Cathie Wood, founder of the investment management firm Ark Investment Management, at the center of attention in the last year for its bullish views on Tesla and Bitcoin, it confirms itself as an inexhaustible source of ideas, and produces a new ETF: it is called Ark Investment Management’s Transparency ETF, and is a new ESG ETF that, as the name implies, will focus on transparency, replicating an index comprising 100 stocks.
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The ETF, based on the documentation filed by Ark, will replicate an index that excludes banks, alcohol producing companies, active in the betting and Oil & Gas sectors.
No to banks, alcohol, Oil & Gas: Wood’s new ETF
Rather, the ETF’s top bets will be stocks from consumer products and hi-tech companies such as Salesforce, Microsoft, Apple, Nike, Chipotle Mexican Grill e Tesla.
“It will be like having the Ark version of an ESG fund ”, commented Eric Balchunas di Bloomberg Intelligence, referring to those products that follow higher standards in an environmental, social and governance sense. “It is something that intrigues, since there is no moral intent, but rather the intention to pursue transparency, which will probably invite the purchase of good companies ”.
Among the successes of Cathie Wood, it is worth mentioning the boom, in 2020, of its ETF funds, first in the ranking of the best ETF funds of 2020, thanks in particular to the Tesla miracle.
On the other hand, Catherine Wood (or even Cathie Wood), founder, CEO and investment director of Ark Invest, in October 2020 had been very clear towards Tesla, expressing full confidence in the electric car giant founded by Elon Musk . Wood equated Tesla to the Amazon of 20 years ago, and slated for the title a rally of up to $ 15,000.
Regarding the latest ETF ESF news, Ark has not yet responded to Bloomberg’s request for comment.
The news agency reminds that, if approved, the ETF will be the second launched by Cathie Wood’s empire in the course of 2021, after the one launched in March, specializing in space investments. That fund has risen about 4% since its debut and now has assets worth over $ 600 million.
As for Ark’s other ETFs, the miracle of 2020 did not repeat itself. Ark Innovation ET has lost 2% since the beginning of 2021, clearly underperforming US equities, as the S&P 500 h index gained more than 20% since the beginning of the year. In the middle of the year, but even earlier, it was evident that Tesla was no longer making the fortune of Wood’s funds.
Bloomberg recalls, with regard to the new ETF that Ark is preparing to launch, that Wood herself has always promoted transparency, to the point of never having any hesitation in revealing her bets on equities: the number one of the management giant Investments has always insisted that the ads would not harm his strategies but, rather, would allow his funds to cashing in more confidence from potential buyers. Will transparency, now channeled into an ETF, still pay off?
Some will be amazed at the manager’s choice to opt for one passive strategy for your new fund, as Wood is known, among other things, for launching a revolution in the world of funds with active ETFs.
But one of its passive products, the 3D Printing ETF, is reporting good performance for example.
The new fund on transparency, it is pointed out, will join the others eight Ark ETFs, six of which are active, compared to two that passively track the indices.
Ark currently has $ 45 billion in its ETFs, confirming it the 11th largest ETF issuer in the United States.
There is no shortage of concerns about the new fund:
“An index-based ESG ETF does not necessarily classify itself as a promoter of disruptive innovation, as Ark itself tends to say – commented Nate Geraci, general manager of ETF Store – It will be very interesting to see how (Wood) approaches the marketing of this ETF, given that the strategy seems to conflict with companies like Tesla and DraftKings, large core holdings present in Ark’s other ETFs ”.