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Top line
Arch Invest, led by celebrity investor Cathy Wood, bought about $41.9 million in tech stocks during Tuesday’s market slump, doubling its biggest bets in the market’s decline.
Kathy Wood spoke at the Milken Institute Global Conference in May.
Key facts
Ark said in its daily trading report that it bought 250,537 shares of streamer Roku for $17 million and 208,535 shares of video communications company Zoom for $16.4 million, based on Tuesday’s closing price.
Roku and Zoom now account for 7.2% and 7.9% of the fund, respectively, although the company’s shares are each down more than 55% year-to-date, contributing to the tech-focused fund’s subpar performance in 2022.
In addition to the Innovation EFF and other funds, Arch bought 15,115 shares of chip maker Nvidia for $2 million, 148,434 shares of sports betting giant DraftKings for $2.6 million and 54,299 shares of communications platform Twilio for $3.8 million.
Wood ended up spending $24.1 million in mostly healthcare stocks, including $5.3 million in biotechnology firm Verve Therapeutics.
To fund the acquisitions, Arch sold $45 million of Signify Health stock and $900,000 in other smaller positions.
Key background
The Ark Innovation ETF fell 6.8% in Tuesday trading, outperforming the S&P 500 and a 5.2% drop in the tech-heavy Nasdaq composite, which outpaced a 4.3% drop as investors braced for how the Federal Reserve will respond to Tuesday’s inflation data. While it outperformed the market in the first few days of the pandemic in 2020, timber funds have struggled mightily in 2022 as tech stocks ride the market’s decline. The Ark Innovation ETF is down 55% year-to-date, compared to a 17.5% decline for the S&P. The rise was largely due to Wood’s early investment in Tesla, which remains the fund’s top holding, although Wood has sold some of its positions.
Important quote
Wood said Tuesday that the Fed is “overdoing it” with its hawkish monetary policy, adding that continued rate hikes “show a mistake.” He warned earlier Concern about deflation. The Fed has raised rates three times this year and another increase is expected later this month, which some analysts say could be as much as 100 basis points.
An amazing fact
In the year Between June 2021 and June 2022, Wood’s net worth dropped 65% to $140 million as her finances plummeted. Forbes“Speculations.
Further reading
Arch Invest CEO Kathy Wood’s net worth will drop by 65% ​​as a tech bet by 2022.Forbes)
‘Give us five years’: Kathy Wood defends struggling tech stocks as flagship fund creators (Forbes)
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