel and the Energy Select Sector SPDR Fund.
It opened new positions in Alleima, XPeng, SomaLogic, ALD Advanced Logistics, Compass Pathways, Moderna, Guardant Health, Z Holdings, Michelin, and Airbus.
ARK significantly reduced its positions in Signify Health, Stratasys, Sea, and Spotify.
The table below details ARK Investment Management’s 40 biggest holdings across its entire range of funds, which make up more than 80% of its portfolio, as of 30 September 2022.
|Name||Value ($ million)||Portfolio Weight|
|Zoom Video Communications||$801||5.6%|
|Exact Sciences Corp||$571||4.0%|
|CRISPR Therapeutics AG||$538||3.8%|
|Pacific Biosciences of California||$167||1.2%|
|Kratos Defense & Security Solutions||$83||0.6%|
|Grayscale Bitcoin Trust BTC||$74||0.5%|