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Birthday : 11/26/1955
Place of birth : Los Angeles - United States

Wood's ARK Innovation Fund on pace for best month ever as battered stocks surge

01/27/2023 | 01:40pm EDT
2022 Milken Institute Global Conference

NEW YORK (Reuters) - Cathie Wood's ARK Innovation Fund is closing in on the best monthly performance in its history as it rides a rebound in many of the high-growth stocks that took a beating last year.

The $7.3 billion ARK Innovation fund is up slightly more than 25% for the month to date, putting it ahead of the 25% gain it notched in April 2020.

The January surge has been fueled by moves of 30% or more in some of the fund's top holdings, including Tesla Inc, Roku Inc, and Exact Sciences Corp, which have rallied alongside broader markets as some investors bet inflation will ease fast enough for the Federal Reserve to end its rate hikes earlier than projected. The S&P 500 index is up 6% year-to-date after falling 19.4% in 2022.

The gains are a turnaround from 2022, when ARK Innovation dropped nearly 67% and was one of the worst performing U.S. equity funds tracked by Morningstar as the Fed's monetary policy tightening weighed on many of the high-growth stocks Wood focuses on.

Investors are awaiting the Feb. 1 conclusion of the Fed's monetary policy meeting for clues on whether easing inflation is swaying policymakers to a less hawkish view. The central bank is widely expected to increase its key policy rate by another 25 basis points next week. Rates are currently between 4.25% and 4.50%, up from zero a year ago.

"I don't want to call this month a junk rally but it definitely has that aroma," said Brian Jacobsen, Senior Investment Strategist for Multi-Asset Solutions at Allspring Global Investments. "But if the end is near for rate hikes that does tend to be a more bullish environment for lower quality and higher growth names historically."

ARK Invest did not respond to a request for comment.

Overall, January's rally has helped ARK Innovation's assets under management grow by approximately $1.2 billion this month, while investors have pulled a net $59 million out of the fund, according to Lipper data.

(Reporting by David Randall; editing by Ira Iosebashvili and Diane Craft)

By David Randall


© Reuters 2023
Stocks mentioned in the article
ChangeLast1st jan.
ARK INNOVATION ETF ACC - USD -0.12% 37.85 Delayed Quote.21.00%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.47% 0.66519 Delayed Quote.-1.70%
BRITISH POUND / US DOLLAR (GBP/USD) -0.41% 1.2233 Delayed Quote.1.50%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.11% 0.72805 Delayed Quote.-1.25%
EURO / US DOLLAR (EUR/USD) -0.68% 1.07659 Delayed Quote.1.24%
EXACT SCIENCES CORPORATION 0.81% 66.06 Delayed Quote.32.11%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.12% 0.012148 Delayed Quote.0.26%
MORNINGSTAR, INC. -0.12% 188 Delayed Quote.-13.10%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.73% 0.62 Delayed Quote.-1.87%
ROKU, INC. -4.32% 60.735 Delayed Quote.55.28%
TESLA, INC. -1.12% 190.465 Delayed Quote.56.05%

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