The ETF will not invest in vice, banking or oil.

Cathie Wood-led Ark Investment Management has filed on Tuesday for launching a new transparency-focused ETF that will avoid investments in companies involved in vices such as alcohol, tobacco, and gambling. It will also eschew banking and oil companies. (MarketWatch)

The ARK Transparency ETF

The ETF will also exclude chemicals, confectionary, fossil fuel transportation, metals and minerals, and will track a Transparency Index published by Solactive.

The index includes about 100 companies that are highly ranked for their transparent practices based on scoring for attributes such as reputation and transparent standards.

Some of the companies featuring on the index include Apple (NASDAQ: AAPL), Netflix (NASDAQ: NFLX), Chipotle Mexican Grill (NASDAQ: CMG), Coinbase (NASDAQ: COIN), and Tesla (NASDAQ: TSLA).

Bloomberg analyst Eric Balchunas said this was “kind of Ark’s version of ESG.”

ARK ETFs

The new ETF will be ARK’s ninth ETF. The other eight funds comprise six active and two passive funds, with Cathie Wood being known for her advocacy of the former category. ARK launched in 2014, and currently has assets under management of nearly $45 billion.

However, ARK’s flagship fund, the ARK Innovation Fund, has been unable to beat the eye-watering returns it generated last year of 148% – this year it is down about 2% YTD.

The fund has been targeted by short-seller Michael Burry (of The Big Short fame) who disclosed in a mid-August filing that it held bearish put options on 235,500 shares, worth about $30 million, of Wood’s fund.

However, Cathie Wood shot back at Burry saying: “I do not believe that he understands the fundamentals that are creating explosive growth and investment opportunities in the innovation space.”

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Image of Cathie Wood: Courtesy ARK INVEST