REUTERS/Jim Young
- Billionaire 'Bond King' Bill Gross slammed the hype around Ark's top stock-picker Cathie Wood Monday.
- He pointed out her flagship ETF has lagged funds tracking top tech stocks over the past five years.
- Wood is known for her big bets on disruptive tech, including AI and blockchain stocks.
Billionaire investor Bill Gross has slammed the hype surrounding Cathie Wood, pointing out that her flagship fund has underperformed a passive investment ETF that's tracked the Nasdaq 100 over the past five years.
"CNBC/media idolatry with Cathie Wood is absurd," the PIMCO founder said on Twitter Monday.
"Over [the] past 5 years QQQ has outperformed ARKK by nearly 100%," Gross added, referring to the high-profile Invesco PowerShares fund that tracks the performance of the Nasdaq's 100 biggest stocks.
QQQ shares have jumped 77% since February 28, 2018, replicating the Nasdaq 100's performance over the same period.
In contrast, investors who bought shares in Wood's flagship ARKK Innovation ETF five years ago would have actually lost money – with the fund slipping 13% over the same period.
Wood regularly appears on TV to discuss the disruptive tech names her firm invests in, including high-profile AI and blockchain stocks.
On Monday, she featured on CNBC's "Squawk on the Street", sharing her thoughts on the Federal Reserve, electric vehicles, and the cryptocurrencies bitcoin and ethereum.
Ark Invest's massive success was one of the defining stories for markets in the pandemic era, with ARKK skyrocketing over 300% between March 2020 and February 2021 as low interest rates and cheap fiscal stimulus fueled an "everything bubble" that inflated the high-growth stocks Wood invests in.
But the ETF has given up all of its gains since then, coinciding with a period where the Fed has lifted interest rates from near-zero to just under 5% in a bid to tame soaring inflation.
Higher borrowing costs tend to be bad news for growth stocks, because they chip away at the future cash flows that make up a core part of their valuations.
Gross isn't the first high-profile investor to pile in on Wood.
In October, Michael Burry said that he always expected the tech-investing star's ETFs to fall back to earth – and added that Ark's initial rally up to February 2021 was a sign of pandemic-era excess.
"How anyone over the age of 40 did not see it coming is a riddle. The answer is Greed," the "Big Short" investor said in a now-deleted Tweet.