Cathie Wood, a prominent U.S. tech investor, has urged Donald Trump’s incoming administration to accelerate economic growth and enhance policy clarity by implementing promised corporate and personal tax cuts retroactively to January 1, 2025. In an interview with Reuters, Wood emphasized that such a move would provide much-needed certainty to the markets.
Wood’s flagship ARK Innovation ETF, which has struggled in recent years, has surged by 17% following Trump’s election win. This rally is largely attributed to expectations that the new administration’s policies will benefit the fund’s key holdings. Among these, electric vehicle maker Tesla (TSLA) and cryptocurrency exchange Coinbase (COIN) have seen impressive gains of 54% and 7%, respectively, since November 6, compared to the S&P 500’s modest rise of 1.7%.
ARK Innovation’s portfolio also includes companies like Robinhood (HOOD) and Block, both of which could see positive impacts from pro-crypto and AI policies. Wood has been a vocal supporter of Trump’s economic platform, advocating for his strategies to drive innovation in areas such as cryptocurrency, artificial intelligence, and reducing regulatory burdens, all of which she believes will benefit corporate America.
Trump’s tax policy was a central issue during the election, with promises to cut taxes for U.S.-based companies and extend the individual tax cuts passed in 2017, which are set to expire in 2025. Wood has pushed for these tax changes to be enacted retroactively to January 1, 2025, arguing that it would boost market confidence. She warned that without this certainty, both companies and individuals might hesitate to make financial decisions.
In the interview, Wood also shared her stance on tariffs, which she generally opposes, viewing them as a tax increase on goods. However, she suggested that Trump’s potential tariff threats could simply be part of a larger negotiation strategy.
Looking ahead, analysts predict that a Republican-controlled Congress will focus on tax reform, with Trump set to issue executive orders on key policies immediately upon taking office. New regulatory appointments will also be crucial in advancing Trump’s pro-innovation agenda.
Although Wood did not support Trump financially during the 2024 election, she maintains contacts with influential figures like Tesla CEO Elon Musk and Republican Senator Cynthia Lummis, both of whom are shaping Trump’s policies. Wood has been a major backer of Musk, with ARK’s portfolio allocating 16% of its $6.4 billion in assets to Tesla. She is confident that artificial intelligence, including autonomous vehicles, will drive strong investment returns in the future.
Despite her strong faith in Musk and Tesla, Wood is diversifying her holdings, selling some Tesla shares to invest in companies poised to benefit from similar technological advancements, such as Archer Aviation, which is developing autonomous aircraft.
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ARK Innovation is also a major advocate for cryptocurrency, having launched a Bitcoin ETF earlier this year. Wood criticized the Biden administration’s crackdown on crypto, warning that the U.S. risks losing its competitive edge in innovation. However, she believes the new administration will seek to avoid ceding leadership in this field to other countries.
Lummis, a key figure in shaping cryptocurrency policy, acknowledged Wood’s leadership in digital assets and her role in providing valuable feedback on innovation issues.
Although the excitement surrounding Trump’s victory has cooled somewhat, Wood remains optimistic. She believes that the market’s focus will eventually broaden, particularly in sectors that have been hindered by recent policy constraints. She predicts that innovation-focused stocks will benefit as a result.
While Wood’s investment style is often seen as volatile, especially following her successful bets on companies like Zoom during the pandemic, she remains committed to providing investors with exposure to disruptive innovation, acknowledging that this approach inherently comes with higher volatility.
Despite facing challenges, including significant outflows from ARK Innovation in recent years, Wood continues to champion her investment strategy. As she stated, “We offer highly differentiated exposure to innovation,” and although volatility is inevitable, the potential rewards of innovation remain compelling.