By Ketki Saxena
Investing.com -- Bank of Montreal’s asset management arm is partnering with U.S. portfolio manager Cathie Wood’s ARK Investment Management to launch three exchange-traded funds.
The ETFs will include Ms. Wood’s famous innovation fund that invests in tech disruptors such as Zoom and Tesla (NASDAQ:TSLA). The BMO (TSX:BMO) ARK Innovation Fund, along with the BMO ARK Genomic Revolution Fund, and the BMO ARK Next Generation Internet Fund will all begin trading on the Toronto Stock Exchange this Thursday.
The BMO ETFs will trade under similar tickers to the NYSE ARK ETFs but on the Toronto Stock Exchange. The funds will charge a management fee of 0.75%.
The launch of the new funds comes after a tough year for the technology sector, as tech companies slash workforces, and market turmoil roils growth stocks. Ms. Wood’s flagship ARKK is down 67% over the past 12 months, while ARKG and ARKW are down 54% and 70% respectively.
However, Wood remains bullish on disruptive technologies. Despite the stock market turmoil, she has continued to buy shares in Tesla, Roblox, DraftKings and Coinbase (NASDAQ:COIN) (just days after the FTX collapse).
In a television interview earlier today, she noted “We believe that in the global equity market, truly disruptive innovation is priced at roughly $7 trillion dollars. We believe that number is going to $210 trillion in 2030. So it's going from less than 10% of the market to more than 50% of the market.”
“There is a lot of future opportunity for innovation to solve problems – and we have a lot more problems to solve, such as supply chain issues, food and energy prices, and the war in Ukraine,” Wood said. “The future is uncertain. But that 360% run was a dry run for what we’re going to see during the next five to 10 years.”
Ms. Wood is referring to the famed outperformance of her funds, some of which jumped over 360% during the pandemic as demand soared for online services.
Wood founded ARK Investment Management in 2014. The fund currently has around US$25.1 billion in assets under management.
This is not the first time Ark has sought to enter the Canadian market. In 2016, it entered Canada through a partnership with independent ETF provider Emerge. However, the partnership with BMO will allow for greater distribution, a key reason for ARK to partner with BMO.