Cathie Wood’s Dip-Buying Binge Mainly Focusing on Small Stocks

Abhishek Vishnoi, Bloomberg News

Catherine Wood, chief executive officer of ARK Investment Management LLC, participates in a panel discussion during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, May 2, 2022. The event convenes the best minds in the world to tackle its most urgent challenges and to help realize its most exciting opportunities. , Bloomberg

(Bloomberg) -- Cathie Wood’s latest dip-buying binge appears to be largely focused on smaller stocks, cementing her firm’s already hefty shareholdings in such companies.

Barring a few transactions in names like chipmaker Nvidia Corp. and Tesla Inc., Wood’s Ark Investment Management LLC has largely been picking up smaller stocks including automation software provider UiPath Inc., biotech firm Ginkgo Bioworks Holdings Inc. and space systems company Rocket Lab USA Inc. since Sept. 13, according to data compiled by Bloomberg.

That’s a change from when Ark funds bought Tesla in 10 sessions from the last week of May to mid-June after the electric carmaker lost its crown jewel status in her main fund, a position it had held for about four-and-a-half years.

Wood’s leaning toward smaller stocks came after markets tumbled in the wake of hotter-than-expected US inflation and another jumbo rate hike by the Federal Reserve in September.

Ark ranks as the second biggest shareholder in UiPath and the fifth largest in Ginkgo, while Rocket Lab is a relatively recent addition to its funds.

Some of the smaller stocks have fallen a lot more than larger companies this year, which would have burnished their appeal amid any bargain hunting. For example, UiPath, Ginkgo and Rocket Lab are each down more than 60% year-to-date, compared to a 21% decline for both the Russell 2000 Index and the S&P 500 benchmark.

READ: Ginkgo Bioworks Hits Six-Week High as Ark Funds Buy Shares

To be sure, Wood still bought Tesla shares on Monday following a decline in the aftermath of the company’s disappointing delivery numbers.

Ark’s flagship Ark Innovation ETF has plunged 58% in 2022 as historical tightening by the Federal Reserve and global recession fears batter growth stocks.