Cathie Wood's Flagship Fund Up 17% Since May Bottom: What's Behind The Rise?

Cathie Wood-led Ark Investment Management’s flagship innovation fund, which counts Tesla Inc TSLA, Zoom Video Communications Inc ZM and Coinbase Global Inc COIN as top constituents, has rallied 18% higher since bottoming out in May. 

What Happened: Ark Innovation ETF ARKK declined over 10% on May 11 after shares of Coinbase plummeted 26.4% following the cryptocurrency trading platform reporting a $430 million net loss and massive declines in active users in the first quarter.

Both ARKK and Coinbase have advanced higher since then — the innovation ETF has risen 16.8%, while the cryptocurrency exchange has soared 24%. 

See Also: Tesla Bull Cathie Wood Says Bet Against 'Disruptive Innovation' Will Prove Ill-informed, Ill-timed

Coinbase is now ARKK's eighth-largest holding, slipping from No. 5 at the beginning of the year. Ark Invest, however, has been piling up shares in cryptocurrency-linked stocks such as Coinbase and Block Inc SQ on the dip.

ARKK Still Down: The ETF, which also has Roku Inc ROKU and UiPath Inc PATH as key holdings, is down 55% this year. 

In comparison, the S&P 500 is down 14.3% so far this year and has advanced 4.4% since May 11.

Tesla shares, which currently rank second in ARKK, have been volatile in the past month and have declined 12% since May 11. 
Zoom, which currently sits on the top of the ETF ranking, has advanced 29% during the period, while Roku at the third spot advanced 11%, and Block at No. 4 gained 16.7%. The four stocks together have a 32% weight in the fund.

Wood has previously blamed the Federal Reserve for its rate hikes to tame inflation for the fund’s losses. 

See Also: Why Cathie Wood Says Record-Breaking Inventories Could Lead To Weaker Prices

Photo courtesy: Ark Invest