Early Enthusiasm for Technology and Finance
Cathie Wood graduated with honours in economics and finance from the University of Southern California. There she met her mentor, Arthur Laffer, a renowned economist who was a consultant during the Ronald Reagan administration.
Cathie Wood got her first job at the financial services firm Capital Group from her mentor and stayed there for three years. She later moved to Jenniston Associates, where she spent the next 18 years working on her reputation as an investor.
Wood joined Alliance Bernstein in 2001 as chief economist for global thematic strategies. During the subprime crisis of 2007–2008, she managed investments that underperformed the market average, and this working relationship would continue for the next 12 years.
These results showed that their investment style is to invest in growth companies rather than value companies. This strategy leads to high volatility and high risk, which often leads to poor returns during downturns. But she was convinced by this strategy because, in her opinion, in the “collaborative economy,” everything is a give and take, so you cannot become successful alone.
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The Foundation of Ark Invest
Alliance Bernstein left to start his own fund because Cathie Wood’s ideas of investing in actively managed exchange-traded funds did not appeal.
She set up her own fund manager, Ark Invest, in 2014, which invests in disruptive companies that she believes can change the world.
In October 2014, Ark Invest launched the first of four thematic ETFs designed to invest in companies in the fields of technological innovation, genomic revolution, next-generation internet and autonomous technology and robotics.
A 3D printing ETF and an Israel tech innovation ETF are two index funds Wood manages, although it seems at odds with its investment philosophy.
Ark Invests invested in a fintech technology ETF in 2019 and a space exploration ETF in 2021. This investment strategy resulted in Ark’s flagship product returning 152% during the global health crisis, with more than $17 billion under management.
Cathie Wood has followed through on her vision to invest in breakthrough growth companies that will shape the future now that she is independent. In addition, these companies must have a growth projection within no more than five years that says they will double in value.
Wood has been outspoken in support of everything that is shaping the future, including cryptocurrencies, artificial intelligence, renewable energy, human DNA, robotics, 3D printing, and even space exploration.
She herself has stated that although her investment style seems risky today, it is basically not very different from Warren Buffett’s, except that he focuses on finding companies that are valuable today, while she focuses on finding companies that will be valuable tomorrow.
With a fortune of 140 million dollars, Cathie Wood currently invests in innovations such as self-driving cars, genomics, telecommunications, or finance.
Over the past five years, her main fund, the Ark Innovation Fund, with $23 billion in assets, has been able to generate an average annual return of almost 45%.
