By Barbara Kollmeyer
Cathie Wood’s ARK Investment Management is planning to roll out a new exchange traded fund focused on transparency, and which will shun oil and gas, alcohol, bank and gambling stocks.
According to an Securities and Exchange Commission filing , the ARK Transparency ETF plans to mimic a Transparency Index , which tracks stock movements for around 100 companies highly ranked for transparency based on a proprietary scoring methodology that includes such factors as reputation and adoption of transparency standards.
Apple /zigman2/quotes/202934861/composite AAPL +0.46% , Netflix /zigman2/quotes/202353025/composite NFLX -0.47% , Chipotle Mexican Grill /zigman2/quotes/200781108/composite CMG -1.49% , Coinbase /zigman2/quotes/225893452/composite COIN -1.86% and Tesla /zigman2/quotes/203558040/composite TSLA -0.63% are among the names included in that transparency index, with many of those companies already included in ARK’s other funds.
ARK’s ETF will also exclude chemicals, confectionary, fossil fuel transportation, metals and mineral, dropping it into a group of increasingly popular environmental, sustainable and governance funds. Among the more popular ETFs in that space, Vanguard FTSE Social Index Fund /zigman2/quotes/209234165/realtime VFTAX +0.20% and the iShares ESG Aware MSCI USA ETF /zigman2/quotes/208081415/composite ESGU +0.13% have returned around 20% each year to date.
The veteran money manager Wood raked in billions last year via her group of ETFs that focused on high growth innovation stocks, which were star performers during the first year of the pandemic. But this year has seen some of her biggest ETFs struggle to match last year’s stunning gains — the popular ARK Innovation /zigman2/quotes/204808965/composite ARKK -0.50% exchange-traded fund is down about 2% year to date after soaring 148% in 2020.
That has come as investors shifted into stocks geared towards the economic recovery and hopes that the pandemic was waning, though new variants such as delta have dashed some of those aspirations. Even so, stocks have continued to march higher this year, shaking off economic and pandemic setbacks.
Wood has also butted heads with other Wall Street investors, such as hedge-fund manager Michael Burry of “The Big Short” fame who has made a $30 million bet against her strategies. Wood has said that Burry simply doesn’t understand “explosive growth” opportunities in the innovation space.