Rebecca Blackwell/AP Photo
- Cathie Wood's Ark Innovation ETF is up 26% in the past month.
- ARKK's price is more than 75% off from its record high after two years of weak performance for the fund.
- Signals that inflation may be cooling have left traders open to tech-heavy bets like ARKK.
Cathie Wood's Ark Investment Management is having a killer start to the year, with all eight of the firm's exchange-traded funds on track to gain in January.
In particular, the famed money manger's flagship Ark Innovation ETF (ARKK) may have one of its strongest monthly performances ever. ARKK is up 26% in the past month, trading at $38 on Tuesday.
Although there's still a week to go, the exchange-traded fund could surpass the 26% monthly returns it gave investors in early 2021.
The surge in ARKK's price follows two low-performing years for the ETF, which is still down more than 75% from its record high. The fund's largest holdings, Exact Sciences Corp, is ahead 34% in the past month.
Markets have held up so far in 2023 relative to Wall Street analysts' dismal expectations. In a note to clients, Morgan Stanley warned investors of a plunge in equities, forecasting that the S&P 500 could fall another 22%. The tech-heavy Nasdaq Composite and S&P 500 are up 9% and 5% in the past month, respectively.
Traders are opening up to tech-heavy bets like ARKK again after getting crushed last year, eyeing cooler inflation that could put the Federal Reserve off of its aggressive path of interest rate increases.
"I think the Fed is close to ending this tightening move," Wood said in a quarterly investor call last Thursday, adding that a pivot would boost her funds' growth-focused strategies.