Cathie Wood says Ark is open about its strategy to help regular investors ‘stay on the right side of change’

• Cathie Wood says Ark is open about its investment strategy to help individual investors know what’s coming.
• Ark gives away its research because it wants parents to read it and influence their children, she told Time.
• The Ark CEO said it wants to democratize investing in innovation and restore confidence in markets.

Cathie Wood has said Ark Invest shares its strategy to help retail traders understand the innovation-driven shifts coming and get more people involved in the markets.

She told Time magazine that Ark, gives away its research because it wants grandparents and parents to read it and influence their children.

“That’s one of the reasons we’re so open and transparent,” Wood said in the Time interview published Sunday.

“We want to say, ‘Hey world. Look at what’s about to happen. It’s so exciting. But make sure you get and stay on the right side of change.'”

Ark sends out a daily trading update on which stocks its exchange-traded funds are buying and selling. The firm also holds regular webinars and podcasts, and Wood even invited people to join the company’s brainstorming sessions in the interview.

Ark funds back five key “disruptive innovation” themes, such as artificial intelligence and blockchain. Its flagship ARK Innovation ETF (ARKK), managed by Wood, soared by 150% in 2020 and has seen a compounded annual growth rate of 37% over the past five years.

But its performance faltered in 2021, when it fell 21%. It is down more than 23% year to date, as of Friday’s close.

Asked whether Ark’s transparency will make it easy for retail traders to mirror its strategy, she said part of the mission is to restore trust in Wall Street, which was dented by the 2008 financial crisis. 

“We wanted to bring transparency and democratization into investing in innovation; we consider ourselves the closest you’ll find to a venture capital firm in the public equity markets.”

In March, Wood said she believes individual investors could lead the charge in bringing a shift to the heavily indexed or benchmark approach to investing, according to a CNBC report.

Retail traders, or individual investors, have invested heavily in the markets over the past year. The Reddit meme-stock frenzy in early 2021 led to a sharp increase in trading, due largely to social media. 

In the interview, Wood justified the behavior of amateur investors who banded together to go after hedge funds that had bet against their favored stocks, such as movie-theater chain AMC and video game retailer GameStop.

“We tend to base all our investment decisions on our research. Some people base their investment decisions on technicals,” she said.

“These individuals were simply taking a look at how incredibly shorted these stocks were, all by the same kind of hedge funds. I’m not going to criticize it.”