Warren Buffett is running for his money: Cathie Wood of ARK Invest is becoming the stock picker to watch. And he’s making big bets on a series of stocks Buffett doesn’t own and can’t match, even in the financial sector.
Three stocks that are among the top 10 positions in the ARK Invest family of ETFs, including Silvergate Capital (YES), health Pacific Biosciences of California (PACB) and communications services company Sea (SE), at least tripled the performance of top U.S.-listed Warren Buffett stocks in the past 12 months, according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Wood, increasingly dubbed “Queen Cathie” by traders on Reddit, is emerging as the new Oracle of the stock market. More than 30 of the top 45 holdings of ARK Invest’s five active ETFs in the past 12 months outperformed the top US-listed winner in Buffett’s Berkshire Hathaway portfolio: home improvement retailer Rh (RH). HR has increased 116.8% in 12 months.
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Wood is becoming a household name among investors. Hundreds of millions of dollars were invested in his family of five ETFs this year. ARK has roughly $ 60 billion in assets now, says ETF.com.
And the stocks Wood is buying for ETFs, including the flagship ARK Innovation (ARKK), routinely skyrocket in the news. Meanwhile, the ETF is up 145% in the last 12 months. Buffett’s Berkshire Hathaway shares fell 4.3%.
It’s also an outstanding 12 months to compare performance, as the two money managers last year went through a peak in 2020, a brutal pandemic shock and a powerful recovery.
“I know a lot of people are fascinated by Cathie Wood’s ARK Innovation ETF, which I estimate will grow about 250% over a year at the end of the quarter,” said Dan Wiener, editor of “The Independent Adviser For Vanguard Investors.”
Cathie Wood showing Buffett the future of finance
Surprisingly, Wood seems to be educating Buffett in his traditionally favorite sector: finance.
Two of the three ARK Invest holdings that top Buffett’s top stocks listed in the US are in the ARK Fintech Innovation ETF (ARKF). In fact, while Wood is famous for her persistent optimism in Tesla (TSLA), its best performing stock in the last 12 months is Silvergate Capital, a finance company. It has increased more than 880% in the last 12 months.
And Silvergate, a bank holding company in La Jolla, California, has a 4.3% stake in ARK’s financial ETF. It is the fourth largest holding of the ETF. The value of the ARK Fintech Innovation ETF has risen more than 125% in 12 months.
Buffett’s best-performing financial stocks, on the other hand, are credit card companies. Synchrony (SYF). But it has risen only 17.1% in the last 12 months. Meanwhile, Buffett’s largest financial position, a $ 34 billion stake in Bank of America (BAC), has risen only 2.3% in 12 months. That’s even a return below the 16.6% increase in the S&P 500 at the time.
And that’s not to mention Sea, which is the 7th stake in the ARK Fintech Innovation ETF with 3.5% of the portfolio. The company drives digital financial services and e-commerce in Asia and Latin America. And it also shames all of Buffett’s financial plays. Maritime stocks are up nearly 400% in one year.
Buffett can’t match Wood’s Health Care winner
Buffett is loading up on some health care names. He added to his positions in health care in late 2020. Specifically, Berkshire increased his positions in Merck (MRK) by 28% and AbbVie (ABBV) by 20%. But they hardly stand out. Merck is down 9.2% in 12 months, while AbbVie is up 14%. Should You Buy AbbVie Stock Now?
In the meantime, check out Pacific Biosciences of California. Shares of the maker of molecule sequencing equipment increased more than 800% in 12 months. Wood should expect big gains in the future that are not yet apparent to analysts. Wall St. analysts believe the company will lose 96 cents per share in 2021, even more than the 62 cents per share it lost in 2020.
Buffett vs. Wood: Who wins in the future?
However, never write off Buffett.
The S&P 500 is turning and cyclical stocks are picking up. This could play into Buffett’s hand. Buffett’s number one stock listed in the US that trades for an entire year is a home goods retailer.
Stocks in traditional banks are also heating up, bringing with them valuable stocks. Finance represents a quarter of Buffett’s public equity portfolio. And consumer discretionary stocks account for 5%.
Meanwhile, some of the favorite stocks are cooling, like Tesla. And Tesla is one of the top 10 holdings in three of ARK Invest’s ETFs. Tesla fell 39.68, or 5.1%, to 741.62 on Monday. Tesla alone represents almost 9% of ARK Innovation. In contrast, Buffett’s number one financial position, Bank of America, rose 64 cents Monday, or 1.9%, to 35.16. Should You Buy Tesla Stock Now?
But Buffett is also heavily exposed to hot tech stocks. Lit up on Apple (AAPL) last year, but it is still the number one position in their portfolio by far. Technology now represents up to 46% of its portfolio, including winning stocks from Snowflake (SNOW), which have not yet traded in a full year.
And it’s always a bad idea to rule out Buffett. It knows how to last for decades of market cycles, something ARK Invest still needs to prove.
Top Yielding ARK Invest Shares
The biggest winners among the top 10 positions in ARK’s five active ETFs, last 12 months
|Company||Symbol||Top 10 ARK ETF Holdings||12 months% Ch.||Sector|
|Pacific Biosciences of California||(PACB)||(ARKG)||793.6%||Health care|
|Sea Limited||(I KNOW)||(ARKF)||387.9%||Communication services|
|Grayscale Bitcoin Trust||(GBTC)||(ARKW)||326.8%||Finance|
|Twist Bioscience||(TWST)||(ARKG)||315.2%||Health care|