Catherine Wood, chief executive officer and chief investment officer, Ark Invest, speaks at the Milken Institute Global Conference in Beverly Hills, California in October of 2021.
Patrick T. Fallon is a photographer.
The flagship fund of Ark Invest has had a tough year so far.
According to a CNBC interview, Wood is sticking with her investment strategy of investing in innovation stocks.
The 5-year compound annual rate of return expectation has gone from 15% to 40%.
ARK Invest funds have had a tough year as innovation stocks correct, but they could turn into big gains over the next five years, according to Cathie Wood.
ARK Invest's flagship fund is down 19% year-to-date and has fallen 36% from its record high reached in February, while six out of Ark's eight ETFs are down on the year. Many Ark's innovation stocks are still trading at lofty valuations despite the steep correction, leading some to believe that they are in a bubble.
Wood defended her strategy and argued that her stocks are not in a bubble in an interview with CNBC. Many people are saying that the stocks were in a bubble and they deserve to correct that. That tells me we are not near a bubble.
The 5-year compound annual rate of return expectation has gone from 15% at the peak in March to nearly 40% today, due to the correction in innovation stocks.
Wood expects Ark's innovation stocks to double from their current levels over the next five years. Ark's portfolio has recently seen declines in names like Teladoc.
Wood believes that five major innovation platforms that involve 14 different technologies will drive the expected sky-high returns.
They're coming together. If we're correct that the taxi networks will evolve over the next five to ten years, then that involves the convergence of three major platforms: robotics, energy storage, and artificial intelligence. Wood said that all of them are scaling.
The seeds that are driving today's technology innovations were planted during the dot-com bubble 20 years ago, and are finally beginning to bear fruit.
People are running away now that they're about to flourish. They ran towards them too soon during the tech and telecom bubble, and here we are, ready for prime time. Wood is a portfolio manager.
Business Insider has an original article.
