Cathie Wood's ARK Innovation runs aground

The flagship fund run by Cathie Wood, who single-handedly revived the notion of a celebrity stock picker during the wildest days of the COVID-era market mania, is now barely running even with the plain vanilla S&P 500.

Driving the news: Wood's flagship Ark Innovation ETF is down roughly 62% this year, and nearly 80% from its peak in February 2021.

• Both the S&P 500 and ARK Innovation are up 77% since the fund went live in late October 2014. (Hat tip to Willie Delwiche, an analyst at All Star Charts, who spotlighted the above chart on Twitter.)

Why it matters: Wood — and her range of innovative ARK-branded actively managed ETFs — are a stand-in for the trillions of dollars worth of investments in unprofitable tech companies over the last few years.

• Buying such stocks made traders look like geniuses when interest rates were near zero.
• That's because these kinds of "growth stocks" — also often known as "unprofitable" companies — tend to be very sensitive to interest rates.
• When rates fall, they surge, and vice versa.

Between the lines: You could have seen this coming. Wood has a long history in the money management industry — and a reputation for aggressive bets on emerging technologies that often resulted in periods of outperformance followed by faceplants. We're currently at the latter stage.