(Bloomberg) — While some of Cathie Wood’s biggest stock bets have taken a beating in recent months, the founder of Ark Investment Management LLC says she’s really concerned that her investors may be heading straight for the exits on the downward momentum.
Most Read from Bloomberg
Wood’s flagship Ark Innovation ETF (ticker ARKK) has slipped roughly 15% on the year compared with the S&P 500’s 25% gain, prompting some traders to sell. But Wood said now is actually one of the best buying periods for her strategy.
“Our concern for our clients is so significant that I get really upset when I think that they’re selling at the low or the other way around is buying into the high,” Wood said during a webinar organized by Bloomberg Intelligence and moderated by Rebecca Sin. “At the high late last year and into January and February, I was saying, ‘We’re going to have a correction, keep some powder dry, keep some powder dry.’”
In a wide-ranging discussion about the year ahead, Wood also said she is holding off on adding bets in Chinese markets amid worries about Beijing’s crackdown on some of the country’s high-profile tycoons.
China remains a “very innovative nation” but there are concerns that the recent regulatory assault on private enterprise has led to an erosion of incentives for dynamic entrepreneurs, Wood said.
“We don’t think it’s true that China is uninvestable. We’re just waiting for the valuation dust to settle and make sure the incentives for growth re-emerge,” she said.
Additionally, Wood addressed the booming industry for funds that meet higher environmental, social and governance standards — and the importance of improving disclosures to prevent managers from “greenwashing” or making misleading claims about how environmentally-friendly a fund’s holdings are.
“We do not use the acronym ESG with our portfolios, but we will tell you when we’re asked the questions that our portfolios are intrinsically ESG,” Wood said.
Citing comments from Purview Investments LLC founder and CEO Linda Zhang, Wood claimed the carbon footprint in ARKK is 10% of the S&P 500.
Other things Wood said:
-
El Salvador’s Bitcoin experiment is “very exciting” and a real use case for the cryptocurrency
-
On Elon Musk and Tesla Inc.: “Tesla wants to save us from ourselves – wants to save humanity. Elon Musk is so convinced that we need to change our ways in terms of transportation and the environment that he’s dedicated his life to it.”
-
The Global Industry Classification Standard or GICS system jointly developed by MSCI and S&P Dow Jones Indices will need to change dramatically in the coming years because technology is permeating every industry
-
“Pure” Bitcoin exchange-traded funds are likely better than futures-based ones
Most Read from Bloomberg Businessweek
©2021 Bloomberg L.P.
