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Warren Buffett is getting his money’s worth – ARK Invest’s Cathie Wood is turning into a stock picker to watch. And she’s making huge bets on a number of stocks that Buffett doesn’t own and can’t match – even in the financial industry.
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Three securities which are the top 10 securities of ARK Invest’s ETF family, including Silvergate Capital (SI), health care Pacific Biosciences of California (PACB) and communication services company Wed (SE), has at least tripled the performance of Warren Buffett’s top U.S.-listed stock in the past 12 months, according to Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Wood, increasingly dubbed “Queen Cathie” by Reddit traders, is turning into the new Oracle Exchange. More than 30 of the top 45 holdings in ARK Invest’s five active ETFs over the past 12 months have beaten the performance of the top US-listed winner in Buffett’s Berkshire Hathaway portfolio: the home improvement retailer HR (RH). RH is up 116.8% in 12 months.
Warren Buffett: Make room for a new Oracle
Wood is quickly becoming a household name with investors. Hundreds of millions of dollars have been poured into his family of five ETFs this year. ARK currently has around $ 60 billion in assets, says ETF.com.
And stocks Wood buys for ETFs, including flagship product ARK Innovation (ARKK), regularly make headlines. Meanwhile, the ETF has risen 145% over the past 12 months. Buffett’s Berkshire Hathaway shares are down 4.3%.
It’s also a 12-month period to compare performance, as last year put both fund managers at 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 think will grow by around 250% year on year by the end of the quarter,” said Dan Wiener, editor-in-chief of “The Independent Adviser For Vanguard Investors”.
Cathie Wood shows Buffett the future of finance
Surprisingly, Wood seems to be educating Buffett in his traditionally favorite industry: finance.
Two of ARK Invest’s three holdings at the head of Buffett’s first US listed share are in ARK Fintech Innovation ETF (ARKF). In fact, while Wood is famous for his long-held optimism about You’re here (TSLA), its best performing stock in the past 12 months is Silvergate Capital, a financial firm. It has increased by over 880% in the past 12 months.
And Silvergate, a bank holding company in La Jolla, Calif., Is a 4.3% stake in ARK’s financial ETF. It is the fourth largest holding in the ETF. The value of the ARK Fintech Innovation ETF is up more than 125% in 12 months.
Buffett’s top performing financial stock, on the other hand, is a credit card company The synchronization (SYF). But it has only grown by 17.1% in the past 12 months. Meanwhile, Buffett’s largest financial position, a $ 34 billion stake in Bank of America (BAC), only increased by 2.3% in 12 months. It even underperformed the 16.6% rise in the S&P 500 during this period.
And that doesn’t even mention Sea, which is the ARK Fintech Innovation ETF’s 7th stake to 3.5% of the portfolio. The company powers digital financial services and e-commerce in Asia and Latin America. And that also puts all of Buffett’s financial pieces to shame. The shares of the sea are up almost 400% in one year.
Buffett can’t match Wood’s healthcare winner
Buffett takes care of some health care names. He added to his positions in healthcare at the end of 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?
Meanwhile, watch Pacific Biosciences of California. The shares of the maker of molecule sequencing equipment are up more than 800% in 12 months. Wood can expect big gains going forward 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 versus. Wood: who wins in the future?
But never count on Buffett.
The S&P 500 is moving and cyclical stocks are recovering. It could play in Buffett’s hand. Buffett’s # 1 U.S.-listed and full-year-traded stock is a household goods retailer.
Traditional bank stocks are also heating up and bringing value stocks with them. Financial services represent a quarter of Buffett’s public equity portfolio. And consumer discretionary stocks represent 5%.
Meanwhile, some of the expensive stocks are cooling off, like Tesla. And Tesla is in the top 10 of three of ARK Invest’s ETFs. Tesla fell 39.68, or 5.1%, to 741.62 on Monday. Tesla alone represents nearly 9% of ARK Innovation. In contrast, Buffett’s No.1 financial holding Bank of America rose 64 cents on Monday, or 1.9%, to 35.16. Should you buy Tesla shares now?
But Buffett, too, is heavily exposed to hot tech stocks. He lit up on Apple (AAPL) last year, but it’s still the # 1 title in its portfolio by far. Technology now accounts for 46% of its portfolio, including winning stocks of Snowflake (SNOW), which has yet to trade a full year.
And it’s always a bad idea to exclude Buffett. It can last for decades of market cycles, which ARK Invest has yet to prove.
Best performing ARK Invest shares
Top 10 winners of top 10 stocks in ARK’s five active ETFs in the past 12 months
| Business | symbol | Top 10 stocks in ARK ETF | 12 months% Ch. | Sector |
|---|---|---|---|---|
| Silvergate Capital | (AND) | (ARKF) | 878.4% | Financial |
| Pacific Biosciences of California | (PACB) | (ARKG) | 793.6% | Health care |
| Limited sea | (I KNOW) | (ARKF) | 387.9% | Communication services |
| Bitcoin Trust in Grayscale | (GBTC) | (ARKW) | 326.8% | Financial |
| Twist Bioscience | (TWST) | (ARKG) | 315.2% | Health care |
Sources: ARK, S&P Global Market Intelligence, ARKF = Innovation Fintech, ARKG = Genomic Revolution, ARKW = Next Generation
Follow Matt Krantz on Twitter @mattkrantz
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