Cathie Wood was put to the test in 2021 and next year won’t be any easier

Cathie Wood was put to the test in 2021 and next year won’t be any easier

Like many of us, Cathie Wood has had a crazy 2021. Investors in her flagship fund might argue that the year was even crazier.

Ark Innovation (ARKK), Wood’s main ETF, is poised to end 2021 down by nearly 25%, even as the S&P 500 is up by about the same amount. But the Ark Invest CEO is staying the course with bold bets on high-flying tech companies and chiding critics who commit to benchmarks “unlikely to generate even average returns during the next 10 years” — even as her own investors reel from heavy losses.

Despite a year marked by underperformance, Wood is keeping pace with the disruptive innovation strategy that positioned her as a bull market poster child last year after her allocations to the so-called “stay-at-home” picks that benefited from COVID-19 lockdowns earned her an annual return of 150%. Even as those stocks fall out of favor, Wood, whose firm declined a request for an interview, is sticking to her plan, arguing that naysayers should instead be worried about “safe” indexes like the S&P 500 with values she says have soared above those of the underlying companies they track.