- The director of Ark Invest highlighted that inflation turned out to be higher than expected due to disruptions in the supply chain.
- “We believe that a big problem is inventories. I have never seen such a big increase in my 45-year career,” she added.
- Wood clarified that sustained inflation, plus supply chain problems and the war in Ukraine led to deflation.
- Even though his flagship fund fell by more than 50%, Wood said he still sees money coming into his ETFs and that’s thanks to innovation.
In an interview with CNBC, Cathie Wood acknowledged that she underestimated the seriousness of inflation in recent months and left a statement that surprised many: “The United States is already in an economic recession.”
“We think we are in a recession. We believe that a big problem is inventories. I’ve never seen such a big increase in my 45-year career.”
Wood.
The director of Ark commented that inflation turned out to be higher and more persistent than she expected and this was due to disruptions in the supply chain and geopolitical risks.
“We were wrong about one thing and that was that inflation remained sustained. I can’t believe it took over two years because of supply chain issues and the Russian invasion of Ukraine, of course we couldn’t have seen it. Inflation has been a bigger problem, but it has led us to deflation.”
Wood.
In May, the consumer price index rose again to 8.6% from a year earlier, marking the biggest increase in 40 years.
The investor also referred to the University of Michigan Consumer Surveys, which revealed that rising prices caused confidence data to fall to record lows.
Tough months for Cathie Wood
Wood is going through a difficult year. His bets on disruptive and innovative technology did not pay off. His flagship fund, Ark Innovation ETF (ARKK), is down 52% year to date, tumbling 66% from its all-time high.
Similarly, the investor did not lose her confidence and explained that most of her clients have not abandoned her and that she is seeing cash inflows from investors trying to diversify in the midst of a bear market. According to FactSet, ARRK had more than $180 million in inflows in June alone.
“I think the inflows are happening because our clients have been diversifying away from broad-based benchmarks like the Nasdaq 100. We are all about disruptive innovation. Innovation solves problems.
Wood closed.
