Cathie Wood and ARK Innovations; Her Perspective on Cryptocurrency and Technology.
As I scroll through LinkedIn, one of my connections posted some news regarding Cathie Wood. I knew who she was before reading the post because I follow her ARK funds which include the following: ARK Autonomous Technology & Robotics ($ARKQ), ARK next Generation Internet ($ARKW), ARK Genomic Revolution ETF ($ARKG), and ARK Innovation ETF ($ARKK).
I'll go into a summary of each of the four different sections later on. Also, for those unaware, ETF stands for "Electronically Traded Funds."
I've followed Cathie's ETFs for a year, and her position and influence in the crypto-verse is not talked about as much as the notorious Elon Musk. I beg to argue that Cathie Woods is more influential than Elon in the technology and cryptocurrency industries. I'll go into her history and how she got to where she is today, then explain her significance and recent news in the cryptocurrency industry.
---Disclaimer: I am not giving investment advice, I am only making you aware of the recent news regarding cryptocurrency so you can better understand the coin, technology, and the overall effect cryptocurrencies are currently having in the world we live in.---
Question: "Who is Cathie Wood?"
Answer: Cathie Wood is a 65-year young woman who has been one of the most influential investors of the past 3-5 years. Her interests revolve around Robotics (artificial intelligence), the internet, genome sequencing, and of course, blockchain technology. In 2018, she was a part of the Bloomberg 50, which includes individuals who are currently shaping the business world around us.
She isn't just a brilliant-minded CEO and CIO of ARK Investments; she is one of the most influential individuals in the recent bull market and ranks #80 in the Richest self-made women in the world.
Her investment strategy isn't highly bizarre; she looks for high returns in 3-5 years. When evaluating any company, she uses the Top-Down approach (She sees the big picture first, then analyzes each part into smaller sections to get better detail of the entire company). When I say Cathie wants high returns, I mean the company that she favors needs to have more than a 15% increase in value in less than half a decade.
Question: "How did Cathie Wood become all the great things listed above?"
Answer: Her education starts with her attending the University of Southern California from 1976 to 1981. In her college years, she says how the high-interest rates were crippling the economy. Right after graduation, Cathie received a position with Jennison Associates LLC as an economist. Cathie showed her potential here, but her ideas received small recognition as a new hire because of her lack of history and credibility in Jennison Associates LLC. She left to pursue her investments and shortly after was asked back to join the equity research team.
In 2001 she moved from California to New York and was positioned as the CIO of AllisonBernstien. There she got to witness the market collapse of the 2008 housing crisis. She had an idea to mitigate the losses through the crash. Cathie has thought of initiating an ETF structure for companies. Here is where her ARK Innovation idea formed.
Fast forward to 2014 when she started the ARK Innovations Investment ETFs. Like any startup company, the first few years are rough, still, after making a partnership here and meeting a venture capitalist there. ARK Innovations became what Cathie knew it could be.
Question: "What are the differences between ARKQ, ARKW, ARKG, and ARKK?"
Answer: There are slight differences; just know Cathie is BIG on the evolution of technology. I'll go into detail with the four ETFs Cathie's ARK Innovations gives the public.
--- Autonomous Technology and Robotics ($ARKQ)---
ARKQ is an active ETF that aims to achieve long-term returns in which ARK invests in technology and robotics in domestic and foreign assets. The top three companies in Cathies ARKQ ETF are Tesla (10.45%), JD.com (6.35%), and Trimble Navigation ((5.95%). Those percentages are to show how much Cathie's ARKQ ETF holds.
For example, 10.45% of an ARKQ ETF is in Tesla, with a rate of 6.35% of an ARKQ ETF invested in JD.com, and 5.95% of an ARKQ ETF supports Trimble Navigation. Those three total nearly a quarter of the ARKQ ETF position (23%).
--- Next Generation Internet ($ARKW)---
ARKW, just like ARKQ, is an active ETF interested in investing in companies revolving around technology and the internet more specifically. When viewing the list of companies in the ARKW, a few more are noticeable or where an average individual might have heard the company name.
The top three companies are Tesla (10.18%), Shopify (5.04%), and Twitter (4.47%). The holdings of an ARKW ETF are roughly 20% in these three companies.
I'll list a few more companies involved in this ETF. The names and percent position are as follows: Square (4.46%), Grayscale Bitcoin Trust (4.19%), Roku (3.99%), Spotify (3.85%), Coinbase (3.37%), Peloton(3.08%), and Zoom (2.96%).
If you add these companies together, the ARKW ETF position percentage is around 46%. Roughly half of the ETF is involved in these ten companies.
---Genomic Revolution ETF ($ARKG)---
ARK ETF is revolving around genomic medicines. What this entails is personalized medication for the unique genetic makeup of an individual's body. No one person is the same (yes, even all you identical twins out there). ARKG allows investors to gain a position in each of the leading companies in the genomic industry.
The top three companies involved in this ETF are Teladoc Health (6.89%), Exact Science Corp. (5.18%), and Care Dx (4.41%). The ARKG position in these three companies is just over 16%. This ETF seems to have more of a spread-out investment strategy than the previous two ETFs of ARK.
I know biotechnology is a booming industry because of the research done to provide a vaccine for COVID-19 in less than a year. With the proper funding, research can solve any breakdown in medication. The time frame seems to be getting shorter in developing working solutions.
I am not too familiar with the companies and their missions in the ARKG ETF. That leaves more room to educate me on what Cathie sees within these companies.
---Innovation ETF ($ARKK)---
ARK Innovations is the ETF with a sprinkle of all the above categories into one electronically traded fund. ARKK is to wrap all the top investments in each category into one nice little bundle. If you think any of the above ETFs are too industry-driven and you want diversity for the ETF portfolio, ARKK might be for you.
The top five companies in ARKK and their percentage positions are as follows: Tesla (10.25%), Teladoc Health (5.93%), Roku (5.89%), Square (4.55%), Shopify (4.34%). The ARKK percentage holdings in these five companies are 31%. Almost 1/3 of your ARKK ETF investments are within these five companies.
Now we know something about Cathie Wood and her ARK Innovations ETFs. Pretty neat stuff, right?
Question: "That's all good to know, but what does this have to do with cryptocurrency and blockchain technology?"
Answer: Cathie seems to like new and revolutionizing technology. Cryptocurrency and blockchain technology are just that.
Cathie predicted Bitcoin being worth over half a million dollars ($500,000) in the future. She believes so much in the industry she invested an additional $51 million in Coinbase. The cryptocurrency exchange had its IPO over a month ago, and that sure got Cathie's eye. I mean, she must see at least a 15% increase in the text 3-5 years.
Cathie has been facing criticism from the media for her ARK Innovation ETFs taking a downward turn in the recent months of 2021, but Cathie remains calm-headed and at ease with her investment decisions. Along with her ETFs, she notes the most recent cryptocurrency correction is healthy for the market.
I will continue to watch the news revolving around Cathie Wood and her stance on the technology market and cryptocurrency industry. I'm telling you, while most of her ETFs have Tesla as the leader in percentage position, she is more significant in the technology realm than most of the present media faces.
Stay in the shadows, Cathie Wood.
Until next time,
Seth Hinkle
Websites used for information:
Banker, The. “Who Is Cathie Wood? - Investment and Economic Evangelist Catherine Wood, CEO of ARK-Invest.” The Banker Blog, 1 Feb. 2021, thebankerblog.com/who-is-cathie-wood-investment-and-economic-evangelist-catherine-wood-ceo-of-ark-invest/#:~:text=Catherine%20Wood%20also%20famously%20known%20as%20Cathie%20Wood,of%20the%20American%E2%80%99s%20Richest%20Self-Made%20Women%20in%20Forbes.
Magazine , Forbes. “Cathie Wood.” Forbes, Forbes Magazine, www.forbes.com/profile/cathie-wood/?sh=3e1d01557360.
Zacks Investment Research. “Member Sign In.” Zacks Investment Research, 25 May 2021, www.zacks.com/funds/etf/ARKQ/profile#:~:text=ARK%20AUTONOMOUS%20TECHNOLOGY%20%26%20ROBOTICS%20ETF%20The%20ARK,robotics%20companies%20that%20follow%20theme%20of%20disruptive%20innovation.