TL;DR
- Cathie Wood calls for corporate and personal tax cuts promised by the Trump administration to be applied retroactively.
- The ARK Innovation ETF has risen 17% since Trump’s victory, driven by optimism in sectors like artificial intelligence and cryptocurrencies.
- Wood emphasizes the need for policies that promote technological innovation and avoid protectionist measures like tariffs.
Cathie Wood, the renowned investor and CEO of ARK Invest, has urged the incoming Donald Trump administration to prioritize fiscal clarity and apply the promised tax cuts retroactively starting January 1, 2025. According to Wood, this measure would not only provide certainty to the markets but also stimulate economic growth at a critical and uncertain time.
Since Trump’s victory in November, the ARK Innovation ETF (ARKK), Wood’s flagship fund, has seen an impressive 17% increase. This rise reflects market optimism regarding Trump’s economic policies, which are expected to benefit key sectors such as artificial intelligence and cryptocurrencies. Tesla (+54% since November) and Coinbase (+7%) have led this growth, while other investments like Robinhood and Block could benefit from a more flexible regulatory environment.
Optimism About Innovation and Deregulation Policies
Cathie Wood has publicly praised Trump’s focus on promoting deals, reducing bureaucracy, and fostering technological innovation. However, she also warned about the negative impact of measures like tariff hikes, which could act as a “hidden tax” on American consumers and harm economic growth in the long term.
It is expected that the Republican-led Congress will move forward with tax reforms in 2025, while Trump could implement key measures from his inauguration on January 20.
At the same time, ARK is diversifying its portfolio, investing in companies like Archer Aviation, a pioneer in autonomous aircraft, while keeping Tesla as its top bet, representing 16% of its $6.4 billion in assets.
ARK Invest has also been recognized as an optimistic and pioneering firm in the crypto sector, launching a Bitcoin spot ETF this year. According to Wood, the Biden administration’s restrictive stance weakened the U.S.’s competitiveness in this area, but she is confident that the new government will prioritize innovation to regain lost ground and drive progress.
