By David Randall

NEW YORK (Reuters – Investors are concerned that Federal Reserve plans to increase interest rates at a too aggressive pace because of the current recession in the world economy, according Cathie White, a stockpicker star.

Wood’s ARK Innovation ETF was the best performing U.S. equity fund during the Pandemic rally of 2020. Wood stated that slower economic growth will be beneficial to innovative companies the fund invests.

“There are a lot of indicators to us that we are in a bit of a bear market” because of the Fed’s expected plan to increase rates by 50 basis points at its June and July meetings, Wood said. “The markets are speaking pretty loudly right now and seem to be calling into question the Fed’s strategy.”

Nearly 20% of bear markets are represented by a benchmark that has dropped 16% over the last year.

Wood suggests that stock prices are falling because of “innovative”, short-selling activity.

Wood stated, “If we’re right, shorts will have to cover. We are definitely looking forward to that moment.”

The $7.9 billion ARK Investment Fund gained 2% Tuesday trading. It is now down 57.6% year-to-date. Globally, the fund has dropped nearly 75% to its February 2021 record and is close at $34.69 in March 2020 when the pandemic coronavirus began.

General Motors Co. (NYSE:) added a position to the fund, primarily because of signs that it’s serious about electric vehicle development. This was stated by the company during Tuesday’s webinar. Tesla Inc (NASDAQ) Inc continues to be its largest position overall.

Despite losses, ARK Innovation still attracts the attention of investors. According to Lipper data, the fund received net positive inflows over the past 4 weeks. This includes $455.7 Million in net inflows for the week ended May 4.