If there’s an award for the best investor of the year, then Cathie Wood would have won it last year. Ark Invest performed impressively in 2020 with its exchange-traded funds (ETFs) soaring higher thanks to aggressive investments in growth companies, such as EV titan Tesla.
Judging by yesterday’s news, she doesn’t plan to stop implementing her strategy anytime soon, and “why would she?” one may ask, as her flagship fund finished over 150% higher in 2020. Her style is characterized by large investments into momentum and high-growth stocks.
It is reported that Cathie Wood increased its stake in EV company Tesla by a further $124 million yesterday. Tesla stock price fell sharply to $620 before rotating higher in a rapid manner to close the day at $698.84. Moreover, Tesla stock is trading over 3% higher pre-market to push the price action above $720.
ARK Innovation ETF, Cathie Wood’s flagship fund with a business valuation of $26.6 billion, fell sharply yesterday. This doesn’t come as a surprise as ARK Innovation ETF holds a stake of about $2.6 billion in Tesla.
“We love the liquidity that this provides us, we think it’s very healthy, a very healthy shakeout. All I know is we are keeping our eyes on the prize and the prize just got a little bit more interesting,” Wood told Bloomberg Radio yesterday.
“Corrections are good, they keep us all humble. The strongest bull markets I’ve been in are built on walls of worry,” she added.
Yesterday’s trading session was marked by volatile trading after NASDAQ dipped over 3% early in the morning before racing higher to pare back losses. Investors are concerned that the rising bond yields will lead toward a correction in equities amid stretched valuations.
ARK Innovation ETF (ARKK) has seen a record of $4.96 billion worth of shares changing hands in total yesterday. It appears that three ETFs managed by Cathie Wood invested in Tesla stock yesterday.
The biggest fund, ARK Innovation ETF, closed the day 3.3% lower after trading as much as 11.8% in the red earlier in the trading session.
ETFs managed by Cathie Wood used yesterday’s dip in Tesla stock price to increase their exposure to Elon Musk’s EV giant.
About the Author
An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.