Cathie Wood, a widely followed stock picker, founded and runs the asset-management firm ARK Invest. ARK currently offers six actively managed exchange-traded funds. None have the capability to short stocks, borrowing shares and selling them later in a bet that prices would drop.

ARK currently offers six actively managed exchange-traded funds, but none have the capability to short stocks. The new portfolio, currently being tested internally, would be able to not only own stocks, but also to short them, Wood said. She plans to focus her short selling on stocks in big benchmarks that are vulnerable to innovation-driven changes.

ARK is known for focusing solely on innovators and industry disrupters like Tesla. The CEO characterized the new approach as “ARK on steroids.” “We think the benchmarks are where the big risks are longer-term, because they are filling up with value traps,” she said.

Investors have favored cheaper cyclical stocks that could benefit from the postpandemic recovery. Disruptive innovation is currently priced between $10 trillion and $15 trillion in the global public market, says Wood. She believes that in 10 years, they’ll be worth $200 trillion.
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