Cathie Wood says her firm is testing a more aggressive strategy that would be ‘Ark on steroids’

Investing

Catherine Wood, chief executive officer of ARK Investment Management LLC, speaks during the Milken Institute Global Conference in Beverly Hills, California, on Monday, Oct. 18, 2021.
Kyle Grillot | Bloomberg | Getty Images

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Cathie Wood — known for her aggressive innovation ETFs — said Ark Invest is internally testing a fund that incorporates shorting major stocks in the benchmarks that are being disrupted.

“We’re testing out a portfolio but it’s really Ark on steroids,” Wood told CNBC’s “Squawk Box” on Wednesday. Wood said she wants to test the strategy on Ark’s employees first to make sure the everyone “keeps their eye on the 5 year time horizon and doesn’t pay attention to the day to day,” she added.

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“We think the benchmarks are where the big risks are long-term because they are filling up with value-traps, those companies that have done very well historically but are going to be disintermediated and disrupted by the massive amount of innovation that’s taking place,” Wood added.

“What we would be doing is shorting stocks that are in the big benchmarks and when we get into a risk-off situation, what happens is portfolio managers and analysts generally run back to those stocks, get closer to their benchmarks and they dump our stocks, which are either small parts of benchmarks or not in benchmarks. Great opportunity for us as we have experienced during these last few days to pick up those stocks because its simply a risk-off move to get closer to benchmarks,” she said.

Wood’s flagship fund, Ark Innovation ETF, is down nearly 15% in 2021.

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