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Wood, whose ARK Innovation ETF outperformed all other U.S.
equity funds during the pandemic rally in 2020, said slowing
economic growth will likely benefit the type of innovative
companies that the fund invests in.
"There are a lot of indicators to us that we are in a bit of a
bear market” because of the Fed's expected plan to increase
rates by 50 basis points at its June and July meetings, Wood
said. "The markets are speaking pretty loudly right now and seem
to be calling into question the Fed’s strategy."
The benchmark S&P 500 is down approximately 16% for the year to
date, near the 20% decline that typically signifies a bear
market.
At the same time, "innovative" companies are being subject to
"incredible" shorting activity, Wood suggested, pushing stock
prices lower.
"If we are right, then shorts will be forced to cover and we are
certainly looking forward to that time," Wood said.
The $7.9 billion ARK Innovation Fund, which gained 2% in Tuesday
trading, is down 57.6% for the year to date. Overall, the fund
is now down nearly 75% from its record high in February 2021,
and close to the low of $34.69 it touched in March 2020 at the
start of the coronavirus pandemic.
The fund added a position in General Motors Co, largely due to
signs it is "serious" about its move into electric vehicles, the
company said during the webinar Tuesday. Tesla Inc remains its
largest overall position.
Despite its losses, ARK Innovation continues to draw the
interest of investors. The fund has received positive inflows on
net over the last 4 weeks, including $455.7 million in net
inflows the week that ended May 4, according to Lipper data.
(Reporting by David Randall)
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