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Cathie Wood: Investing Genius or Flash in the Pan?

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After her slump in 2021/22, some have come to question Wood’s prowess. But her five-year track record shines.

Author:

Dan Weil

Publish date:

Mar 3, 2022 12:59 PM EST

Is she a genius or is she a flash in the pan? This is the question that has arisen about Cathie Wood, chief executive officer of Ark Investment Management.

It has come after her flagship Ark Innovation ETF ARKK soared 157% in 2020, but then slumped 23% last year and has slid another 32% so far this year. Still, over the past five years, Ark Innovation has generated an annualized return of 26%, handily beating the S&P 500’s 15% return.

A Financial Times profile of Wood offered both positive and negative commentaries about her. 

On the positive side, “Regardless of performance trends, it’s clear that Cathie is disrupting the asset management industry in order to capture the imagination of a new generation of investors,” Katie Koch, a partner at Goldman Sachs Asset Management, told the FT.

“She has demonstrated great respect for the retail investor by democratizing access to information.”

Most of the criticism of Wood was offered anonymously. 

But Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management and Wood’s boss at money manager AllianceBernstein, told the FT, “Cathie’s a boom or bust investor because she doesn’t disinvest or risk manage. This is the challenge that she has had for her entire career.”

Meanwhile, on Wednesday, Ark exchange-traded funds purchased shares of video-meetings platform Zoom Video Communications  (ZM) – Get Zoom Video Communications, Inc. Class A Report, e-commerce titan Shopify  (SHOP) – Get Shopify, Inc. Class A Report, video streaming platform Roku  (ROKU) – Get Roku, Inc. Class A Report and digital entertainment company Sea Ltd.  (SE) – Get Sea Ltd. (Singapore) Report. Ark also sold shares of Disney  (DIS) – Get Walt Disney Company Report.

In the biggest purchase, Ark bought shares of Shopify, valued at $12.1 million as of Wednesday’s close. Ark Innovation dumped shares of Disney valued at $16.5 million as of Wednesday’s close.

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