Star stockpicker Cathie Wood’s ARK Innovation fund appeared to be returning to earth on Thursday after more than doubling last year.
The $23 billion fund slid 2.5%, leaving it down nearly 25% from its Feb. 12 high. Those losses are 8 times more than the roughly 3% decline in the benchmark S&P 500 over the same time. Despite that slide, the fund remains up 122% over the last 12 months.
Wood shot to prominence over the last year with her outsized bets on companies such as Tesla and Square that surged during the pandemic, attracting $14.84 billion in inflows over the past 12 months, according to Lipper data. Over the last month, however, technology stocks have faltered as investors have priced in concerns about higher inflation as the pace of vaccinations increase and hopes that the broad economy will put the coronavirus pandemic behind it.
Ark Invest did not respond to a request for comment.
Shares of Tesla Inc, which account for roughly 10% of the ARK fund, are down 26% over the last month, while shares of Roku Inc are down 13%. Shares of Teldadoc Health Inc, another of the fund’s top holdings, are down slightly more than 25% over the same time.
The rapid decline in performance could lead to large outflows from the fund as investors start to chase other managers that appear to have a hotter hand, said Todd Rosenbluth, director of ETF and mutual fund research at CFRA.
“Investors that arrived in 2021 after seeing triple-digit returns in 2020 are likely to be disappointed and be less likely to stick around as short-term losses pile up,” he said.
Investors pulled $465.3 million from the ARK Innovation fund on Feb 23, which was the fund’s largest outflow on record, according to Morningstar.