ARK invest had an unbelievably bullish run in 2020, blazing past returns of 150% with its flagship fund (ARKK).
Founder Cathie Wood has become a bit of an internet celebrity over the last few years. The appeal to Cathie Wood stems not just from her ability to invest money – but for the reasons she does it.
Many investors resonate with her vision for the future. They see a world defined by disruptive innovation.
This article puts Cathie Wood’s vision into perspective and explores the unlikely success story of ARK invest.
Who Is Cathie Wood?
Before founding ARK, Cathie Wood worked as an intern at a fund called Capital Group in 1977. She got her start with research projects that observed the economy over a long period of time – up to 20 years in some cases.
It was perhaps during these early days that Cathie built her philosophy for long-term investing.
Cathie Wood founded ARK invest in January 2014. Her mission was simple: find the companies primed for disruptive innovation and sort them into investable funds.
She is known for making very large investments into select companies that ARK believes in. Tesla is a good example of this.
Cathie has been a vocal advocate of Tesla since its early days. At this time it’s still the largest holding in the flagship (ARKK) ETF. ARK continues to invest into the companies they own and they tend to stay calm in the face of fluctuating market conditions.
Cathie began breaking into the mainstream in 2020. It was during this time that she landed in Forbes as “America’s Self-Made Woman.” That same year Cathie Wood net worth skyrocketed to an estimated $250 million.
The ARK Invest Strategy
ARK is known for using a bottom-up approach to pick winning stocks. They start by looking across sectors and they narrow down segments of the market. Electric vehicles are one of their favorites, but ARK also invests into blockchain, genomics, and artificial intelligence.
Here’s a list of all the ARK invest ETFs:
- Ark Genomic Revolution ETF (ARKG)
- Ark Innovation ETF (ARKK)
- Ark Fintech Innovation ETF (ARKF)
- Ark Next Generation Internet ETF (ARKW)
- Ark Space Exploration & Innovation ETF (ARKX) …
- Ark Autonomous Technology & Robotics ETF (ARKQ)
To understand Cathie Wood, you need to know why she’s obsessed with disruptive innovation.
ARK defines this type of innovation on their website as a, “Technologically enabled product or service that changes an industry by creating simplicity and accessibility while driving down costs.”
Their theory poses that the most innovative companies will be the ones who gain the majority market share. This strategy takes place over a long period of time – as you probably guessed by now.
Those businesses need time to innovate, grow, and then potentially capture a greater market share. Cathie has mentioned viewing many investments on a 5 to 10-year timeline, like in this interview with CNBC.
This philosophy has served ARK well over the past few years, but only time will tell if it comes to complete fruition.
The ARK invest portfolio will continue to be of interest to investors in 2022.
ARK ETFs have lost traction so far this year, but I don’t anticipate that to scare them. Cathie Wood has seen many ugly days in the stock market since her beginnings in 1977.
Whatever happens to ARK invest, their rapid rise to fame will live on in history.