Cathie Wood defended her firm’s innovation-focused portfolio, saying she sees “spectacular returns” for Ark Invest over the next five years.
“Given our expectations for growth in these new technologies, I think we’re going to see some spectacular returns,” the Ark Invest CEO told CNBC’s “Capital Connection.”
She said the firm has seen “significant inflows” since Jan. 17.
“I think a lot of our investor base is averaging down,” she said. Averaging down refers to the investment strategy of buying more units of an asset when its price drops.
“You’d be amazed if you average down over time, how quickly a strategy can come back above that average. And if we’re right, significantly above that average over the next five years,” Wood said.
Her comments come after her firm’s flagship fund has been caught in the recent tech-led sell-off. The Ark Innovation ETF has nearly halved in the past 12 months.
“We’ve been in a terrible bear market for innovation,” she admitted. “However, if you look from the bottom of the coronavirus to that peak [of the Ark Innovation ETF] in February of ’21, we were up 358%.”
Wood said the world is currently facing “all kinds of problems” and innovation is set be the answer.
She pointed to the ongoing war in Ukraine, which has has triggered a surge in the prices for some commodities like oil. Wood said the conflict is set to lead to “a lot of demand destruction and substitution into innovation” such as a switch toward electric vehicles away from those that are gas-powered.
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