ARK Invest's Wood expects market rotation back to growth stocks

Cathie Wood, founder and CEO of ARK Investment Management LLC, speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 13, 2021. REUTERS/Brendan McDermid

NEW YORK (Reuters) – Star stock picker Cathie Wood of ARK Invest on Tuesday reiterated her call that slowing economic activity in the United States will bolster growth stocks.

Wood cited disappointing job growth in August and weakening consumer price index figures as signs that the U.S. economy will grow at a pace slower than many on Wall Street expected at the start of the year. Her flagship $21.1 billion ARK Innovation fund was the top-performing actively managed U.S. equity fund tracked by Morningstar last year.

“We think we are moving into the other side of the cycle” after the reopening from the coronavirus pandemic led to widespread commodity shortages earlier this year and bolstered cyclical value stocks, she said on a webinar.

“We do believe that the market will start rotating back toward growth and innovation,” she added.

Wood’s portfolio, which is heavy in growth stocks such as Tesla Inc, Teladoc Health Inc and Unity Software Inc, is down 5.5% for the year to date, well behind the nearly 19% gain for the benchmark S&P 500. The performance ranks in the lowest percentile among the 593 U.S. mid-cap growth funds, according to Morningstar.

The fund fell 0.4% in afternoon trading Tuesday.

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