Ark’s Cathie Wood Says Passive Investing Sparked The ‘Most Massive Misallocation Of Capital In The History Of Mankind’

Ark’s Cathie Wood Says Passive Investing Sparked The ‘Most Massive Misallocation Of Capital In The History Of Mankind’

Share to Linkedin Speaking at the Forbes 30/50 Summit in Abu Dhabi on Monday, famed stock picker, Cathie Wood, of Ark Invest sharply criticized passive investing and touted disruptive innovation stocks, even as her flagship fund continues to post lackluster returns as shares of top holdings like Tesla and Zoom continue to struggle. "Fear has pushed investors back to their benchmarks," Wood warned. The founder and CEO of Ark Invest on Monday criticized the wider shift toward passive investing as "backwards looking," arguing that "fear" has pushed investors back to "mimicking indexes, which is kind of mindless." "I believe this is the most massive misallocation of capital in the history of mankind," Wood told Forbes, arguing that her firm's thesis of investing in disruptive technology is now more important than ever given today's uncertainty in markets. The famed stock picker emphasized that she still sees "explosive growth opportunities" ahead, but increasingly risk-averse investors have "defaulted to benchmarks" amid concerns over inflation, the Russia-Ukraine conflict and the Federal Reserve's upcoming rate hikes. Wood's success soared in 2020 when her flagship ARK Innovation fund surged nearly 150%, but performance has since declined with the fund falling 24% last year and another 37%