Cathie Wood

Who is Cathie Wood?

Cathie Wood (full name Catherine Duddy Wood) is a distinguished American investor and the founder and CEO of ARK Invest.

In 2014, Wood established ARK Invest to revolutionize the world of active stock portfolios by converting them into exchange-traded funds (ETFs).

ARK Invest is a dynamic player in the investment management field that acquires stakes in publicly traded corporations, with a portion of its ETFs being available on the fully electronic NYSE Arca Exchange.

Techopedia Explains

As of September 2023, the company oversees a portfolio of eight funds with a combined net asset value of $14.7 billion.

Cathie Wood is renowned for her strategic investments in the technology sector, encompassing small and large-cap stocks of companies engaged in “disruptive innovation.”

These innovations span a wide spectrum, including artificial intelligence (AI), genome sequencing, robotics, clean energy, and blockchain.

Her conviction lies in the belief that investing in disruptive technology will enhance the well-being of individuals.

Early Life and Education

Cathie Wood was born on 26 November 1955, in Los Angeles, California, in the United States. Her parents were immigrants from Ireland. Wood’s father had a diverse career, including service in the Irish Army and the US Air Force, where he worked as a radar systems engineer.

In 1974, Wood completed high school at Notre Dame Academy, a Catholic school for girls in Los Angeles.

In 1981, she graduated summa cum laude – with the highest honor – from the University of Southern California (USC), where she earned a Bachelor of Science degree in finance and economics.

At USC, she had the privilege of learning from renowned economist Arthur Laffer, who had previously served as an advisor to Presidents Ronald Reagan and Donald Trump. Laffer became her mentor.

Cathie Wood’s Career Path

Over several decades, Wood built an impressive career in investment management, working with esteemed firms in the industry.

As a portfolio manager, Wood specialized in thematic investing, a strategy focused on investing in long-term trends rather than specific companies.

She carried this thematic approach into ARK Invest, emphasizing disruptive innovation as the overarching theme.

Here is a more comprehensive overview of her professional career:

• In 1977, she obtained a job as an assistant economist at Capital Group with the help of her mentor, Arthur Laffer. She worked in this position for three years.
• By 1980, she relocated to New York City and took on multiple roles, including chief economist, portfolio manager, analyst, and managing director at Jennison Associates, where she remained employed for 18 years.
• In 1998, Wood, in collaboration with Lulu C. Wang, co-established Tupelo Capital Management, a hedge fund located in New York City.
• She joined AllianceBernstein in 2001 as the Chief Investment Officer (CIO) for global thematic strategies. She held this position for 12 years, managing $5 billion in assets under management (AUM). Here, she faced criticism for underperforming less than the broader market during the 2007–2008 financial crisis.
• Wood parted ways with AllianceBernstein in 2014 after her proposal for managing ETFs focused on disruptive innovation was labeled too risky. She went on to launch ARK Invest the same year.
• ARK Invest was inspired by the Ark of the Covenant, a reference to Wood’s reading of the One-Year Bible at the time. Bill Hwang of Archegos Capital provided the initial capital for ARK’s first four ETFs.
• In 2020, Wood was recognized as the best stock picker of the year by Bloomberg News editor-in-chief emeritus Matthew A. Winkler.
• Wood was selected to be part of the 2021 Forbes 50 Over 50, an esteemed group of individuals aged 50 and above, comprising entrepreneurs, executives, scientists, and innovators who have made significant contributions to their respective fields.

Personal Life

Cathie Wood, who resides in Wilton, Connecticut, has three children. She got divorced from Robert Wood in 2003, who passed away in 2018.

As a devoted Christian, Wood expressed concerns during the 2020 election about Joe Biden’s taxation and regulation plan, believing it could impede innovation.

In 2018, she contributed to her alma mater to establish the Duddy Innovation Institute to inspire girls to pursue disruptive innovation.

ARK Invest Performance Since Its Launch

ARK Invest’s investment portfolios have fluctuated substantially since its inception, with notable shifts occurring before and during the COVID-19 pandemic.

The flagship ARK Innovation ETF displayed consistent growth in market value until 2020, reaching a peak in early 2021.

In December 2019, investors poured $8.2 billion into ARK’s ETFs, marking one of the highest net inflow achievements for any US fund manager. This feat was documented in Morningstar’s – an investment research company – comprehensive year-end fund flows report.

The milestone served as the culmination of an extraordinary year for Wood’s ETF firm. Its assets under management surged from $3.1 billion at the close of 2019 to an impressive $34.5 billion by the end of 2020.

However, in late 2021, it experienced a setback, witnessing a decline of 24%. During the first quarter of 2022, it ranked as the weakest performer among the equity funds assessed by Morningstar, Inc.

In addition, eight other funds managed by Wood, including those focusing on financial technology and space exploration, found themselves among the underperformers within their respective categories.

Nevertheless, the first half of 2023 marked a notable turnaround, with the fund rebounding to post a remarkable gain of 41%.

Cathie Wood’s Net Worth

Cathie Wood’s wealth is closely tied to the performance of the ARK funds, and her net worth has seen fluctuations over the years.

As of June 2022, Forbes estimated her net worth at approximately $140 million, reflecting a decline from the $400 million figure reported in 2021.

However, various other media sources have suggested that her net worth in 2023 falls within the range of $250 million to $300 million.

Wood primarily generates income through fees levied on investors for managing ARK’s funds. For ARK’s actively managed ETFs, they charge an annual expense ratio or management fee of 0.75%. This translates to a fee of $7.5 million for every $1 billion invested.

In 2020, Barron’s reported that Wood holds a 50% to 75% stake in ARK. Nevertheless, the exact amount of her personal funds invested in ARK’s ETFs has not been publicly disclosed.

Among her other personal assets, public records indicate that Wood owns a residence in Wilton, Connecticut, where the average home value, according to Zillow, stands at $1 million.