FILE PHOTO: A Wall Street sign is pictured in front of the New York Stock Exchange amid the coronavirus disease (COVID-19) pandemic in the Manhattan neighborhood of New York City, New York, the United States, April 16, 2021. REUTERS / Carlo Allegri
June 9, 2021
By David Randall
NEW YORK (Reuters) – Lower growth stocks prices as a result of the inflation-driven sell-off that began in February should see Ark Investment’s portfolios “more than triple” over the next five years, according to Star fund manager and founder That’s what Cathie Wood said in a webinar on Tuesday.
Wood, who became the face of the oversized rally of tech stocks like Zoom Video Communications Inc and electric vehicle maker Tesla Inc during last year’s coronavirus pandemic, said falling wood and copper prices signal that the market is “seeing initial signs” Risks are exaggerated “by inflation.
Wood prices are down about 30% from their May 7 highs, while copper prices have fallen nearly 6% over the same period.
“We know it was a difficult time in the innovation strategy market,” she said. As a result, Wood has moved into what she termed “opportunistic” investment strategies, such as specialty acquisition firms that have lagged well behind the S&P 500 benchmark.
Fears of inflation have weighed heavily on growth stocks since the beginning of the year and prompted investors to switch to so-called value stocks in sectors such as energy and financial stocks, which benefit from rising prices. The Russell 1000 Value Index is up nearly 18% over the year to date, while the Russell 1000 Growth Index is up nearly 7% over the same period.
Wood, whose ARK Innovation ETF was the top performing US actively managed equity fund tracked by Morningstar last year, has seen stagnant performance along with the slowdown in growth stocks. Their flagship fund is down nearly 28% from its early February high.
The fund rose 0.1% in afternoon trading on Tuesday.
The market focus on Wood’s portfolio has largely been replaced this year with an emphasis on so-called meme stocks like AMC Entertainment Holdings Inc and GameStop Corp, which have risen more than 1,000% since early January thanks to individual investors visiting social media sites Soaring like Reddit.
When asked, Wood said that ARK doesn’t search Reddit for stock ideas, but rather monitors it for the “big conversation” about the companies the company holds.
(Reporting by David Randall in New York; Editing by Matthew Lewis)
This article originally appeared on www.oann.com