After flagship ARKK lost 67% of its value last year, the fund manager looking to 2023 to attempt redemption
Cathie Wood’s ARK Investment Management filed its latest 13F with the SEC this week, reporting fund movements for the March quarter. ARK Invest is a boutique investment firm that focuses on investing in disruptive technologies and innovative companies.
The investment strategy was sound in an environment of falling cash rates and expanding valuations following on from the 2008 global financial crisis that rewarded her investors with consistent market outperformance.
The vision came to a crashing end in 2022 when central banks globally began raising cash rates rapidly to cool inflation from spiralling out of control.
The companies that ARK held most of its exposure traded on excessive valuations with little profitability that de-rated significantly when market dynamics shifted. The flagship ARK Innovation ETF (NYMARKET:ARKK) has lost 67% of its value last year, mounting on losses of 24% in 2021.
Yet, 2023 is a new year for Wood to attempt redemption. We reveal here the top movements that have been made during the first quarter of the year.
The hedge fund currently has 221 reported positions according to SEC filings which has shrunk from 232 positions reported in the preceding quarter.
The fund movements provide insights into the ever-changing investment landscape and show ARK is attempting to adapt to new opportunities and challenges.
The St. Petersburg, Florida firm reported a fund value of $14.55 billion at the end of the first quarter, growing from $11.54 billion in the previous filing.
The five biggest positions, by weight, held in the fund at the end of the quarter were:
1. Tesla Inc (NASDAQ:TSLA) – 7.76% weight
2. Roku Inc (NASDAQ:ROKU) – 5.64%
3. Zoom Video (NASDAQ:ZM) – 5.51%
4. Coinbase Global (NASDAQ:COIN) – 5.47%
5. UiPath (NYSE:PATH) – 5.42%
A heat map has been included below which illustrates the hedge funds top 100 positions by size:
Top Q1 Fund Increases
Tesla stock saw a significant portfolio increase of 2.82% from 5.44 million shares to a 7.55% weight worth $1.13 billion at the end of the quarter. ARK increased its share count by 17.60% to 5.44 million shares, backing more capital into the EV manufacturer.
Coinbase Global saw a 2.65% increase in portfolio percentage, with ARK increasing their holdings by 11.78 million shares, valued at $795.71 million or 5.47% of the fund. On the back of the crypto price recovery, the firm increased its stake in COIN by 28.15% to 11.78 million shares.
Roku’s portfolio allocation increased by 1.37% to a 5.64% weight worth $821.66 million at the end of March. The fund also increased its ownership count in the stock by 3.04% to 12.48 million shares.
ARK’s DraftKings Inc (NASDAQ:DKNG) position was worth $463.31 million at the end of the quarter, increasing to 3.18% of the fund. The firm actually sold 4.4% of its position and only held 23.93 million shares vs 25.03 million prior, however the recent stock rally has grown the remaining position size.
Wood loaded more capital into the Roblox Corp (NYSE:RBLX) position worth $406.01 million at the end of the quarter with its portfolio allocation growing by 0.70% to 2.79% of the fund. The position share count was increased by 6.64% to 9.02 million shares.
Other stocks that saw meaningful increases in the portfolio included Shopify (NYSE:SHOP), UiPath, Pacific Biosciences of California (NASDAQ:PACB) and 10x Genomics (NASDAQ:TXG).
Top 3Q Fund Decreases
Exact Sciences Corporation (NASDAQ:EXAS) saw the most significant allocation decrease during the quarter, with ARK selling 29% of its position, reducing it from 16.04 million shares to 11.38 million. The total position size of $771.62 million saw a minor reduction to its value quarter-on-quarter as the stock price doubled during the quarter.
The allocation to Beam Therapeutics Inc (NASDAQ:BEAM) was pared by 0.97% to 1.80% worth $262.52 million at the end of the quarter. ARK’s share count rose by 4.39% or around 160,000 shares to 8.57 million but the share price has declined.
The position in Zoom Video declined by 0.71% to 5.51% of the portfolio worth $802.41 million. The fund increased its share holding by 2.37% to 10.87 million shares, however the ZM stock price remains weak as the global economy continues to emerge from the pandemic.
The Twist Bioscience Corp (NASDAQ:TWST) position size shrank by 0.63% to 0.74% of the portfolio worth $108.26 million. The total share count rose by 7.14% to 7.18 million shares as the share price declined.
ARK’s Ginkgo Bioworks Inc (NYSE:DNA) position declined by 0.61% to 1.51% of the portfolio worth $219.13 million. The company grew its share holding by 14.11% to 164.76 million shares during the quarter, however the share price fell.
Other stocks that had meaningful decreases in portfolio allocation were Veracyte (NASDAQ:VCYT), Fate Therapeutics (NASDAQ:FATE), Intellia Therapeutics (NASDAQ:NTLA) and Incyte Corp (NASDAQ:INCY).
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