Cathie Wood says the underlying bull market is strengthening, will benefit Ark's strategy over time

Cathy Wood

Crystal Mercedes | CNBC

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Ark Investment Management founder and CEO Cathie Wood said she was not worried about the recent drop in her funds and that the bull market is simply broadening out to include more strategies like value and that over time here disruptive strategy would pay off.

“Right now the market is broadening out and we think in an underlying sense the bull market is strengthening and that will play to our benefit over the longer term,” Wood said on CNBC’s “Closing Bell” on Monday.

Wood manages five ETFs focused around “disruptive innovation” that have raked in more than $15 billion of investor money this year alone. Ark’s flagship fund — Ark Innovation — returned nearly 150% in 2020 as the pandemic accelerated innovation trends and now has more than $17 billion in net assets. However, ARKK is down about 8% this year amid recent weakness in technology stocks, pressured by rising interest rates.

Wood said Ark is struck that the market never priced in 0.5%, 1%, or 1.5% yield on the U.S. 10-year Treasury.

“We do think the speed of the increase in interest rates is scaring people. It became very comfortable in a low interest rate environment: nothing much changing, the Fed has our back and so forth,” said Wood.

Staying the course, Wood took the recent tech weakness as an opportunity to buy the dip in some of her ETF’s top holdings. Wood has made big purchases of Tesla, Teladoc, Zoom Video and Palantir. Ark Innovation also scooped up shares of SquareRokuZillow and Shopify recently.

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