Weight hits historic high! Tesla, after rebounding more than 80% from its low point, becomes the largest holding stock in "Wood Sister" flagship fund

Zhitong
2024.07.10 02:16
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Tesla's stock price has rebounded significantly, becoming the largest holding in the "Wood Sister" flagship fund. Tesla currently accounts for approximately 15.4% of the ARK Innovation ETF, reaching a historical high. Previously, Tesla's stock price rebounded by over 80% from its low point. Tesla has always been one of Cathie Wood's favored stocks. The second largest holding in the ARK Innovation ETF is Roku, and the third largest holding is Coinbase. The ARK Innovation ETF has not bought Tesla stock in the past few months, and it has fallen by about 12% this year. Tesla's stock price has risen for the 10th consecutive trading day, with quarterly delivery volumes exceeding expectations

According to the VESYNC financial APP, in the past few months, Tesla (TSLA.US) stock price has rebounded significantly, leading to the electric car manufacturer reaching its highest ever weight in the flagship ETF valued at $6.2 billion under "Cathie Wood", also known as "Wood Sister".

Compiled data shows that Tesla currently accounts for approximately 15.4% of the weight of the ARK Innovation ETF (ARKK.US), with the company's stock price rebounding by over 80% from the 2024 low point set in April. This is despite the recent weeks where the fund reduced its holdings of Tesla's stock.

An analysis by Strategas Securities indicates that this weight represents the most steadfast belief in the stock in the 10-year history of this disruptive technology fund. Tesla has always been one of Wood's highly favored stocks, and in April this year, Tesla reclaimed the top position in ARKK, replacing Coinbase (COIN.US). The ETF's second largest holding is Roku (ROKU.US) with a weight of around 9.1%. Coinbase ranks third, accounting for about 8.5%.

Todd Sohn, an ETF strategist at Strategas, stated: "The rise in stock price is undoubtedly a huge catalyst. Normally they would maintain the weight at around 10% to 11%, but now they are letting it continue to rise."

ARK Innovation ETF has not bought Tesla's stock in the past few months. According to the daily updates sent to clients, the fund even sold Tesla several times in July. The ETF has fallen by about 12% this year, while Tesla has risen by about 5%.

As of the close on Tuesday, the automaker's stock price has risen for the 10th consecutive trading day, marking the longest streak since June last year. The quarterly shipment volume announced this month exceeded analysts' average expectations, driving this upward trend.

The fund's parent company, Ark Investment Management, did not immediately respond to requests for comment.

Wood has always been one of Tesla's loyal supporters. At the height of the pandemic, she gained fame for boldly predicting Tesla's stock price. Retail investors accepted her views and drove the company's assets to over $60 billion in early 2021.

Subsequently, demand began to weaken. Currently, Ark Investment's 6 actively managed ETFs collectively have approximately $11 billion in assets. This year, these funds have seen net outflows of $3.4 billion, with ARKK leading the outflows at $2 billion Nevertheless, Wood remains confident in Tesla. In June, she updated her Tesla stock price forecast to reach $2600 by 2029, or around $3100 in a bull market scenario. As of Tuesday's close, Tesla's stock price was at $262.33.

Among the 10 ETFs with Tesla accounting for 10% or more of the total portfolio, 3 are Wood's funds. These include the $1.5 billion ARK Next Generation Internet ETF (ARKW.US) and the $839 million ARK Autonomous Technology & Robotics ETF (ARKQ.US).

Other funds include the $1.5 billion Fidelity MSCI Consumer Discretionary Index ETF (FDIS.US) and the $730 million First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN.US)