Cathie Wood sells $270 million in Tesla as bond rout hurts Ark

Cathie Wood sold a near $270 million stake in Tesla Inc. as the bond selloff hit rate-sensitive technology stocks to spur outflows from her growth-focused funds. 

Wood’s Ark Investment Management offloaded more than 340,000 Tesla shares across three exchange-traded funds on Tuesday, according to the firm’s daily trading update. 

Some 11% of the famous ARK Innovation ETF (ticker ARKK) is still betting on Elon Musk’s company, according to data compiled by Bloomberg. The firm tends to trim the stake when it rises above 10%. Tesla has generally outperformed in the global rout hitting rate-sensitive investing styles, while ARKK posted one of its worst sessions in months on Tuesday. 

Meanwhile data overnight showed money managers withdrew $297 million from the growth-focused fund on Monday, the most since March, to bring the four-day outflow to more than $660 million.

Since the Federal Reserve signaled last week a move to taper pandemic stimulus, Treasury yields have jumped and sent a shockwave through growth shares. Ark funds are heavily exposed to such names thanks to Wood’s focus on disruptive innovation and tech.

 

Tesla remains Wood’s largest bet as the biggest holding for the flagship ARKK fund as well as the firm overall. She predicts its shares will rise from around $778 currently to $3,000. However, Ark often trims its stake in the carmaker when it has performed very well or grown too large in the portfolio.

The carmaker is up 5.7% this month, compared with 5.2% drop for the Nasdaq 100 tech gauge. ARKK is down 8.2%.

Trading arrangements for the Ark ETFs mean flow data arrives with a one-day lag, but given ARKK’s 4.2% slump on Tuesday it’s likely there were more outflows in the latest session. If so, the amount of Tesla sold by the firm could have been higher than $270 million, since the daily trading updates show only actions by the Ark team, and do not include redemption activity caused by investor flows.

ARKK gained 1.4% in early trading as of 7 a.m. in New York, while futures for the Nasdaq 100 added 0.9% and Tesla climbed 0.9%.