Cathie Wood, head of Ark Investment Management, frequently adjusts her positions, adding to a holding when the stock falls and selling when it rises.
She seems to have done that in February with a well-known technology stock.
Wood’s flagship fund, the Ark Innovation ETF (ARKK) , underperformed the market in 2024.
While it briefly outperformed the S&P 500 and Nasdaq Composite in January and early February, ARKK is down 3.4% year-to-date as of Feb. 28, compared to a 1.2% gain for the S&P 500 and a 2.4% decline for the Nasdaq Composite.
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Opinions on Wood are divided. Supporters see her as a visionary, especially after an impressive 153% return in 2020. However, her longer-term performance has raised doubts about her aggressive approach.
As of Feb. 28, Ark Innovation ETF, with $6.8 billion under management, has delivered an annualized three-year return of negative 7.57% and a five-year return of 1.54%.
In comparison, the S&P 500 index has a three-year annualized return of 12.55% and a five-year return of 16.85 %.
Cathie Wood’s investment strategy explained
Wood’s investment strategy is straightforward: Her Ark ETFs typically buy shares in emerging high-tech companies in fields such as artificial intelligence, blockchain, biomedical technology and robotics.
Wood says these companies have the potential to reshape industries, but their volatility leads to major fluctuations in Ark funds’ values.
Related: Cathie Wood’s net worth: The Ark Invest CEO’s wealth & income
Morningstar’s analyst Amy Arnott calculated last year that Ark Innovation ETF destroyed $7.1 billion of shareholder wealth from its 2014 inception through 2023. That put the ETF as No. 3 on her wealth destruction list for mutual funds and ETFs during that period.
The analyst has not updated the list for 2024 yet.
Wood recently expressed optimism about a shift to looser regulation under Trump’s presidency.
“What the new administration is doing is changing fear with optimism,” Wood told Bloomberg in January. It’s “highly underestimated how important deregulation is going to be to unleashing animal spirits. We are pretty excited about this.”
Not all investors share Wood’s confidence. Data from ETF research firm VettaFi shows that the Ark Innovation ETF has faced $2.5 billion in net outflows over the past 12 months through Feb.28.
Cathie Wood sold $6 million of SoFi
On Feb. 25, Wood’s Ark Innovation ETF sold 430,483 shares of SoFi Technologies (SOFI) .
That chunk of stock was valued at roughly $6 million.
Before this sale, Wood made two more transactions in February, selling 232,032 SoFi shares worth $3.4 million on Feb. 11 and 12.
Related: Billionaire Bill Ackman buys $2.3 billion of beat-down tech stock
SoFi initially focused on student loan refinancing but has expanded into three segments: lending (including student, personal, and home loans), financial services, and a technology platform for fintech solutions.
The California-based fintech company climbed 55% in 2024, outperforming other fintech stocks such as PayPal (PYPL) (up 39%) and Affirm (AFRM) (up 24%).
Most of that surge came in October and November.
On October 14, the company announced a $2 billion loan platform business agreement for personal loans, with funds managed by affiliates of Fortress Investment Group.
“The agreement will expand SoFi’s capabilities in its loan-platform business,” the company said in a news release.
Keefe, Bruyette & Woods analysts Timothy Switzer and Emily Lee said they “view the announcement positively as it potentially demonstrates improving investor demand for SOFI’s paper,” Barron’s reported.
In November, Trump’s victory in the presidential election led to investor optimism about a potentially less restrictive regulatory environment for financial services.
According to Ark Investment’s 13f filing, Wood’s Ark funds unloaded 3.2 million shares of SoFi in the fourth quarter of 2024.
Fund manager buys and sells:
- Billionaire Stanley Druckenmiller exits 2 tech giants
- Warren Buffett raises eyebrows with new beverage stock pick
- Cathie Wood buys $37 million of surging tech stock
SoFi now makes up a small stake in Wood’s portfolio. According to stockanalysis.com, it accounts for 1.17% of ARKK and ranks 29th as of Feb. 28.
Despite last year’s strong rally, SoFi stock is down nearly 9% year-to-date. It closed at $14.47 on Feb. 28.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
