Cathie Wood’s Ark opts to shun banks and sweets in new Transparency ETF

Star US investor Cathie Wood’s Ark Investment Management will shun banks as well as a number of controversial sectors with the launch of its new ARK Transparency ETF.

The strategy will embrace a focus on companies’ environmental, social and governance credentials.

In a filing with the US regulator this week it was revealed that Ark’s latest investor offering will invest in around 100 companies, valued at least $1billion each, which score high marks for their transparency standards and overall reputation.

Its ESG focus means that ARK Transparency will not invest in companies within the alcohol, chemicals, fossil fuel transportation, gambling, metals, minerals, natural gas, oil or tobacco industries.

Ark Investment Management’s Cathie Wood targets transparency in latest offering 

While the exclusion of these industries is often common practice for funds with an ESG focus, ARK Transparency has taken the unusual step of also preventing itself from investing in the banking or confectionery industries.

Recent years have seen a boom for ESG investments, which is expected to continue for some time to come. The global ESG fund market is on track to grow from its current level of $37.8trillion to $53trillion by 2025, according to Bloomberg analysis, representing more than a third of all fund assets.

Ark’s CEO and chief investment officer Wood has risen to prominence with her media-savvy and outspoken approach to business.

She is an advocate for the social good that can be delivered through the disruptive power of technological progress, notably having predicted Elon Musk’s Tesla will reach a share price of $3,000 in 2025 compared to its current value of around $730.

Wood also believes bitcoin will one day reach $500,000, compared to its current value of $49,383 at the time of writing.

US investors will be able to buy the ETF through their usual broker or investing app. 

However, UK-based investors may face a challenge if they wish to access Wood’s innovative strategies, with most of the country’s DIY investing platforms having pulled US-based funds after the introduction of new rules in 2018.

However, this does not mean UK investors are short of 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 growing rapidly in popularity and reached €32.4billion in total assets in Europe alone this year, according to Morningstar data.

Just yesterday, micro-investing platform Wombat launched its latest offering, the Battery Boom fund, which gives UK investors exposure to the rapid growth in the global adoption of battery and energy storage solutions.

The ETF’s largest holdings include developer of hydrogen fuel cell systems Plug Power, and it allows investors to capitalise on advancements in battery technology driven by the increasing adoption of electric vehicles, which already account for more than half of global battery demand.

The fund provides investors with exposure to companies across the battery ecosystem, including those involved in raw materials mining, 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 per cent.

CEO and co-founder of Wombat Kane Harrison said: ‘Batteries are critical to global energy transformation efforts and demand for them is only going to grow, not least from EV manufacturers as people continue to move away from vehicles powered by petrol and diesel.

‘With battery technology improving all the time, its importance can’t be overstated, and we are delighted to offer a thematic fund that provides investors access to the companies that have the highest potential for growth in what is an exciting emerging global megatrend.’

This post first appeared on Dailymail.co.uk