WOOD: ADRIENNE GRUNWALD◼ FINANCE BloombergBusinessweek November 9, 2020
The tech sector is having a blistering rally
this year, and Cathie Wood has been one of
the biggest beneficiaries. The head of Ark
Investment Management has made a name for
herself as a skilled, stock-picking fund manager
at a time when almost nobody gets famous that
way anymore. Moreover, she’s done so while
managing exchange-traded funds. The vast
majority of ETFs passively track indexes of stocks.
Ark offers five actively managed U.S. ETFs, and
Wood runs all of them.
Even before the coronavirus pandemic
forced a huge portion of Americans to rely on
technologies enabling virtual work and life, Wood
made huge bets on companies working in artificial
intelligence, genomics, and gaming, among others.
She runs 3 of the 10 best-performing exchange-
traded funds so far in 2020, with her largest one,
Ark Innovation ETF, returning 86%, compared
with about 6% for the S&P 500 and 30% for the
tech-driven Nasdaq 100. The fund now manages
almost $10 billion in assets, after attracting more
than $5 billion in new money this year. One other
way Wood’s funds stand out from the ETF crowd is
cost: The five funds carry expenses of about 0.75%
of assets per year. That’s not high for active funds,
but many index ETFs these days cost less than
0.1% of assets a year, one reason for the category’s
explosive popularity.
“We’re the closest you’ll come to a venture
capital fund in the public market,” she told
Bloomberg News in August. “The way we learn
is, hey, what is the venture capital world looking
at? Is that investable now? We do what the venture
capital world does not do, we figure out the
underlying technology.”
Perhaps Wood’s biggest bet is Tesla Inc., the
Innovation fund’s top holding, at more than 10%
of assets. It’s up 400% this year. Wood’s wildly
bullish price target for the company’s stock price—
$7,000 by 2024, from $424 today—has been enough
to grab headlines by itself. “We do think Tesla has
entered exponential growth territory,” she said in
an interview in September. When Tesla plunged
that month after it wasn’t included in the S&P 500,
Wood bought more. Her logic: The company can
grow beyond making electric cars and into37● With help from Tesla, the
money manager could be
the first star of exchange-
traded funds“They’re
swinging to
the fences”