Has Cathy Wood’s famous strategy been the victim of a crash in tech stocks?

The huge earnings that transformed Cathy Wood into one of the world’s best-known proponents of active fund management are quickly fading, with some of his favorite stocks faltering.

After years of market assaults and just days after Wood criticized negative investments, Wood’s groundbreaking ETF ARK Innovation has given up on its previous outperformance over the S&P 500.

According to a Bloomberg analysis, Wood’s strategy of selecting stocks involved in so-called “disruptive innovation” has been a victim of the plunge in tech stocks as investors shy away from high-priced fast growth stocks. In an environment of high-interest rates and inflation.

Shares of the ARK Innovation ETF fell nearly 10% on Monday, as the S&P 500 index fell 3.2%, meaning the fund’s total return since its inception in 2014 has fallen to around 122%, according to data collected by Bloomberg. in the United States total returns of about 128% over the same period.

The shift in sentiment towards tech stocks unleashed a storm on ARK Investment Management’s Cathy Wood as interest rates in Rising weigh on stock valuations, while concerns about economic growth dampen speculative enthusiasm, putting in danger, in particular, the shares of companies that bet on new technologies.

Shares of the ARK Innovation ETF are down more than 70% from last year’s peak.

On the contrary, Wood enjoys considerable investor loyalty. Despite a more than 50% decline in 2022, the ARK Innovation ETF recorded net inflows for the quest year. Data showed it added another $41 million on Friday.

The ARK Innovation ETF was up about 2.8% at the start of trading in New York, thanks to the recent trip to the stock’s downside.

Meanwhile, not all Wood’s funds have given up on their outperformance. The smaller ARK Next Generation Internet ETF has outperformed the S&P 500 Index since its inception, even after stumbling from all-time highs, according to data compiled by Bloomberg.

Cathy Wood remains committed to the tech sector despite recent losses. In her latest tweets, she indicated that the global economy was undergoing the greatest technological transformation in history and talked about the capabilities of Zoom Video Communications and Microsoft.

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