ARK Invest’s Wood warns upcoming economic downturn in China ‘obvious’

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NEW YORK, Oct 12 (Businesshala) – An economic slowdown in China could ripple through the global economy and impact commodity prices and growth, ARK Invest’s star stock picker Cathy Wood warned in a webinar on Tuesday.

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Wood, whose flagship $19.7 billion Ark innovation fund was the best-performing US equity fund in 2020, said China’s recent moves in sectors ranging from gaming to education to financial firms are increasing the potential for a policy mistake, leading to a sharp recession.

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“I really think policy makers in China are starting to play with fire,” she said, “we’ll look at this period in six months and say ‘wasn’t it obvious that there would be a big and unexpected recession. In China? ?'”

Wood reiterated his bullishness on electric car maker Tesla Inc., citing its strong September in China despite a 17% drop in passenger vehicle sales from a year earlier.

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The ARK Innovation Fund rallied last year because of its outsized bets on companies like Tesla and Teledoc Health Inc., which grew during the pandemic. Yet rising concerns about inflation have weighed on the fund, reducing it to 11.4% for the year, compared to a nearly 17% gain for the benchmark S&P 500.

Shares of ARK Innovation were up 1.5% in Tuesday afternoon trading, leading the top-holding in Tesla to gain 2.4%.

Reporting by David Randall; Editing by Steve Orlofsky

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