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Will 2023 be the Year of Cathie Wood ETFs?

Will 2023 be the Year of Cathie Wood ETFs?

Cathie Wood, famous for the success of Ark Investment’s winning products, had created a great fan following in 2021 only to witness a miserable fate in 2022. Her products are tech-heavy and enjoyed huge success in the peak of the pandemic.

But tech took the brunt of last year’s bear market due to rising rates and Cathie Wood’s products suffered a miserable fate. However, several tech-darlings do not deserve this fate. Plenty in that space were penalized for simply being in that space.

But 2023 has started showing cues of a trend reversal.  The tech-heavy Nasdaq is up 6.44% so far this year as rates have fallen slightly. And many tech companies are set for big rebounds. This should make Cathie Wood ETFs bight stars again.

Inside Cathie Wood ETFs

Nine of ARK Innovation’s stock holdings, including Coinbase Global (COIN), Pacific Biosciences (PACB) and Exact Sciences (EXAS), are up 17% or more this year so far, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. And on average, about 30 stocks in the ETF are up more than 10%, investors.com article revealed.

ARK Innovation ETF ( Free Report) is up 16.85 this year, way higher than the S&P’s 500’s 3.5% returns (as of Jan 20, 2023). And it also made the ARK Innovation the number one actively traded diversified ETF, said Morningstar Direct, quoted on investors.com. A cryptocurrency rally this year due to the return of risk-on trade sentiments helped ARK ETF to log such monumental gains.

If you believe ARK is primed for a stellar run, you can follow Wood via the following ETF investing strategies.

Digital Wallets

Growing penetration of smartphones and new-normal trends, which call for more stress on digital-only technology in many places, will support the mobile wallet market. Mobile Wallet Market size topped $100 billion in 2019 and is on its way to register gains at more than 15% CAGR between 2020 and 2026, per gminsights.com.A pureplay ETF on this arena isETFMG Prime Mobile Payments ETF ( Free Report) .

Genomics

Another disruptive area that Wood sees great potential in is genomics. The healthcare landscape has been benefiting from the emergence of genomics which is aiding mankind to decode the function, structure, evolution, editing and mapping of genomes.

Genomics would prove to be path-breaking in curing diseases like cancer. The global genome editing/genome engineering market size is projected to touch $11.2 billion in 2025 from $5.1 billion in 2020, at a CAGR of 17.0 %, per a marketsandmarkets.com article.

Apart from Wood’s product ARKG, Global X Genomics & Biotechnology ETF ( Free Report) and iShares Genomics Immunology and Healthcare ETF ( Free Report) are a few ETFs that could be tapped to make the most of this boom.

Electric Vehicles

Who doesn’t know Wood’s love for the electric vehicle (EV) giant Tesla? Tesla shares have lost heavily last year. Wood had also sold Tesla and loaded up shares in the U.S. listed China EV makers like Xpeng. But Wood has long been a proponent of the U.S. EV giant and has jumped into the cheaper valuation of Tesla all over again. Investors should note that Cathie Wood bought Tesla with a solid $15 million stake acquisition — cut stake in Chinese EV rival Nio.

One thing is clear that Wood likes EVs. Hence, investors should keep a close watch on EV-related ETFs like Amplify Lithium & Battery Technology ETF ( Free Report) , Global X Autonomous & Electric Vehicles ETF ( Free Report) , KraneShares Electric Vehicles and Future Mobility Index ETF (KARS) and The iShares Self-Driving EV and Tech ETF (IDRV).

 

Written by Susan Bellini