Dusseldorf Cathie Wood defies market sentiment. While other investors sold their tech shares on a large scale in January, the head of the investment house Ark bought more. In January, she acquired tech stocks worth almost $700 million for her flagship fund ARKK, according to Handelsblatt calculations.
In total, she added 27 of her 43 positions. Particularly clear with the TV streaming service Roko ($ 94 million), the payment service Block (formerly known as Square) ($ 78 million) and the pharmaceutical company Intellia Therapeutics ($ 63 million).
In total, by number of shares, Wood bought Ginkgo Bioworks. She bought 7.5 million from the biotech company. There were 2.6 million titles for the trading app Robinhood and 1.4 million for the software provider Palantir.
The 66-year-old US investor is thus bucking the market trend. The US tech index Nasdaq Composite lost 9 percent in January. Wood’s ARKK exchange-traded fund, which invests exclusively in disruptive technologies, fell more than 20 percent. All of their individual titles fell more than the market. Since its record high last February, the ARKK has even lost more than 50 percent in value.
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The trigger for this is the change in monetary policy by the US Federal Reserve, from whose expansive monetary policy many tech stocks had benefited. But now the Fed will raise interest rates and withdraw liquidity from the market. This particularly affects growth stocks from the tech industry, for which the refinancing costs are increasing and the profits expected in the future are falling in value.
“Innovation has never been so cheap”
However, Wood sees an opportunity in this development. “Innovation has never been so cheap,” she explained last week. She points to a slew of advances in areas like artificial intelligence (AI), battery technology, blockchain and robotics that would turn the old world on its head and “generate significant returns in the stock market” in the years to come.
And so she increases her positions in her recently sold-out titles. At the end of the month, for example, she bought e-car maker Tesla and trading app Robinhood for $47 million and $28 million, respectively.
However, Wood isn’t adding to all positions. She completely eliminated her $230 million position at software company Docusign. After sales worth almost 20 million, the specialist for 3D printing 3D Systems only accounts for 0.01 percent in their depot. The same applies to the biotech company Iovance Biotherapeutics, in which she parted with shares worth 69 million dollars.
Similar to Wood – who believes that the tech correction is a buying opportunity – many investors are obviously assessing the situation. More than $400 million in fresh capital flowed into ARKK between Jan. 18 and 27, according to Bloomberg data, after almost $600 million had been withdrawn in the first two weeks of January.
More: Changing of the guard among star investors: Warren Buffett overtakes Cathie Wood