Cathie Wood's Ark Innovation ETF is down 10% this week, nearing new low for the year

Star fund manager Cathie Wood’s flagship fund is getting hit this week and seeing big investor outflows amid a sell-off.

Shares of Ark Innovation dropped about 3% on Thursday, bringing its weekly losses to more than 10%. The “disruptive innovation” ETF bounced off its February low of the year earlier in the session, a level that many investors are watching as a barometer for the larger tech sector.

Nearly $770 million has left Ark Innovation in the last week. Ark Invest — including its five core ETFs — has lost about $1.1 billion in investor dollars in the past seven days, according to FactSet.

Ark Innovation is more than 32% off its high in February of 2021 after which the ETF spiraled on concerns about rising interest rates. Some of Ark Innovation’s top holdings were took big hits on Thursday. Teladoc Health dropped 3.2%. Square and Roku fell 3.4% and 6.6%, respectively. DraftKings declined 7.6%.

Many investors view Wood’s funds as a proxy for the growth pockets of the market. Weakness of this kind in the absence of an obvious excuse like rising rates could be worrisome to certain market participants. Plus, technology stocks delivered blowout earnings last week, yet the company’s stocks appeared to have the “good news” priced in.

Wood, as usual, is staying the course during the weakness in her top names. Ark Innovation bought DraftKings, Twilio, Teladoc Health and Invitae on Wednesday. Ark Next Generation Internet ETF purchased 140,000 shares of Peloton on Wednesday after it fell about 15% due to its treadmill recall debacle.

Wood is steadfast in her long-term investing philosophy and takes advantage of the volatility to double down on her highest conviction picks. Ark Invest’s chief operating officer, Tom Staudt, has told CNBC that Ark’s “long-term focus allows us to buy if a name has been hit for short-term reasons or sell if a name is up on short-term exuberance.”

Wood’s other ETFs also experienced intense selling pressure on Thursday. The Ark Next Generation ETF lost 2.75%, bringing its week-to-date losses to more than 9%. The Ark Genomic Revolution ETF and the Ark Autonomous Technology and Robotics ETF fell 2.7% and 0.3%, respectively. The pair are down 10.2% and 4.4% this week alone. The Ark Fintech Innovation ETF dropped 2%, bringing its losses for the week to more than 6.5%.

The Ark Autonomous Technology and Robotics ETF is Wood’s only fund in the green for the year.

Cathie Wood will appear on CNBC’s “Closing Bell” on Friday at 3 p.m. ET.