As far as investment managers go, Cathie Wood is both an outlier and an insider. She runs a $60 billion dollar firm, Ark Investment Management, and while the fund has been a smaller player in past years, the firm has AUM of over $60 billion as of February 2021. Her rapid growth comes on the heels of a growing popularity and a willingness to ride trends that passive funds would not be willing to take advantage of.
Ark’s focus is ETFs, giving her the structure and reputation to manage the portfolio actively, and in full transparency. The firm, and Wood in particular is known for her bold and confident convictions, and she’s on the record as a contrarian on a number of investment opinions. ARK has gone from being an arguably middling player in 2020 to being the seventh largest exchange-traded fund issuer in the $5.9 trillion industry. This time last year, Ark was managing $3.6 billion in ETF assets.
With fresh inflows of cash, comes the need for fresh ideas, and at this unrelenting pace, Cathie Wood is moving to generate as many ideas as possible. Recently, she’s had some opinions about the red-hot markets and where there might be a bubble. While consensus in some circles seems to be that equities are overvalued and verging on or already sitting in bubble territory, Wood has some other ideas.
Two big takeaways from a recent interview were her view that it is fixed income that is in a bubble, not equities, as equity outflows have been quite consistent since 2008/2009 and that money has been flowing into the fixed income space for some time. The other was that contrary to there being a bubble, she sees healthy equity growth ahead. Her take? Massive stimulus, positive profit expectations, and copper will drive growth for 2021 and beyond.
Cathie Wood knows a thing or two about mining, and tech metals in particular. She has a track record of picking innovative companies for her $28 billion ARK Innovation ETF that is up more than 24% YTD. The ARK Autonomous Technology and Robotics ETF is up 29% so far this year, proving her knowledge and skill in the tech sector is not just a fluke.
In a March 3rd Reuters article about her interview on Benzinga’s YouTube channel, Cathie is noted to be bullish on Tesla for the time being and seemingly far into the future. Her view is that the company founded and headed by Elon Musk is a leader for the autonomous vehicle space, and as such she’ll be keeping the company in her Ark Innovation fund’s portfolio. Tesla accounts for roughly 10% of the fund’s portfolio, proving her confidence in the electric-vehicle maker and its CEO Elon Musk.
Her overarching view on tech and innovation continues when it comes to metals, as she selects it as one of her top areas for growth this year. Wood’s focus on the tech industry and electric vehicle makers gives her the insights into what those companies and industries will demand over the coming years, including valuable metals like copper.
The red metal has been on a tear lately, benefitting miners around the world, and as demand increases for copper from tech companies, parts suppliers, and battery makers, copper miners will be increasing production while reaping the rewards of the higher prices.
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|Lincoln Minerals Limited