Drew Angerer is a photographer.
A spike in bond yields on Tuesday led to a continued sell-off in high-growth tech stocks that have little-to-no profits and sky-high valuations.
Ark Invest's flagship Disruptive Innovation ETF continued to under perform from 2021 and dropped as much as 7% on Tuesday.
According to data from Koyfin, Ark's portfolio was badly damaged, with only three of its 45 holdings in the green over the past two days. That's despite the fact that the index gained more than 1% on Tuesday.
Ark's portfolio gains are led by a company calledTesla, which surged on Monday after it reported its fourth-quarter vehicle deliveries.
In Tuesday trades, the portfolio's losses were led by Roblox, Shopfiy, and Unity Software. Ark makes portfolio moves based on its trading updates. Ark bought the dip in Teladoc and Invitae while trimming its position in Unity Software on Monday.
The 10-year US Treasury yield rose to 1.68%, the highest in more than two months and a significant increase from last week's close of 1.50%.
Expectations of higher inflation and anticipation of a tightening Federal Reserve have mainly contributed to the bond-yield surge. The Fed fund futures show a higher chance of a rate hike at the March meeting, up from 27% last month.
High-growth stocks are seen as negatively impacted by rising interest rates by investors. They mean a higher discount rate for stock valuation models. The argument that there is no alternative to buying growth stocks has been weakened by rising yields in fixed income securities.
A lot can change in a short period of time. With 249 trading days left in the new year, Wood and co. have plenty of time left to try and reverse its negative performance from 2021.
Markets Insider.
Business Insider has an original article.
