Cathie Wood says her ‘volatile’ ARK Innovation fund shouldn’t be a ‘huge slice of any portfolio’

Cathie Wood is defending her underperforming ARK Innovation exchange traded fund following a rocky stretch.

“We have a volatile fund,” she told CNBC’s “Squawk Box” on Friday. “We should not be a huge slice of any portfolio. We are more of a satellite strategy now, although we think this is the way the world is going.”

Shares of the technology fund have lost near two thirds of their value from their pandemic heyday, when market excitement and the meme stock craze drove shares to nearly $160 and led the fund to more than double in 2020, soaring 149%.

Since then, the fund has underperformed, fueling skepticism over the Ark Invest CEO’s investment strategies. Shares are up 2.8% this year, far behind the S&P 500’s 24% gain, and over the past three years have lost about 23% annually, according to FactSet data.

Wood acknowledged that several “interesting behaviors” during the Covid-19 pandemic sent ARKK shares higher, but asserted that many of the technologies and research underpinning her firm’s investments are “much more advanced.”

She called out the multiomics life sciences and health care sectors as the biggest drag on the fund. This should change as new genome therapy editing companies such as Intellia Therapeutics emerge as providing alternative disease-curing methods.

“We think we’re a very good complement to the broad-based benchmarks out there, because we don’t look anything like them,” she said of her fund. “And truth will win out.”