Cathie Wood’s ARKK lost 25% in January: what’s next?

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Cathie Wood’s ARK Innovation ETF is down 25% for January, but the billionaire investor says the long-term view of the fund remains positive, reported the Wall Street Journal on Monday.

ARKK received $168 million in funding

According to Wood, the ongoing sell-off in her high-risk stocks have made them promising for a large number of investors. Escalating interest in these equities, she’s convinced, will result in an eventual increase in the stock price.

After correcting for nearly 11 months, innovation stocks seem to have entered deep value territory, their valuations a fraction of peak levels.

ARKK received roughly $168 million in funding last week, confirms data from FactSet, suggesting investors are now returning to capitalize on an opportunity to buy Wood’s stocks at deep discounts.

ARKK now has $11.8 billion in net assets versus $28 billion in the first quarter of 2021.

What’s driving the sell-off in Wood’s stocks?

The benchmark S&P 500 index slid 7.0% in January on fears the U.S. Federal Reserve will raise rates more than four times this year to tackle inflation. Some are even calling for as many as seven rate hikes in 2022.

Worst hit have been the shares of technology and biotech firms that generate little to no profit, yet carry high valuations – the kind of companies Ms Wood’s Ark favours.

Some of her stocks, including notable names like Zoom, Block, Spotify, and Roku, are now down over 50% from their recent highs, making up for a strong case that a rebound could be in the offing.

Last week, Wood dumbed Twitter to load up on Coinbase Global Inc amidst the sell-off in cryptocurrencies.

The post Cathie Wood’s ARKK lost 25% in January: what’s next? appeared first on Invezz.

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