Cathie Wood's New ETF Shuts Out Banking, Fossil Fuels and Vice

Meanwhile, the firm's flagship ARK Innovation ETF (ARKK) is up to $22.5 billion, although it's down 2% year-to-date — compared with a gain of more than 20% for the S&P 500.

For her part, Wood has been an advocate for transparency in her funds, openly revealing her stock picks. That's helped her attract a loyal following of individual investors as her funds posted spectacular returns in 2020 and catapulted her into financial stardom.

She's known for her insistence that revealing her picks doesn't hurt her strategies, but instead garners more trust from those buying her funds. ETFs have been her vehicle of choice since she launched Ark in 2014, years before she began appearing on TV and stock prices moved based on her comments.

The choice of a passive strategy for the new fund may surprise some who know Wood for leading a revolution in actively managed ETFs, with more cash now pouring into them than ever before. But one of Wood's passive products, the 3D Printing ETF, has been quietly gathering steam and even features prominently in her space fund.

The transparency fund will join eight other ETFs from Ark, six that are actively managed and two that passively track indexes. Ark currently has about $45 billion in its ETFs, making it the 11th largest ETF issuer in the U.S.

"An index-based ESG ETF doesn't necessarily scream 'disruptive innovation,' which ARK has branded themselves around," said Nate Geraci, president of the ETF Store. "It will be very interesting seeing how they approach marketing this ETF given the strategy seems at odds with companies such as Tesla and DraftKings, large core holdings in other ARK ETFs."

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