On Friday, CNBC’s Jim Cramer warned that Ark Invest seems to be losing its influence on the stock market, at least for now.
Cathie Wood’s exchange-traded funds (ETFs) secured a spot in Wall Street’s best performers last year. In 2021, however, Ark Invest is failing to replicate the same as investors fixate on the stocks that are expected to outperform amidst the economic recovery and shift away from high-growth stocks.
Ark Invest is seeing higher outflows this year
Ark Invest met with higher outflows as its ETFs started to lose momentum this year. According to the “Mad Money” host:
“It seems pretty clear that the Ark Invest phenomenon is no longer in play. We’re not seeing major outflows here, but the era of Cathie Wood propping these stocks up with her own buying bazooka, I think, it appears to be over.”
In comparison, when Cathie Wood’s ETFs were outperforming last year, it had attracted more investors, leading to higher inflows. While the funds haven’t performed remarkably in 2021, the flagship ARK Innovation ETF has been comparatively upbeat in recent days as growth stocks started gaining the spotlight again. In the past five days, the flagship fund has gained about 2.4% versus the benchmark S&P 500’s 1.9% decline.
Ark Innovation also jumped 6% earlier in June
Ark Innovation ETF had also posted a 6% increase between 7th June and 11th June. Cramer further said on “Mad Money” last Friday:
“Here’s the bottom line: when you look at the fund flows, Ark Invest’s no longer propping up the turbo-charged growth stocks, which makes their recent rebound feel a lot more significant to me. Maybe if this group keeps climbing, Cathie Wood can get her bazooka back, but until then, the ‘WoodStocks’ will rise or fall on their own.”
The news comes a week after Ark Invest bought $42 million worth of DraftKings stock. Cathie Wood now owns 870,300 DraftKings shares in total.
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Wajeeh Khan
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