On Friday, star stock picker Cathie Wood's ARK Innovation ETF (ARKK.P) fell more than 7% and hit its lowest level since November 2020, as investors sold high-growth, high-valuation stocks that rallied during the early stages of the pandemic as bets on a more aggressive Federal Reserve pushed investors to sell high-growth. These high-valuation stocks rallied during the early stages of the pandemic.

The losses in ARK's portfolio were extensive, with nine of its top ten holdings falling while the S& P 500 fell 1.3 percent due to a selloff in technology firms. It's largest holding, Tesla Inc (TSLA.O), was down nearly 4%, while Teladoc Health Inc (TDOC.N), its second-largest holding, fell 5.2 percent.

ARK, which outperformed all other U.S. equity funds last year thanks to its large holding in "stay at home" stocks, is down 25% in the previous month. Investors are increasingly expecting the Federal Reserve to hike interest rates this year, putting downward pressure on growth equities by discounting their future cash flows.

Friday's losses may have been aided by a U.S. employment report showing that the economy added 210,000 jobs last month, lowering the unemployment rate to 4.2 percent, a 21-month low.

"Ultimately, the lower unemployment rate could help build confidence that the economic growth we've been seeing will continue regardless of what happens with Omicron," said Jim Paulsen, chief investment strategist at the Leuthold Group. "This will push investors out of stay-at-home and technology trades and into small-caps and cyclical."

Chairman Jerome Powell of the Federal Reserve stated on Tuesday that the central bank is open to speed up the pace of its tapering program, effectively eliminating its support for the economy sooner than expected.

Following Friday's losses, the ARK Innovation fund is now down 24.5 percent for the year, far behind the benchmark S& P 500's almost 20% increase.

For example, Roku Inc (ROKU.O) plummeted 4.1 percent on Friday, bringing its year-to-date loss to over 40%, while Spotify Technology SA (SPOT.N) dipped 1.4 percent, bringing its year-to-date loss to 28.3 percent.

ARK Invest did not respond to a request for comment.