How Cathie Wood Became *The* Person Of The Moment On Wall Street
More often than not when we are writing about women on Wall Street it is about how few women there are in the C-suite at major banks or the lack of funds run by women. The big exception? All things Cathie Wood. We’ll unabashedly say it, it’s nice to see a woman at the top of the investing world for a change.
There’s a reason that everyone from the wallstreetbets crowd to major investors swear by every investing move Wood makes.
Let’s get to know the woman that has taken over the investing world in the last year.
1. She’s been on Wall Street for a while.
After going to school at the University of Southern California, Wood started her career at Capital Group in 1981. She then went on to Jennison Associates where she stayed for 18 years rising through the ranks to become the firm’s chief economist. From there she started a hedge fund called Tupelo Capital Management, and then went on to join AllianceBernstein as the chief investment officer of the firm’s global thematic strategies division.
2. She registered ARK Invest in 2014. The rest is history.
She registered her firm ARK Invest in 2014 beginning to run a collection of exchange traded funds [ETFs]. Refresher on ETFs — they are a basket of securities, so when you buy a share of an ETF you are buying a basket of stocks, not a single stock. ARK now boasts more than $60 billion in assets in its seven ETFs.
3. Wood’s bets on mega-growth stocks have paid off.
Her flagship ETF, the $27 billion ARK Innovation ETF, which trades as ARKK, made 150% last year thanks partly to its largest holding, a $2 billion stake in Tesla, which soared 730% in 2020. ARK’s other actively managed ETFs all at least doubled in value.
4. She’s bullish on bitcoin.
Wonder where Wood stands on bitcoin? Wood has said she sees bitcoin replacing bonds as far as how people invest. She also believes it could hit trillions in market cap in the future.
5. ARK is now massive.
How successful has Wood been? Ark is now the seventh-largest ETF issuer in the world and its flagship Ark Innovation fund is now the largest actively managed ETF.
6. She says her secret sauce is research.
At the core of ARK is its research Wood often says, and Ark has its analysts research specifics like battery tech or the blockchain (not just large sectors). Wood says she then takes a five-year approach to looking at stocks looking for value.
7. Wood is now a bonafide super star in the investing world.
To say the investing world is obsessed with Wood would be an understatement. There is a Twitter account called @ARKkDaily which tracks ARK’s daily trading activities and which has amassed almost 50,000 followers. Fans of Wood have made swag featuring her face including t-shirts and mugs to sell on Etsy and even watercolor paintings of her. Bloomberg Intelligence has called it “the Cathie Wood effect” or “ARK-mania.”
8. How real is the “Cathie Wood effect”? It’s very real.
Wood has become such a power-player she even moves markets. The sports betting app DraftKings stock shot up 8.6% in one day after it was disclosed that ARK was including it in one of its funds.
9. Wood’s success is a big deal for women.
Again, it’s not often you hear of this kind of success from a woman on Wall Street. According to Morningstar, only 14% of fund managers globally were women as of the end of 2019.
10. Her next ETF? Space exploration.
Yeah, that’s right, Wood’s next ETF is going to be focused on space exploration according to Barron’s.
Feature Illustration: Laura Caseley For The Money Manual