Cathie Wood’s Ark chooses to shun banks and candy, oil and tobacco in new ESG-focused Transparency fund
- ARK Transparency ETF Will Invest in $100 Billion Public Companies
- The fund excludes controversial sectors such as oil and tobacco
- Investors continue to pump money into ESG-driven and thematic strategies
American star investor Cathie Wood’s Ark Investment Management will shun banks and some controversial sectors with the launch of its new ARK Transparency ETF.
The strategy includes a focus on companies’ environmental, social and governance credentials.
In a filing with the U.S. regulator this week, it was revealed that Ark’s latest investor offering will invest in about 100 companies, worth at least $1 billion each, that earn high marks for their transparency standards and overall reputation.
The ESG focus means that ARK Transparency will not invest in companies in the alcohol, chemicals, fossil fuel transportation, gambling, metals, minerals, natural gas, oil or tobacco sectors.
Ark Investment Management’s Cathie Wood seeks transparency in its latest offering
While excluding these sectors is often common for funds with an ESG focus, ARK Transparency has taken the unusual step of also barring itself from investing in the banking or confectionery industry.
In recent years, ESG investments have exploded and are expected to continue for some time to come. The global ESG fund market is on track to grow from its current level of $37.8 trillion to $53 trillion by 2025, according to an analysis by Bloomberg, representing more than a third of all fund assets.
Ark’s CEO and Chief Investment Officer Wood has become known for her media-aware and outspoken approach to doing business.
She is an advocate for the social wellbeing that can be delivered by the disruptive power of technological advancement, most notably having predicted that Elon Musk’s Tesla will hit a stock price of $3,000 by 2025, compared to its current value of about $730.
Wood also believes that bitcoin will one day reach $500,000, compared to its current value of $49,383 at the time of writing.
US investors can buy the ETF through their usual broker or investment app.
However, UK-based investors may face a challenge in accessing Wood’s innovative strategies as most of the country’s do-it-yourself investment platforms have attracted US-based funds following the introduction of new ones. rules in 2018.
However, this does not mean that UK investors have few options when it comes to innovation in the low-cost world of exchange-traded funds.
So-called thematic ETFs, which target specific trends in global markets, are rapidly growing in popularity, reaching $32.4 billion in total assets in Europe alone this year, according to Morningstar data.
Yesterday micro-investment platform Wombat launched its latest offering, the Battery Boom fund, which gives UK investors exposure to the rapid growth in global adoption of battery and energy storage solutions.
The ETF’s largest holdings include the developer of hydrogen fuel cell systems Plug Power, and it allows investors to capitalize on advances in battery technology driven by the increasing adoption of electric vehicles, which already account for more than the half of the global demand for batteries.
The fund provides investors with exposure to companies across the battery ecosystem, including those involved in resource extraction, manufacturing and emerging technologies such as autonomous driving.
It is listed on the London Stock Exchange with the ticker CHRG and will cost investors a total expense ratio of 0.4 percent.
Wombat CEO and Co-Founder Kane Harrison said: “Batteries are critical to the global energy transformation effort and demand for them will only increase, not least from EV manufacturers as people move away from vehicles that are powered by petrol and diesel.
“As battery technology continues to improve, its importance cannot be overstated, and we are pleased to offer a thematic fund that gives investors access to the companies with the highest growth potential in what is an exciting emerging global megatrend.”