ARKK ETF sees inflow streak as Cathie Wood acknowledges inflation

Yahoo Finance’s Alexandra Semenova joins the Live show to discuss ARKK ETF seeing is longest inflow streak in over one year as inflation continues.

Video transcript

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- Cathie Wood's ARK Innovation ETF has been in a freefall for much of the year, down roughly 50% in 2022. Ouch. The growth ETF is significantly off its highs of the pandemic, but there are new signs that investors still have conviction in Wood's flagship fund. Alexandra Semenova joins us now with the latest. And you know, look, you've got to have thick skin to be in ARKK right now, but why are people who are in it still excited about it?

ALEXANDRA SEMENOVA: Well, I just wanted to point out a few things about Cathie Wood. She's back in the spotlight this week. First and foremost, I want to get to comments that she made this morning in an interview with CNBC. She said that we are in a recession, and she acknowledged that inflation is a problem, which for many of us, you know, it's been a problem. But for Cathie Wood, this is a rare admission that she was wrong. Up until this point, she had been saying that we're in a period of deflation, not inflation. So very interesting to see her walk back on her earlier comments.

And then the other point this week that I wanted to make is that her fund just experienced eight straight days of inflows, which is the longest streak of inflows since March 2021, about $640 million. So investors are still pouring money into the ETF, even as it's been on its way down, down more than 70% from its peak in February of 2021.

- Yeah, she does have loyal followers in-- you know, I mean, say what you will about where her performance has been, she has conviction, right, in some of these names she's been investing in. I mean, what does that portfolio look like right now? What is she buying?

ALEXANDRA SEMENOVA: She has been buying up Coinbase. She's been buying up a lot of the beaten down names in her fund. She continues to buy Tesla, Roku, Zoom, some of these pandemic work-from-home stocks that haven't been doing so well. But that's actually one of the strong suits about Cathie Wood.

You know, she has gotten a lot of criticism for her stock picks and for not acknowledging the risk that her investors are facing, but at the same time, there are investors who look at her and see her as someone who is incredibly certain about her strategy, who is very confident, despite all of the criticism that she's gotten. And they want to allocate to the fund. So that, at the same time, has been what is driving these inflows to her strategy.