Cathie Wood Ark Investment CEO

■ Nicknamed 'Money Tree Sister'. Major investor in cryptocurrency and tech stocks

■ Emphasizes disruptive innovation as an investment principle, achieving high returns

■ Wood states "Bitcoin is the largest entity among cryptocurrencies" and announces aggressive investment plans

■ Experts warn "Volatility is very high along with high returns... Approach with caution"

Cathie Wood, CEO of Ark Invest-nicknamed the 'Money Tree Sister' by domestic investors-is once again in the spotlight as the Ark Innovation ETF (ARKK) has recently rebounded in stock price. This renewed attention is attributed to CEO Wood’s strong confidence in Bitcoin and her resumption of aggressive investments in artificial intelligence (AI)-related tech stocks. However, experts caution that while her investment principle of 'disruptive innovation' has sometimes yielded high returns, it has also resulted in significant volatility each year, so a prudent approach is necessary.

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On the Nasdaq in the United States, the price of ARKK closed at $86.92 on October 1 (local time), marking a 52.78% increase compared to the beginning of the year. Compared to its yearly low of $40.51 recorded on April 8, the price has surged more than twofold. ARKK is the flagship investment fund of Ark Invest, led by CEO Wood, and is structured with a high proportion of investments in tech stocks and cryptocurrencies such as Tesla, Coinbase, and Palantir.

In particular, as CEO Wood has expressed strong confidence in Bitcoin and signaled even more aggressive investment in cryptocurrency, investor expectations for ARKK have grown. She recently appeared on a cryptocurrency-related podcast, emphasizing, "Bitcoin is a rule-based currency system with a limited supply and will continue to be the largest entity among cryptocurrencies," adding, "Our mutual funds include Bitcoin and Ethereum as investment assets."

Ark Invest's resumption of investment in the Chinese tech company Alibaba, an e-commerce giant, has also stimulated investor sentiment. According to Bloomberg, Ark Investment disclosed in documents submitted to the U.S. Securities and Exchange Commission (SEC) at the end of last month that it had purchased $16.3 million (approximately 2.28 billion KRW) worth of Alibaba American Depositary Receipts (ADRs). This marks the first time in four years since 2021 that Ark Invest has resumed investments in Chinese big tech companies.

Bloomberg analyzed, "This purchase by Ark Investment comes amid a recent rally in Alibaba’s stock price and signals a resumption of tech stock investments that had been virtually halted following the collapse of Chinese internet company stocks in 2021-2022."

Arc Invest Homepage

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Now known as a major investor in cryptocurrencies and tech stocks, Ark Invest was established in 2014 when CEO Wood abruptly left AllianceBernstein to start her own investment firm. She emphasized the importance of a more aggressive approach to 'disruptive innovation' investing compared to traditional asset management companies, and subsequently focused on investing in emerging technology fields that were relatively unfamiliar in the 2010s, such as cryptocurrency and AI.

According to The New York Times, CEO Wood decided to launch her company in the summer of 2014 after suddenly receiving what she described as a divine revelation. As a devout Christian, she personally named the company 'Ark', referring to the biblical vessel from the Old Testament. In addition to its flagship fund ARKK, Ark Invest manages more than 10 other funds and, as of the first half of this year, reportedly manages $13.6 billion (approximately 19 trillion KRW) in assets.

Cathie Wood rose to major prominence starting in 2020, during the height of the COVID-19 pandemic. ARKK posted a remarkable annual return of 152% in 2020, propelling her 'disruptive innovation' investment strategy into the mainstream. At that time, ARKK generated substantial profits by concentrating investments in leading electric vehicle stock Tesla, as well as popular pandemic-era platforms such as Zoom (video conferencing) and Roku (TV streaming). Her funds subsequently became a hot topic on social media and gained significant attention among young investors in the United States.

Reuters Yonhap News

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Experts advise that Ark Invest’s so-called disruptive innovation investment strategy comes with highly volatile returns, so investors should approach with caution. This is because Ark Invest’s main assets-cryptocurrencies and major U.S. tech stocks-are all highly volatile, increasing the risk of significant losses.

According to analysis by fund research firm Morningstar, ARKK’s returns over the past decade have been extremely volatile. After recording a 152% return in 2020, ARKK posted losses of -24% in 2021 and -67% in 2022. The return rebounded to 67% in 2023, but dropped to just 8.4% last year.

As a result, Ark Invest’s assets under management peaked at $53.7 billion (approximately 75 trillion KRW) in June 2021 and have steadily declined since then. By March 2022, assets had been cut in half to $23.9 billion, and continued to decrease, reaching $10.1 billion as of January this year.

Amy Arnott, a Morningstar analyst, pointed out, "Ark Invest’s funds have experienced losses even during bull markets," adding, "It’s important to pay attention not only to the high returns but also to their crisis management capabilities."