Ark Invest

Last updated

ARK Investment Management LLC
Company type Privately held company
Industry Asset management
Founded2014;10 years ago (2014)
Founder Cathie Wood
Headquarters St. Petersburg, Florida
Key people
Cathie Wood, CEO
Products Exchange-traded funds
AUM Decrease2.svg $6.71 billion [1]
Owner
Number of employees
45 [2]
Website ark-invest.com

ARK Investment Management LLC (commonly referred to as "ARK" or "ARK Invest") is an American investment management firm based in St. Petersburg, Florida, that manages several actively managed exchange-traded funds (ETFs). [3] It was founded by Cathie Wood in 2014. [4] [5] At the height of February 2021, the company had US$50 billion in assets under management. [6] As of October 2023, assets had dropped to $6.71 billion, after a period of poor performance. [7]

Contents

History

In 2014, after Cathie Wood's idea for actively managed exchange-traded funds based on disruptive innovation was deemed too risky by AllianceBernstein, where she was chief investment officer of global thematic strategies, she left and founded Ark Invest. The company is named after the Ark of the Covenant. [8] Wood, a devout Christian, was reading the One-Year Bible at the time of founding. [8] It is also a backronym for Active Research Knowledge. [9] [10]

In October 2014, the company launched its first four active funds: the Innovation ETF, the Genomic Revolution ETF, the Next Generation Internet ETF and the Autonomous Technology & Robotics ETF. These were followed by the Fintech Innovation ETF in 2019 and the Space Exploration & Innovation ETF in 2021. [11] [12]

In 2017, Nikko Asset Management acquired a 15% stake in ARK following the success of a Global Fintech Equity Fund it partnered with ARK to launch in 2016. [13] [14] As part of the deal, Nikko has exclusive rights to offer ARK products and investment strategies in Japan and the broader Asia-Pacific region. [14]

The company also maintains two index funds: the 3D Printing ETF, launched in 2016, and the Israel Innovative Technology ETF, launched in 2017. It formerly maintained the Transparency ETF, launched in 2021. [15] [16] In July 2022, ARK announced that it would shutter the Transparency ETF (CTRU), effective July 31, 2022, after it was notified that Transparency Global would stop calculating the Transparency Index. [17]

In November 2020, Resolute Investment Managers announced it would exercise its option to acquire a majority stake in the company. [18] [19] [20] However, in December 2020, Cathie Wood repurchased the option, maintaining control of the company, while continuing to use Resolute's distribution services, obtaining financing from Eldridge Industries. [21] [22] Resolute Investment remains a minority shareholder. [23] [24]

In December 2020, the Innovation ETF became the largest actively managed ETF, with $17 billion in assets under management and a 170% return in 2020. [25] [26] On January 11, 2021, the company became one of the top 10 issuers of exchange-traded funds. [27]

In June 2021, the firm filed to create a bitcoin ETF under the ticker ARKB, pending approval of the SEC, which had yet to approve any ETF based on the asset. [28] They re-filed to launch the spot bitcoin ETF in the US on April 25, 2023; it was approved on January 10, 2024, and began trading the following day. [29] [30]

In October 2021, the firm moved its office from New York City to St. Petersburg, Florida. [31]

Investment strategy

ARK Invest focuses on investing in disruptive technology. [32] These technologies include artificial intelligence, DNA sequencing, CRISPR gene editing, robotics, electric vehicles, energy storage, fintech, 3D printing and blockchain technology. It has also invested in cryptocurrencies. The company invests in stocks it projects to double in value over a five-year period. [33]

On November 22, 2022, Cathie Wood stated her $1 million bitcoin price by 2030 during an interview on Bloomberg TV. On that date, November 22, 2022, Bitcoin closed at $16,174; so, Bitcoin's price must increase 61 fold over the next 8 years to reach the $1M price target. [34] [35] [36]

From 2014 to 2021, the ARK Innovation ETF averaged an annual 39% return on investment, over three times the return of the S&P 500 during that time. [37] Street.com published on December 9, 2022: "Ark innovation ETF has dropped 63% so far in 2022 and is down 78% from its February 2021 peak. Wood has defended her strategy by noting that she has a five year investment horizon." [38]

As its funds cannot hold cash, the firm also invests in numerous Big Tech stocks it refers to as "cash-like innovation stocks". [39]

ARK publishes current analyses, transactions and portfolios, and also opens its research reviews to the public. In addition to financial analysts, ARK employs scientists and computer scientists, believing they can better assess the impact of disruptive technologies. [40] [41] [42] Most of the company's analysts are millennials without prior Wall Street experience. [43]

Risks

Critics such as James Grant and Jason Zweig warn that investors chasing outsized returns by investing in ARK ETFs may be disappointed, as "hot" funds and thematic ETFs generally cannot sustain their performance. [37]

The flagship ARK Innovation ETF has received accolades for its performance in 2017, 2020 and 2023, but is also considered by Morningstar to be the third highest "wealth destroyer" investment fund from 2014–2023, losing US$7.1 billion of shareholder value in ten years. [44] The ARK Innovation ETF was down 24% for the year 2021. [45] The Short Innovation ETF launched in November 2021 as the first ETF in the United States to provide inverse exposure to another ETF, using swap contracts to provide returns on a single-day basis inverse to the ARK Innovation ETF. [46]

Morningstar noted concerns over ARK's sizable ownership in several of its smaller holdings. [47] [48]

Funds

ARK Invest managed or manages the following exchange-traded funds: [49]

Fund nameTickerTypeCreated
Innovation ETF NYSE Arca :  ARKK Active 2014
Next Generation Internet ETF NYSE Arca :  ARKW Active2014
Genomic Revolution ETF CBOE :  ARKG Active2014
Autonomous Technology & Robotics ETF CBOE :  ARKQ Active2014
Fintech Innovation ETF NYSE Arca :  ARKF Active2019
Space Exploration & Innovation ETF CBOE :  ARKX Active2021
The 3D Printing ETF CBOE :  PRNT Index-based 2016
Israel Innovative Technology ETF CBOE :  IZRL Index-based2017
Transparency ETF CBOE :  CTRU Index-based2021 (closed 2022)
Bitcoin ETF CBOE :  ARKB Index-based2024

In September of 2022 ARK launched the ARK Venture Fund [50] , a venture capital investment fund which is separate from their exchange-traded funds.

Related Research Articles

Passive management is an investing strategy that tracks a market-weighted index or portfolio. Passive management is most common on the equity market, where index funds track a stock market index, but it is becoming more common in other investment types, including bonds, commodities and hedge funds.

<span class="mw-page-title-main">Fidelity Investments</span> American multinational financial services corporation

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), is an American multinational financial services corporation based in Boston, Massachusetts. Established in 1946, the company is one of the largest asset managers in the world, with $4.9 trillion in assets under management, and, as of December 2023, $12.6 trillion in assets under administration. Fidelity Investments operates a brokerage firm, manages a large family of mutual funds, provides fund distribution and investment advice, retirement services, index funds, wealth management, securities execution and clearance, asset custody, and life insurance.

An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars. Many ETFs provide some level of diversification compared to owning an individual stock.

The Vanguard Group, Inc. is an American registered investment advisor based in Malvern, Pennsylvania, with about $7.7 trillion in global assets under management, as of April 2023. It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares. In addition to mutual funds and ETFs, Vanguard offers brokerage services, educational account services, financial planning, asset management, and trust services. Several mutual funds managed by Vanguard are ranked at the top of the list of US mutual funds by assets under management. Along with BlackRock and State Street, Vanguard is considered to be one of the Big Three index fund managers that play a dominant role in corporate America.

<span class="mw-page-title-main">Franklin Templeton Investments</span> Global investment firm founded in New York City in 1947

Franklin Resources, Inc. is an American multinational holding company that, together with its subsidiaries, is referred to as Franklin Templeton; it is a global investment firm founded in New York City in 1947 as Franklin Distributors, Inc. It is listed on the New York Stock Exchange under the ticker symbol BEN, in honor of Benjamin Franklin, for whom the company is named, and who was admired by founder Rupert Johnson Sr. In 1973, the company's headquarters moved from New York to San Mateo, California.

<span class="mw-page-title-main">PIMCO</span> US global investment management firm

Pacific Investment Management Company, LLC is an American investment management firm focusing on active fixed income management worldwide. PIMCO manages investments in many asset classes such as fixed income, equities, commodities, asset allocation, ETFs, hedge funds, and private equity. PIMCO is one of the largest investment managers, actively managing more than $2 trillion in assets for central banks, sovereign wealth funds, pension funds, corporations, foundations and endowments, and individual investors around the world. According to the Sovereign Wealth Fund Institute, PIMCO is the 6th-largest asset manager in the world by managed AUM.

<span class="mw-page-title-main">BlackRock</span> American investment company

BlackRock, Inc. is an American multinational investment company. Founded in 1988, initially as an enterprise risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager, with US$10 trillion in assets under management as of December 31, 2023. Headquartered at 50 Hudson Yards in Midtown Manhattan, New York City, BlackRock has 78 offices in 38 countries, and clients in 100 countries. BlackRock is the manager of the iShares group of exchange-traded funds, and along with The Vanguard Group and State Street, it is considered to be one of the Big Three index fund managers. Its Aladdin software keeps track of investment portfolios for many major financial institutions and its BlackRock Solutions division provides financial risk management services. As of 2023, BlackRock was ranked 229th on the Fortune 500 list of the largest United States corporations by revenue.

Dimensional Fund Advisors, L.P. is a privately-owned investment firm headquartered in Austin, Texas. Dimensional was founded in Brooklyn in 1981 by David Booth, Rex Sinquefield and Larry Klotz. The company has affiliates within 15 offices in the U.S., Canada, U.K., Germany, Netherlands, Australia, Singapore, and Japan. Dimensional maintains additional U.S. offices in Charlotte, North Carolina and Santa Monica, California.

<span class="mw-page-title-main">PGIM</span> American Investment Management firm

PGIM, Inc. (PGIM), formerly known as Prudential Investment Management, functions as the asset management arm of Prudential Financial, an American life insurance company.

AdvisorShares Investments is a US-based investment management firm based in Bethesda, Maryland which offers actively managed exchange-traded funds (ETFs) through the AdvisorShares Trust. AdvisorShares partners with third party financial advisers who already manage clients’ assets to package their investment strategy using exchange-traded funds. As part of promoting its funds it also provides educational support to help financial advisors and investors understand actively managed ETFs and their underlying investment strategies.

<span class="mw-page-title-main">Global X ETFs</span>

Global X ETFs is a New York-based provider of exchange-traded funds that facilitates access to investment opportunities across the global markets. Founded in 2008, it has approximately $40 billion in managed assets, across more than 80 different products. The ETF issuer and manager is widely known for its Thematic Growth, Income and International product suites, in addition to its Core, Commodities and Alpha strategies. In July 2018, the company was acquired by Mirae Asset Global Investments.

<span class="mw-page-title-main">Digital Currency Group</span> American venture capital company

Digital Currency Group (DCG) is a venture capital company focusing on the digital currency market. It is located in Stamford, Connecticut. The company has the subsidiaries Foundry, Genesis, Grayscale Investments, and Luno. It also formerly owned CoinDesk.

Thematic investing is a form of investment that aims to identify macro-level trends and the underlying investments that stand to benefit from the materialisation of those trends. Thematic investing aims to seize opportunities arising from megatrends likely to shape the global economy in the decades ahead.

<span class="mw-page-title-main">Cathie Wood</span> American investor and businesswoman

Catherine Duddy Wood is an American investor and founder, CEO and CIO of Ark Invest, an investment management firm.

Pantera Capital is an American hedge fund and venture capital firm focused on digital assets headquartered in Menlo Park, California. The fund specializes in cryptocurrencies and blockchain technology. It is one of the largest digital asset funds in the world by managed assets.

The Tuttle Capital Short Innovation ETF (SARK) is an American inverse exchange-traded fund (ETF) listed on the Nasdaq. The ETF launched in November 2021 and is designed to provide returns inverse, on a daily basis, of the ARK Innovation ETF (ARKK), an actively managed ETF by Cathie Wood's Ark Invest. It is the first ETF in the United States to provide inverse exposure to another ETF. It uses swap contracts rather than short selling to achieve inverse exposure to ARKK.

Grayscale Investments is an American digital currency asset management company and subsidiary of Digital Currency Group founded in 2013 and based in Stamford, Connecticut.

Samsung Asset Management Co., Ltd. is a South Korean asset management company headquartered in Seoul, South Korea, and a subsidiary of the Samsung Life Insurance. It is the largest asset management company in South Korea.

VanEck is an American investment management firm headquartered in New York City. The firm is primarily engaged in issuing exchange-traded fund (ETF) products although it also deals with mutual funds and separately managed accounts for institutional investors. It was a pioneer of investing in foreign growth stocks as well as gold investing.

<span class="mw-page-title-main">Nikko Asset Management</span> Japanese multinational investment company

Nikko Asset Management is a Japanese multinational investment company. It is one of the largest asset managers globally with about $220 billion under management as of December 2023. Currently Japan's third largest manager, Nikko aims to grow its funds under management to $415 billion by 2032.

References

  1. "ARKK Total Assets Under Management". ycharts.com. Retrieved October 4, 2023.
  2. "Meet the ARK Team". ark-invest.com. Retrieved October 4, 2023.
  3. Schatzker, Erik (December 18, 2020). "Tesla, Bitcoin Bull Cathie Wood Targets 20% ETF Returns" . Bloomberg News .
  4. Fitzgerald, Maggie (December 23, 2020). "Cathie Wood's ARK Innovation becomes largest actively managed ETF, amid 170% 2020 return". CNBC . Archived from the original on January 19, 2021.
  5. Cuccinello, Hayley C. "'Go For It': America's Richest Self-Made Women On Founding Businesses After 40" . Forbes . Archived from the original on January 19, 2021.
  6. Ballentine, Claire (February 5, 2020). "Cathie Wood Amasses $50 Billion and a New Nickname: 'Money Tree'" . Bloomberg News . Archived from the original on February 19, 2021.
  7. Agnew, Harriet (December 21, 2022). "Cathie Wood's Ark sheds almost $50bn in assets since 2021 peak". Financial Times. Retrieved March 5, 2024.
  8. 1 2 So, Dorothy (March 3, 2021). "Cathie Wood: religious, Reddit hit, Trump supporter? Meet Ark Invest's rock star stock picker who even has her own merchandise". South China Morning Post .
  9. "FAQs". Ark Invest.
  10. Norton, Evie Liu and Leslie P. "ARK's Cathie Wood Disrupted Investment Management. She's Not Done Yet". www.barrons.com. Retrieved April 22, 2021. "Wood named it for the Ark of the Covenant, a chest that in Jewish and Christian tradition holds the tablets bearing the Ten Commandments, although she told clients later that it was an acronym for Active Research Knowledge."
  11. "ARK Investment Management Launches Two Additional Thematic Active Equity ETFs" (Press release). PR Newswire. October 31, 2014.
  12. Best, Paul (March 30, 2021). "Cathie Woods' Ark Investment launches Space ETF". FOX Business .
  13. "Stefanie Drews president of Nikko Asset Management discusses ETFs and their 10-year growth plan on ETF TV". ETF TV. Retrieved May 6, 2024.
  14. 1 2 Appell, Douglas (August 4, 2017). "Nikko Asset Management takes 15% stake in ETF boutique ARK Investment Management". Pensions and Investments. Retrieved May 6, 2024.
  15. "ARK Investment Management Launches The 3D Printing ETF (PRNT) On The BATS ETF Marketplace" (Press release). PR Newswire. July 19, 2016.
  16. "ARK Launches 'Transparency' ETF". www.yahoo.com. Retrieved December 9, 2021.
  17. Bell, Heather. "ARK to Close Transparency-Themed ETF". Yahoo! Finance. Yahoo. Retrieved December 15, 2022.
  18. "Resolute to take majority ownership of ARK Investment Management". Pensions & Investments. November 13, 2020. Archived from the original on February 4, 2021.
  19. Ballentine, Claire (November 16, 2020). "Cathie Wood's ARK Invest Rocked as Shareholder Seeks Control" . Bloomberg News .
  20. Liu, Evie (November 18, 2020). "Cathie Wood Might Lose Control of ARK, the Company She Founded" . Barron's . Archived from the original on December 30, 2020.
  21. Ballentine, Claire (December 28, 2020). "Cathie Wood Buys Back Option That Had Threatened Control of Ark" . Bloomberg News . Archived from the original on December 29, 2020.
  22. Liu, Evie (December 30, 2020). "ARK Founder Cathie Wood Will Retain Control of the Firm" . Barron's . Archived from the original on January 15, 2021.
  23. Fox, Matthew. "Cathie Wood retains majority ownership of ARK Invest following bid for control by minority shareholder". Business Insider . Archived from the original on February 4, 2021.
  24. "ARK Investment Management and Resolute Investment Managers Reaffirm Long-term Partnership" (Press release). Business Wire. December 28, 2020. Archived from the original on January 28, 2021.
  25. Fitzgerald, Maggie (December 23, 2020). "Cathie Wood's ARK Innovation becomes largest actively managed ETF, amid 170% 2020 return". CNBC . Archived from the original on January 19, 2021. Retrieved January 20, 2021.
  26. Ballentine, Claire; Greifeld, Katherine (December 11, 2020). "Cathie Wood Takes Crown From JPMorgan for Largest Active ETF" . Bloomberg News . Archived from the original on January 28, 2021.
  27. Ballentine, Claire; Raimonde, Olivia (January 11, 2021). "Cathie Wood's ARK Joins Top 10 ETFs With Tesla-Heavy Fund" . Bloomberg News . Archived from the original on January 29, 2021.
  28. Fitzgerald, Maggie (June 28, 2021). "Cathie Wood's Ark Invest to create a bitcoin ETF under the symbol 'ARKB'". CNBC. Retrieved August 11, 2021.
  29. "ARK 21Shares Bitcoin ETF Application - ETF Details". en.coinotag.com. August 31, 2023. Retrieved October 4, 2023.
  30. Sahadi, Jeanne (January 10, 2024). "SEC gives bitcoin ETFs the green light | CNN Business". CNN. Retrieved January 11, 2024.
  31. Charles Riley (October 7, 2021). "Cathie Wood's Ark Invest is quitting Wall Street and moving to Florida". CNN. Retrieved October 9, 2021.
  32. "The Best Stock Picker of 2020 Wins With Disruptive DNA" . Bloomberg News . December 31, 2020.
  33. Volatility, Skepticism, Retail vs. Institutional Investors | ITK with Cathie Wood , retrieved April 3, 2021. Event occurs at 1:21.
  34. "Bitcoin Price". Markets Insider. Insider Inc. Retrieved December 15, 2022.
  35. "Why Cathy Wood Trusts Crypto Despite FTX Collapse". Bloomberg.com. Bloomberg L.P. Retrieved December 15, 2022.
  36. "Bitcoin Price". Markets Insider. Insider Inc. Retrieved December 15, 2022.
  37. 1 2 Zweig, Jason (February 5, 2021). "Cathie Wood Has Wall Street's Hottest Hand. Maybe Too Hot" . The Wall Street Journal . ISSN   0099-9660.
  38. Weil, Dan. "A Look Back at Cathie Wood's Disastrous Year". TheStreet.com. The Arena Group. Retrieved December 15, 2022.
  39. Stevens, Pippa (May 7, 2021). "Cathie Wood loves the setup for her stocks after sell-off, expects big returns from her strategies". CNBC. Retrieved August 11, 2021.
  40. Ballentine, Claire (September 26, 2020). "Secret Sauce Behind ARK's Success Is Cathie Wood's Diverse Team" . Bloomberg News . Archived from the original on November 20, 2020.
  41. "ARK Investment Management LLC Celebrates Five Years Of Disruptive Innovation Investing" (Press release). PR Newswire. January 24, 2019. Archived from the original on February 4, 2021.
  42. Alster, Norm (October 8, 2020). "A New Kind of Fund That Is Stingier With Information" . The New York Times . ISSN   0362-4331. Archived from the original on January 29, 2021.
  43. Liu, Evie (March 8, 2021). "ARK's Cathie Wood Disrupted Investment Management. She's Not Done Yet" . Barron's .
  44. "15 Funds That Have Destroyed the Most Wealth Over the Past Decade". Morningstar, Inc. February 2, 2024. Retrieved February 8, 2024.
  45. Fitzgerald, Maggie. "Sell-off in Cathie Wood's ARK Innovation fund reached 48% at low point Thursday". CNBC. Retrieved January 6, 2022.
  46. Johnson, Steve; Boyde, Emma (November 11, 2021). "SARK launches as short interest in ARKK jumps to new record". Financial Times. Retrieved February 13, 2022.
  47. Ballantine, Claire; Ponczek, Sarah (February 27, 2021). "Cathie Wood's Power in Some Stocks Is Even Bigger Than It Seems" . Bloomberg News .
  48. Johnson, Ben (March 3, 2021). "No Room on the ARK?". Morningstar, Inc.
  49. "ARK Innovation ETFs". Ark Invest. Archived from the original on February 4, 2021.
  50. "ARKVX Quote". www.bloomberg.com. Retrieved June 25, 2024.