Michael D’Angelo, Staff
Founder, Chief Executive Officer and Chief Investment Officer of ARK Invest, Cathie Wood (pictured above), is known on the street as a star stock-picker.
Chances are if you are a retail or an institutional investor you probably hold long positions in exchange traded funds (ETFs) or equities relating to the technology industry. Many investors want to chase the next hot technology company that is going to change the world while, preferably, garnering high returns. Some retail investors do not have the time, knowledge, energy and/or skill to pick their own individual stocks. Instead of picking stocks by themselves, investors turn to institutional fund managers to pick heavy stocks for them. Investors will purchase ETFs and mutual funds which track tech companies’ performance.
Many institutional fund managers create ETFs dedicated to following tech companies. A major ETF which tracks the tech heavy NASDAQ composite, QQQ is managed by Invesco. Vanguard manages VGT which focuses on information technology and State Street manages multiple funds dedicated to tracking various tech stocks’ market performance.
The newest fund manager from the street to popularize tech fund management is Cathie Wood at Ark Investment Management, LLC. Wood is the real deal with managing portfolios. She holds the title of CEO and CIO of Ark Investment Management LLC. In the past, Wood worked as an assistant economist with the Capital Group in the late 70s, then as a managing director for Jennison Associates LLC and then as a limited partner for Tupelo Capital Services. Later she worked as a Chief Investment Officer at Alliance Bernstein. Wood joined ARK investment Management in 2014 and, as mentioned above, she holds the title of CEO and CIO. Wood certainly has plenty of experience in the industry and her fund returns are impressive.
Wood managed the largest actively managed ETF in 2020 which is the Ark Innovation ETF. The ticker symbol of the ETF is ARKK. ARKK’s objective is to seek an increase in long-term capital growth by investing at least 65% of the company’s assets in American and foreign tech equities that will change the world around us. Ark calls world-changing equities, a “disruptive innovation.”
Wood has been crushing the game since 2016 with the Ark Innovation ETF. A quick look at the prospectus for ARKK reveals the ETF returned at market value 66.47% for the year ended on July 31st, 2020. In 2019, the total market return was 12.27%, 52.38% in 2018, 43.72% in 2017, 4.9% in 2016 and from October 31st, 2014 to August 31st, 2015, the return was 0.50%. As of December 31st, 2020, ARKK’s top 10 holdings were Tesla (10.8%), Roku (6.9%), CRISPR Therapeutics (5.5%), Square (5.3%), Teladoc Health (4.4%), Invitae Corp (4.1%), Zillow (3.1%), Pure Storage (2.8%), Proto Labs (2.8%) and Spotify (2.7%). ARKK closed January 26th at $141.38.
Ark maintains other actively managed ETFs like Ark Next Generation Internet ETF (ARKW), ARK Fintech Innovation ETF (ARKF), ARK Genomic Revolution ETF (ARKG), ARK Autonomous Technology and Robotics ETF (ARKQ), the 3D Printing ETF (PRNT) and ARK Israel Innovative Tech ETF (IZRL). All of these ETFs are dedicated to finding innovative companies with the objective of changing their respective industry and the world.
Wood still has time to prove her stock picking skills and to return more money to her shareholders. Wood has expressed interest in creating a bitcoin ETF after bitcoin hits a $2 trillion market capitalization, and she has further expressed intent on creating an ETF dedicated to following space companies. The future is looking bright for both ARK and Wood. Time will only be able to tell the success of these companies and the bullish tech attitude of their founder.