Cathie Wood targets 20 percent ETF Returns
It was no surprise that a private equity company was seeking to take ownership of Ark Investment Management from Cathie Wood.
Anybody could see their 3-digit returns, count cash to their traded funds, and bear witness to Twitter, their increasing popularity. Except the Ark is much larger and rentable than it would seem.
Wood, Ark's CEO in a Bloomberg interview, said: "We're up to 50 billion dollars!" "We're very profitable for our business."
Ark handles retail, institutional, and non-US funds, as well as $30.5 billion in assets in its seven ETFs. markets. markets. markets. She alone accounts for an ETF turnover of $225 million annually.
Founded in 2014, Ark is part of a league of existing companies including Gamco Investors Inc. Mario Gabelli and highlights Wood's involvement with Resolute Investment Managers. A month ago, Resolute and Kelso & Co. appeared powerless when they avoided acquiring a majority stake in Ark. Now their claim is geared towards a friendly settlement that gives Wood power.
"We are in talks," she said. "It has quieted down. "We wanted our partner to be fair and placed, and things are going to work out, I think."
An official declined to comment for Resolute.
Wood has never stopped publishing some of the best statistics in money management history. The ETF returned 152% of its $16.4 billion to Ark Innovation in 2020. More than double the amount of other ETFs.
The majority of ETFs watch an index or market passively. Ark's are handled actively. Wood, 65, created an explicitly transformative tech investment business. Her team, consisting of 25 members, analyzes patterns and chooses inventories based on five subjects: artificial intelligence, robotics, energy stocking, DNA sequencing and blockchain technology.
Woodi had widespread scepticism as well as scorn about social media in August 2018, when the Innovation ETF had less than 2 billion dollars in assets, implying that Tesla Inc. shares could cross 4,000 dollars in five years. Since then, the stock has risen more than 10 times and split five to one times, making Wood a guru of the business. Although Tesla remains the leading supplier, health-driven inventories form the largest bet in the Innovations ETF collectively.
"Tesla is still in the running, but I should say that genomic space will bring the biggest upside surprises," Wood said in an interview. "That is because convergence of DNA sequencing, artificial intelligence and gene therapy, particularly the editing of Crispr genes, will cure disease."
Wood was a Bitcoin believer too, and some early profits of her money were motivated. But Ark decided it was not suitable for ETFs after discovering an adverse tax law. Bitcoin, that hit for the first time $20,000 this week, is 7 percent in some Ark accounts separately. "Extremely bullish," Wood said.
For the first time, Wood was the lead investor in global theme strategies for AllianceBernstein Holding LP for successful ETFs focused on innovative technology. ETFs trade every day and their assets are clear. They are also the main investment officer. Rather than mutual funds, they were usually less costly and tax-efficient.
She remembers the former Chief Executive Officer Peter Kraus being "very suspicious."
"We were pretty much the company that made losses, and I felt that acutely because for the first three years I funded most of them." "We have built it. They haven't been here."
Wood wanted a partner to sell Ark's goods, with no experience in ETFs and only $40 million of assets after 2 1/2 years. So Resolute took the picture. This is how. It took on a minority interest in 2016, including a control buying option.
Wood and its analysts soon formed a Twitter profile with Ark to post reporting, videos and podcasts and to ask for feedback. She attributed much of Ark's success with social media as the secret.
"This gave us a competitive advantage, because conformity departments from others will not be permitted to talk about their research by their portfolio managers or analysts," she said. "There is a virtuous cycle at work here, and a viral networking effect is also occurring."
Wood has said she is sure her investment returns will more than double in the next five years, at least 20 percent annually. Wood has won her performance as one of the few woman CEOs in finance. She refers to it as advice to other women in her profession, too. "It's better and bad that nobody can take my record from me," Wood said. "If you build one over a long period of time and succeed, it is usually a successful ticket."
Cathie Wood posted some of the best numbers in the history of money management in 2020. In this interview, the Ark Investment Management founder and chief executive officer discusses her expectations for future returns, confidence in Tesla Inc., Bitcoin and gene-editing technology, and the woulda-could-shoulda moments in her career. Wood spoke exclusively to Erik Schatzker on Bloomberg's "Front Row."