Cathie Wood’s ARK Innovation slides deep into bear market territory

(Bloomberg) – Cathie Wood’s Ark Innovation ETF looked set for another difficult day on Tuesday as it extended losses in early trading after suffering its worst drop in seven weeks.

The ARKK exchange-traded fund fell 2.9% as of 5:38am in New York. The product, which makes concentrated bets on tech companies aiming to disrupt industries, plunged 5.2% on Monday to a six-month low with all but five of its 58 holdings retreating in a broad tech selloff.

That was double the loss of the Nasdaq 100 Index, and took ARKK’s decline from a February peak to 34%.

Wood has doubled down on some of her favourite bets in recent downdrafts, buying Twitter in three out of five days last week as it fell 5.2% in the worst week since March. She said in a television interview that the tech selloff has only set her fund up for a strong rebound. ARKK surged almost 150% in 2020 and is down 16% this year.

While all of ARKK’s major holdings retreated on Monday – Tesla, its biggest exposure, dropped 6.4% – the hardest-hit names in the portfolio were two biotech stocks. Twist Bioscience was the fund’s biggest laggard, plunging more than 17% for its worst one-day performance since February 5th. NanoString Technologies sank 12%.

On the bright side, Coinbase Global, which accounts for about 3% of the ETF’s holdings, gained 11.3% in the best day since its April 14 direct listing.

Wood’s firm, Ark Investment Management, added 33,300 Coinbase shares on Monday, according to Bloomberg’s calculations of data from the company’s daily trading update. The asset manager also sold 30.4% of its Apple holdings, the data show.

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