By
Svetlana Soroka
April 18th, 2024
The entirety of Ark Invest’s portfolio is down 36.7% and is currently amongst the worst-performing stocks in the US at this time.
Cathie Wood, the founder of American investment management Ark Invest is not losing her trust in electric car manufacturing firm, Tesla Inc (NASDAQ: TSLA) despite the fears of recession looming in the United States. As reported by Reuters, the fears of the recession were further compounded by Tesla’s production activities being incapacitated with the closure of its Shanghai GigaFactory based on the rising cases of Coronavirus infections in China.
Tesla is considered one of the wonder stocks on Wall Street, recording some of its best years back in the heat of the coronavirus pandemic. The founder of Ark Invest Cathie Wood bet big on the stock and while she has generally benefited from the company’s growth over the years, she is still optimistic about its future irrespective of the current bearish outlook.
She hinges her belief on the company’s innovative sprint which has positioned it atop the list of its peers in the electric vehicle industry.
“What we said during COVID-19 about innovation solving problems will move into overdrive,” she told a webinar, with Tesla poised to “deliver truly exponential growth for many, many years” as it expands its autonomous driving programs.
The optimistic calls come off as a very bold one as the 2-Year Treasuries have grown about the 10-Year counterparts in the past few weeks. This is one of the most direct signs of a looming recession.
Ark Invest Outlook and Impending Payday?
Ark Invest may be losing its luster amongst investors as capital deposit therein is being depleted on a week by week basis. According to Lipper data, as much as $791 billion have been removed from Ark Invest in the past three weeks, a major setback that shows dwindling or temporary loss of confidence.
The company’s Ark Innovation ETF, an Exchange Traded Fund that invests at least 65% of its capital in domestic and foreign equity securities of companies that are relevant to the Funds investment theme of disruptive innovation was ranked as the top US equity for 2020.
While this fund’s growth has been tapered down considerably, Cathie Wood believes the search for a “truly disruptive innovation” amongst investors will further push them back into technology stocks which will surely return the fund to its glory days.
This optimism is however not sparing some of Cathie Wood’s best picks as Tesla stock is down 6% in the year-to-date period. Another star pick, Teladoc Health Inc (NYSE: TDOC), a multinational telemedicine and virtual healthcare company has slumped by more than 26% since the start of the year.
The entirety of Ark Invest’s portfolio is down 36.7% and is currently amongst the worst-performing stocks in the US at this time.