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Fund manager

Cathie Wood became the face of the bull market in highly-speculative growth stocks (what we’ve described as “jam tomorrow” stocks) during the pandemic. Her flagship exchange-traded fund (ETF), the ARK Innovation ETF (ARKK), roughly tripled in value between the start of 2020 and February 2021. But she now risks being the face of the bear market, too.

ARKK, which owns all things disruptive, from electric-car group Tesla to gene-editing biotech Crispr, has seen its value more than halve in the past year. Critics argue that Wood has simply ridden a wave of popularity in “story” stocks, fuelled by loose monetary policy, which is now ending.

But talking to Harriet Agnew in the Financial Times, Wood remains confident of her focus on tomorrow’s potential rather than today’s profits. “Technology solves problems and innovation is key to growth... you can’t just look at earnings. You have to look at revenues. Revenue growth consistently over time means companies have to innovate, or else someone will steal a march on them.”

This is why she also believes that technologydriven deflation will remain the main economic force, and that today’s problems will just accelerate innovation. “Many people think we have a permanent inflation problem. We don’t.” So when will things turn around? “We’re at our best when the odds are against us,” says Wood. “For compliance reasons, I’ve been asked not to give numbers, but the compound annual rate of return expectation... we have during the next five years is the largest I have ever seen.”