Stocktake: Air comes out of Cathie Wood’s Ark bubble

Netflix is not the only growth stock to bid farewell to its pandemic-era share price gains, as high-profile fund manager Cathie Wood knows all too well.

During the early days of the pandemic, investors piled into Wood's Ark Innovation exchange-traded fund (ETF), which consisted of disruptive (and usually eye-wateringly expensive) companies such as Tesla and Zoom.

Ark assets swelled from $3.6 billion (€3.3 billion) in early 2020 to $60 billion (€55.5 billion), with her flagship ETF becoming the largest actively-managed ETF in the world.

Now, hyper-expensive companies are no longer in vogue. Bespoke Investment notes the ARK ETF is down over 60 per cent since February 2021. Worse, the average stock in the fund is down over 70 per cent and would need to rally 348 per cent simply to return to its prior highs.

Stocktake: Have tech stocks bottomed?

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Stocktake: Retail investor sentiment nosedives

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Stocktake: Growth investors abandon Netflix

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Stocktake: Investors will demand a good earnings season

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In any market, you will always find a few money managers enjoying spectacular returns. This isn’t because they’re geniuses: it’s simply because their investment style is in fashion for a while. However, they get anointed as visionaries, money rushes in, only for the tide to turn and for investors to be left with steep losses.

Cathie Wood likes to talk about the future and the new technological era, but her story is as old as the hills.