Cathie Wood’s ARK Innovation fund is heading to its worst-performing month since its creation, with a 29% plunge in April.
Following the easing of the Covid-19 pandemic Fed hawkishness boosting bond yields, Wood’s heavy bet on high-growth stocks has pushed the majority of her funds to a negative area.
Her flagship fund plummeted roughly 70% from its all-time high in 2021 when the Covid-19 benefactors such as Zoom Video and Teladoc were rallying. On Thursday, Teladoc declined 48% after reporting a massive first-quarter loss and weak 2022 guidance resulting in a $400 million loss to Wood on that stock alone.
Wood rose to popularity in 2020 as her stock picks massively outperformed the broader market earlier in the pandemic. But gains have vanished, and her longer-term outperformance is shrinking.
Ark Innovation ETF has now returned about 109% over the last five years, while the S&P 500 has returned about 97%.
Meanwhile, Wood has warned that the recent slide in stocks and bonds could be a warning sign that the Fed could trigger a financial crisis.