Cathie Wood Talks ETFs

Summary

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Bloomberg Talks: "Cathie Wood Talks ETFs" (Feb 2, 2026)

Episode Overview

This episode features Cathie Wood, CEO and CIO of ARK Invest, in conversation with Bloomberg's Eric Balchunas and other commentators. The discussion centers on the evolving landscape of exchange-traded funds (ETFs), especially regarding private company holdings, regulatory changes, and fund construction. Cathie also addresses market trends like the "debasement trade," relationships with private companies like SpaceX, and the topic of key-person risk at ARK. The focus is on providing deep insights into the intersection between innovation, regulation, and investment products.

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Key Discussion Points and Insights

ARK’s Private Holdings and the SpaceX Factor

[00:37-03:46]

• Cathie Wood confirms SpaceX is her venture fund's second-biggest holding (about 7.5%) and maintains a positive outlook, referencing IPO rumors and the company's expansion into digital data centers and “the Xi ecosystem.”

  • Quote:

    “We're feeling great. Especially the rumors are we have no idea if it will go out at 1.5 trillion. Again, rumors, rumors. But Space X has big ideas. Orbit Digital Data centers being the latest, and Xi, which we also own in Ark V X, is going to become a part of this ecosystem.”
    – Cathie Wood, [01:16]

• When SpaceX goes public, ARK will convert private positions to public, potentially increasing ETF exposure to the company but maintaining fund diversification.

  • Quote:

    “When Space X goes, we will obviously bump up the public position, but we don't have to say sell it. Now it would be unusual if all of these names Space X, Anthropic X, AI, if they all were to go public, yes, we would want to diversify into more private names. We don't have to sell right away.”
    – Cathie Wood, [02:02]

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ETFs and Inclusion of Private Assets

[03:10-07:17]

• Eric Balchunas highlights a market conundrum: rising demand for private assets like SpaceX in ETFs, regulatory boundaries, and creative fund structures emerging to meet this demand.

  • Example: Other funds rapidly growing by classifying private holdings as "less liquid" rather than "illiquid."
  • Quote:

    “There’s been three ETFs that have sort of, I don’t know, we could bend the rules or whatever, but they’ve added privates into their Fund... and immediately assets jumped 50% in a week. Clearly the demand is to get this in the ETF format, but it’s not the right format.”
    – Bloomberg Commentator, [03:10]

• Cathie Wood explains ARK’s choice of interval fund format (20% public, 80% private) to circumvent the 15% illiquid asset limit in standard ETFs. She notes evolving definitions of "liquid" due to secondary markets, and private firms’ former reticence to feature in ETF structures is possibly shifting:

  • Quote:

    “The reason we chose the interval fund format was we could have more than 15% of our in illiquid assets. Now it may be that the definition of illiquid is changing. … Secondary markets are beginning to grow, meaning private shares on secondary markets. So there’s access there. So maybe this definition of illiquid or less liquid is, is changing here.”
    – Cathie Wood, [03:46]

• On potential inclusion of small amounts (5-10%) of privates in ETFs, Wood stresses compliance caution due to market volatility and daily marking requirements.

  • Quote:

    “We certainly have thought about it… There's some reticence because they're in, in the worst case, let's just say black swan, the public markets go down dramatically. These, these private positions are not mark to market every day. They could end up easily well above 15%. And then what, what would a fund be faced doing trying to find a secondary market?”
    – Cathie Wood, [05:59]

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The "Debasement Trade" and Dollar Diversification

[07:17-09:40]

• The host asks about diversification away from the US dollar ("debasement trade"), traditionally into gold but not recently into crypto.
• Cathie Wood dismisses the thesis, citing long-term uncorrelation between gold and Bitcoin, and asserts US dollar strength due to policy shifts ("Trumpinomics"), deregulation, and anticipated higher returns on US capital.

  • Quote:

    “If you put the dollar into perspective, you will see that over the years and in recent years it's toward the higher end of its range against other currencies. ... We think because of those, the returns on invested capital in the United States are going to go up relative to those elsewhere in the world. ... Trumpinomics, if you want to call it that, is like Reaganomics on steroids. If you look at what happened to the dollar under Reagan, it doubled. It nearly doubled.”
    – Cathie Wood, [07:52]

  • Memorable insight on market cycles:

    “The last two major cycles for bitcoin were preceded by the gold price increasing first.”
    – Cathie Wood, [07:52]

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Key-Person (“Key Woman”) Risk and Succession at ARK

[09:40-10:56]

• Clip of Todd Sohn highlights potential risks for funds built around star managers, specifically expressing curiosity about ARK’s contingency if Cathie Wood departs.

  • Quote:

    “Cathie Wood is ARK. She's the face of that company. What happens when Cathie says, you know, I'm moving on or whatever it might be?”
    – Todd Sohn, [09:56]

• Cathie Wood responds playfully and reassures that robust succession and oversight exist at ARK, including directors of research, a chief futurist, analysts, and investment committees for each fund.

  • Quote:

    “We have a very firm succession plan here. The way we've set up the firm with directors of research, a chief futurist, analysts, research associates, markets and really the equivalent of investment committees for each of our funds. I think any due diligence effort would look at what we've done here at ARK and be pretty reassured by it.”
    – Cathie Wood, [10:21]

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Notable Quotes

• Cathie Wood ([01:16]): “We're feeling great. Especially the rumors are we have no idea if it will go out at 1.5 trillion. Again, rumors, rumors. But Space X has big ideas.”
• Bloomberg Commentator ([03:10]): “Clearly the demand is to get this in the ETF format, but it’s not the right format. How is this going to play out?”
• Cathie Wood ([03:46]): “The reason we chose the interval fund format was we could have more than 15% of our in illiquid assets. … So maybe this definition of illiquid or less liquid is, is changing here.”
• Cathie Wood ([07:52]): “Trumpinomics, if you want to call it that, is like Reaganomics on steroids. If you look at what happened to the dollar under Reagan, it doubled. It nearly doubled.”
• Todd Sohn ([09:56]): “Cathie Wood is ARK. She's the face of that company. What happens when Cathie says, you know, I'm moving on or whatever it might be?”

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Memorable Moments with Timestamps

• [01:16] Cathie Wood addresses rumors and confidence about SpaceX and fund positioning.
• [03:10] Commentary on the bending of ETF rules for private assets and surge in demand.
• [05:59] Cathie Wood details compliance challenges with private holdings in ETFs.
• [07:52] Cathie’s in-depth take on the debasement trade, gold, Bitcoin, and US dollar policy.
• [10:21] Succession planning at ARK—emphasizing stability beyond its star leader.

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Conclusion

This episode offers a candid, insightful look into evolving ETF structures, the push for private asset inclusion, and how star managers like Cathie Wood are navigating risk, regulation, and future leadership. It’s an essential listen for those interested in finance, innovation, and the future of investment management.

Transcript

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[Bloomberg Host]

Bloomberg Audio Studios Podcasts, Radio news.

[Bloomberg Interviewer (Eric Balchunas)]

Let's talk more about this non ETF with Cathie Wood. She is CEO and CIO of ARK Invest. Kathy, great to have you with us. We'll get into the ETF conversation, but let's start with your holdings in your venture fund because I'm taking a look. It looks like your second biggest holding is Space X. Of course, as we know, that is a private company, one of Elon Musk's company right now in talks to potentially merge with Xi and in talks potentially to IPO later this year. I mean, as you digest these news events, how are you feeling about your current slice in Space X which I believe is about 7 1/2% of this fund?

[Cathie Wood]

Yes, we're feeling great. Especially the rumors are we have no idea if it will go out at 1.5 trillion. Again, rumors, rumors. But Space X has big ideas. Orbit Digital Data centers being the latest and, and Xi, which we also own in Ark V X is going to become a part of this ecosystem. We do believe, and I think we're getting more information now, that this is becoming more and more likely.

[Bloomberg Host]

So when Space X does make its debut on the public markets, when it lists, when it IPOs, what does that do to your fund? How do you respond to that?

[Cathie Wood]

Ye. Yes. The wonderful thing about arch and interval funds generally in terms of the way we've constructed this one, is that it's 20%, roughly 20% public, 80% private. And when Space X goes, we will obviously bump up the public position, but we don't have to say sell it. Now it would be unusual if all of these names Space X, Anthropic X, AI, if they all were to go public, yes, we would want to diversify into more private names. We don't have to sell right away. Now the other thing that, that our companies really like is that they can see we have $30 billion of assets under management and, and most of the public equity market. So we will be feeding these names into our ETFs as, as Time goes on.

[Bloomberg Analyst/Commentator]

So, Kathy, let's talk about this conundrum, right? This is one of the most fascinating topics to me that I'm writing about. You've got all these stocks, you have 500 million. Meanwhile, there's been three ETFs that have sort of, I don't know, we could bend the rules or whatever, but they've added privates into their Fund X OVR immediately 1.5 billion a Crane Shares ETF has two privates. And then Ron B added 22% of Space X and immediately assets jumped 50% in a week. Clearly the demand is to get this in the ETF format, but it's not the right format. How is this going to play out?

[Cathie Wood]

It's going to be very interesting. Eric, thank you for doing the research on this. And, and this space is moving very quickly. The reason we chose the interval fund format was we could have more than 15% of our in illiquid assets. Now it may be that the definition of illiquid is changing. I know we actually have gone to some of our, our private companies, the ones in the interval fund, saying, hey, we'd love to add you into our ETFs because we think this is such an important story. All we do is focus on disruptive innovation. You are one of the biggest disruptors, let's just say Speaker SpaceX. And what we found over time is that they have been reticent. So something is changing here, Eric, and it would be very interesting to get to the bottom of it. The fcc of course is, is deregulating, so that could be part of it. Secondary markets are beginning to grow, meaning private shares on secondary markets. So there's access there. So maybe this definition of illiquid or less liquid is, is changing here.

[Bloomberg Interviewer (Eric Balchunas)]

Yeah, our understanding and Bloomberg Intelligence's understanding, Kathy, is that basically Baron classified their Space X holdings as less liquid rather than illiquid as we were talking about. We're learning that that comes from the issuer rather than the sec. But you also make another interesting point when it comes to the private companies themselves maybe being a little bit reticent to be in a vehicle such as an etf. Of course, we about it from the issuer perspective all the time. So interesting to hear it from the perspective of the companies. But you mentioned that, you know, when it comes to going ahead of that 15% cap in an ETF, that that's not something that you necessarily want to do. But have you thought about adding perhaps less than that, you know, in the realm of 5 to 10% into an ETF?

[Cathie Wood]

Yes, we certainly have thought about it. So much so that we've gone to the companies and as I said there, at least when we went to these companies there was some reticence because they're in, in the worst case, let's just say black swan, the public markets go down dramatically. These, these private positions are not mark to market every day. They could end up easily well above 15%. And then what, what would a fund be faced doing trying to find a secondary market now? Maybe markets are becoming more liquid themselves. They're much more liquid today than they were when they first started maybe five, six, seven years ago. So we've been, I would say from a compliance point of view, very careful. And then, you know, our market makers are also trying to figure out what to do with this. How do they price in real time when at any minute something crazy could happen coming from one of these private companies. So there's, there are some ecosystem challenges.

[Bloomberg Host]

Here, some ecosystem challenges and it's something that we will be watching for. Certainly it's an evolving story. Kathy I do want to get your take on what a lot of you are calling the debasement trade. The effort to diversify beyond the US dollar and US dollar assets, moving to other assets like precious metals specifically as a hedge against the dollar. What's different this time around from what we saw last year is the crypto is not part of this. It's not getting the bid from folks who are looking to diversify, who believe in this debasement idea. How do you think about that?

[Cathie Wood]

A couple of thoughts. I've been writing a lot about it recently. I think if you look over time, if you look for the last five years and you do a correlation between gold and bitcoin, you'll find very little correlation at all. What you will see if you look back a little further, the last two major cycles for bitcoin were preceded by the gold price increasing first. Now I think what's going on this so called debasement trade, if, if I can just back up a little bit, I think is misplaced and especially when we think about the dollar. If you put the dollar into perspective, you will see see that over the years and in recent years it's toward the higher end of its range against other currencies. And we think that the combination of deregulation here in the United States, big tax changes, especially for corporations and very business and capital friendly policies here in the United States. We think because of those, the returns on invested capital in the United States are going to go up relative to those elsewhere in the world. And this we think is because Trump inomics, if you want to call it that is, is like Reaganomics on steroids. If you look at what happened to the dollar under Reagan, it, it doubled, it nearly doubled. So much so and so quickly that we ended up in the plaza and Louver accords to try and get it down. So I think it's a little misplaced.

[Bloomberg Host]

Kathy, we had Todd Sohn, thank you for explaining that. By the way, we had Todd Stone strategic on with us last week and he was talking about the key man risk idea for funds that are tightly tied to their star managers. And you're nothing if not a star manager. Take a listen to what Todd said.

[Todd Sohn]

Think of ark. Cathie Wood is ark. She's the face of that company. What happens when Kathy says, you know, I'm moving on or whatever it might be? This is going to be really interesting over the next 30 years of all these established players coming into the ETF market and you're going to lose these key man, key woman risks there.

[Cathie Wood]

Key woman risk.

[Bloomberg Host]

I'm just curious about the state of your succession planning over at Ark Invest if one day you want to move on to do something else.

[Cathie Wood]

Oh my goodness, I can't imagine that day. Let's just say that to start. But we have a very firm succession plan here. The way we've set up the firm with directors of research, a chief futurist, analysts, research associates, markets and really the equivalent of investment committees for each of our funds. I think any due diligence effort would look at what we've done here at ARK and be pretty reassured by it.

[Bloomberg Interviewer (Eric Balchunas)]

All right, Kathy, that's a good place to leave it. Really appreciate you taking the time for us on our relaunch day. That is Cathie Wood of ARK Invest and you can read all about this drill down plus the latest in the ETF industry when you subscribe to my weekly ETF IQ newsletter. That is bloomberg. Com ETFIQ newsletter.