Cathie Wood generates million-dollar profits in the midst of the banking crisis

Cathie Wood US Recession
  • Cathie Wood managed to raise $397 million in a single day through her investment fund Ark Innovation ETF (ARKK).
  • Wood expects the Federal Reserve to halt its campaign of interest rate hikes and that this will benefit growth stocks, including those in his portfolio.
  • Wood’s investment fund focuses on high-tech companies and has seen $100 million in inflows so far this year.

In the midst of the banking crisis that has generated panic on Wall Street, there is a big investor who seems to be having a great day. Cathie Wood, the founder of Ark Invest, has managed to attract $397 million in a single day for her fund Della Ark Innovation ETF (ARKK), thus achieving the largest inflow of money in a single day since April 2021, according to FactSet.

Investors may be investing in this innovation fund because they believe that the current banking chaos could cause the Federal Reserve to halt its rate hike campaign, which would benefit growth stocks. Wood’s disruptive technologies are among the hardest hit by rising rates in the past year.

Wood argues that the central bank is making a policy mistake by aggressively tightening monetary policy and ignoring signs of deflation. He expects a big rally in his innovation stocks when interest rates stop rising.

“Once the Fed stops looking back at CPI inflation and starts tackling the deflationary banking crisis that has caused short-term rates to rise 19 times and yields reversal, we wouldn’t be surprised to see a return. to the 1920s,” Wood said in a tweet early Wednesday.

The probability that the Federal Reserve will not raise interest rates at its March 21-22 meeting has risen to 65%, according to CME Group data.

The Wood ETF, which manages around $6 billion in assets, has risen more than 4% this week, outperforming the broader market, as concerns were raised that the collapse of Silicon Valley Bank could have a contagious effect. in the banking sector.

ARKK is up 21% this year as Wood’s top holdings like Tesla and Roku rallied dramatically. However, the fund is still 47% below its recent high.

According to FactSet, the innovation fund, which is focused on advanced technology companies in areas such as genomics, robotics, the internet and fintech, has received inflows of $100 million this year, the most among income-themed funds. global variables.

In conclusion, investor expert Cathie Wood, who heads the Ark Innovation ETF, has had a huge inflow of money in the midst of the current banking crisis. Wood believes the Fed is making a mistake by not accounting for deflation, and she expects her innovation stocks to see a big rally once interest rates stop rising.