The Ark Innovation Fund (NYSEArca: ARKK), the flagship exchange-traded fund of star investor Cathie Wood’s Ark Invest, has endured a massive beating year-to-date.
As of 10 March, the ETF’s share price has crashed more than 36% YTD. But despite such a performance, inflows into the investment have surged since mid-January. With the week underway, ETFtrends has recently reported that the fund has hit four straight weeks of inflows.
In this time, the Innovation Fund has attracted $850 million from investors, all the bets coming on the back of a battered market.
But why is this the case?
Investors buying the dip and Wood’s “dependability”
According to Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, all of it is down to dip buyers. People are aggressively exploiting the opportunity brought by recent market turmoil to load up on positions and ARKK looks as good as any primed for a long-term bounce.
Balchunas also attributed the rush into the fund to Cathie Wood’s “dependability.”
He told ETFtrends:
“You can depend on Cathie Wood’s stock picks. Even people who don’t admire her stock picks are finding it appealing to buy her basket of ARK stocks at this price.”
It’s something many investors have come to admire in Wood and Balchunas believes its what makes people buy into her funds.
“She’s smart to stick to her guns [and] love it or hate it, it’s dependable,” the Bloomberg analyst added.
Wood is herself convinced the weakness in the market does not remove from the fact that new technologies continue to see growth. She shared the positive outlook in an interview with CNBC on Monday, forecasting “spectacular returns” over the next five years.
ARKK was down 2.5% in premarket trades on Thursday 10 March at 08:57 am ET. The fund is down 49% in the past year.
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