Cathie Wood buys Alibaba after four years in fresh China comeback
NEW YORK: Cathie Wood’s funds have reopened positions in Alibaba Group Holding Ltd for the first time in four years, just as the stock rallied to a multi-year high on optimism over the Chinese firm’s push in artificial intelligence (AI).
A daily trading report from Wood’s Ark Investment Management showed that two of the firm’s exchange-traded funds (ETFs) snapped up American Depositary Receipts (ADRs) of Alibaba on Monday.
The stakes are worth about US$16.3mil in total, according to the funds’ holdings reports.
At the time of writing, Alibaba ADRs touched the highest levels since November 2021, having almost doubled year to date.
Investors are ramping up bets that the Internet giant’s AI push could reinvigorate growth, after its core eCommerce business gets pinched by increased competition from rivals, including PDD Holdings Inc.
Ark’s first investments in Alibaba can be traced back to 2014, shortly after the company’s initial public offering that year, according to a Securities and Exchange Commission (SEC) search tool.
But no investment or proxy voting record could be found after September 2021, when the firm was in the centre of a sweeping regulatory crackdown.
The latest investment could mark a return for Ark after limiting its holdings in Chinese Internet stocks since the sector’s meltdown in 2021 and 2022.
Earlier this year, it started building a position in Baidu Inc, SEC’s records showed.
It snapped up more shares in the search engine operator on Monday, bringing the overall position to about US$47mil.
Ark’s ETFs also invest in electric vehicles maker BYD Co Ltd, autonomous driving technology firm Pony AI Inc and JD Logistics Inc, though these stakes are relatively small.
Wood has been widely known for her aggressive bets on disruptive technologies, and achieved outsized gains from her flagship Ark Innovation fund in 2020.
While the fund’s 49% return this year is far ahead of the S&P 500 and the Nasdaq 100, it’s down on a five-year basis.
It has suffered an outflow of US$438mil this year, according to data compiled. —Bloomberg