One of Cathie Wood’s signature moves is buying stocks when they pull back, looking for names she believes will recover over time.
The CEO of Ark Investment Management followed that playbook again in the past week, picking up a tech stock that dropped 16.3% over the last five trading days.
Wood’s investment strategy has worked well this year, with her funds outpacing the major market indexes. As of Nov. 7, the flagship Ark Innovation ETF (ARKK) is up about 40% year-to-date, far outpacing the S&P 500’s gain of 14.2%.
Wood gained a strong reputation after the Ark Innovation ETF delivered a 153% return in 2020. The same style that produces big wins in a rising market can also bring heavy losses, as it did in 2022, when the fund fell more than 60%.
Those swings have weighed on her long-term results. As of Nov. 6, the Ark Innovation ETF has delivered a five-year annualized return of -4.07%, while the S&P 500 has an annualized return of 15.57% over the same period, according to data from Morningstar.
Cathie Wood’s investment strategy explained
Wood’s investment strategy is straightforward: Her Ark ETFs typically target emerging high-tech companies in fields such as artificial intelligence, blockchain, biomedical technology, and robotics.
She believes these companies have the potential to reshape industries and deliver outsized long-term returns, but their volatility leads to big fluctuations in the values of Ark funds.
Over the 10 years ending in 2024, the Ark Innovation ETF wiped out $7 billion in investor wealth, according to an analysis by Morningstar’s analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking.
Still, Wood has been bullish on the market. In a letter to investors published in late April, she dismissed predictions of a recession dragging into 2026 and struck an optimistic tone for tech stocks.
“We think consumers and businesses are likely to accelerate the shift to technologically enabled innovation platforms, including artificial intelligence, robotics, energy storage, blockchain technology, and multiomics sequencing,” she said.
Not all investors share this optimism. In the 12 months through Nov. 6, the Ark Innovation ETF saw about $1.38 billion in net outflows, according to ETF research firm VettaFi.
Cathie Wood buys $13.8 million of Pinterest stock
On Nov. 5, Wood’s Ark funds purchased 521,867 shares of Pinterest (PINS), valued at approximately $13.8 million, following the social platform’s stock plunge after disappointing earnings and outlook.
