Cathie Wood says she still expects to see ‘spectacular returns’ over the next 5 years

Cathie Wood defended her agency's innovation-focused portfolio, saying she sees "spectacular returns" for Ark Invest over the next 5 years.

(*5*) the Ark Invest CEO advised CNBC's "Capital Connection."

Her feedback come after her agency's flagship fund has been caught in the latest tech-led sell-off. The Ark Innovation ETF has almost halved in the previous 12 months. In comparability, the benchmark S&P 500 is up almost 15% in the similar time interval.

"We've been in a terrible bear market for innovation," she admitted. "However, if you look from the bottom of the coronavirus to that peak [of the Ark Innovation ETF] in February of '21, we were up 358%."

Wood mentioned, nevertheless, the agency has seen "significant inflows" since Jan. 17.

"I think a lot of our investor base is averaging down," she mentioned. Averaging down refers to the funding technique of shopping for extra items of an asset when its value drops.

"You'd be amazed if you average down over time, how quickly a strategy can come back above that average. And if we're right, significantly above that average over the next five years," Wood mentioned.

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Wood mentioned the world is presently dealing with "all kinds of problems" and innovation is about be the reply.

She pointed to the ongoing battle in Ukraine, which has has triggered a surge in the costs for some commodities like oil. Wood mentioned the battle is about to lead to "a lot of demand destruction and substitution into innovation" reminiscent of a swap towards electrical automobiles away from these which are gas-powered.

She described her agency as the closest factor to a enterprise capital fund in the public markets, which worth these frontier know-how corporations in another way than non-public markets.

"If you compare what's going on in the public equity markets to the private equity markets, when it comes to innovation, we've seen a 60% drawdown in the last year. The private markets have seen a 20% increase … as we have analyzed it through Crunchbase," Wood mentioned.

She attributed this to public markets being "filled with investors who are benchmark sensitive," as opposed to non-public markets traders who see the "explosive growth opportunities" in main innovation platforms.

While know-how is already a heavyweight in the S&P 500, accounting for 28% of the index, Wood mentioned these shares are "part of the success in the past."

"Our technology stocks are going to be the future successes and they will end up in the indexes," she mentioned.

'The threat of recession has gone up dramatically,' says Cathie Wood of Ark InvestCapital Connection

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