In November, she acquired a total of $172 million worth of stocks with the Ark Innovation ETF.
(Photo: Bloomberg)
Frankfurt The prospect of slower interest rate hikes is driving the price of prominent tech investor Cathie Wood’s flagship fund. The Ark Innovation ETF (ARKK) rose by almost eight percent on Wednesday and continued to rise on Thursday at the start of trading in the USA. For Wood, the recovery comes at the right time: The ARKK has lost almost two-thirds of its value at its peak this year.
The 67-year-old investor relies exclusively on companies that develop disruptive technologies. Since these corporations’ profits are still in the future, their stocks are particularly penalized when interest rates rise. As a result, companies’ refinancing costs become more expensive, and the profits expected in the future are discounted with the higher interest rate. So they are worth less.
The market is now hoping that most of the rate hikes have already been priced in. Growth stocks are bouncing back as a result – and Cathie Wood is buying at lower valuations.
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