Want to invest in a Cathie Wood fund? All you need is 500 bucks and a stomach for risk

September 29, 2022 2:46 PM

Cathie Wood, CEO and chief investment officer of Ark Invest

Cathie Wood and Titan are teaming up to give smaller investors the opportunity to get into the venture capital game for about the price of an IKEA sofa.

This week, Wood's ARK Invest announced the launch of the ARK Venture Fund, which is exclusively available to retail investors on the Titan investment platform. Billed as a "first-of-its-kind exclusive partnership," the agreement allows both accredited and non-accredited investors to participate in venture capital and invest in private and public companies pre-IPO for a minimum of $500.

The news comes just a week after Titan, an investment application launched in 2018 by New York-based Titan Global Capital Management, reintroduced itself to advisors and investors with a revamp focused on providing a personalized private wealth experience. Titan currently serves more than 55,000 clients on its app with over $750 million in assets under management and an average account size of $12,500.

Clayton Gardner, Titan co-founder and co-CEO, said the everyday investor has historically been locked out of venture capital due to accreditation requirements, high investment minimums and lack of access to top-tier VC firms.

"By offering Titan investors exclusive access to the ARK Venture Fund, we're unlocking VC for most investors, another step in our mission to democratize investing," Gardner said in a statement. "We're excited to work closely with Cathie Wood and the ARK team to launch this fund, especially in the current market environment where compelling investment opportunities abound."

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For Wood, giving investors with less money to throw around the chance to invest in companies at their earliest stages of growth levels the playing field. She believes that retail investors willing to take on the inherent risk get a boosted potential to see positive returns on investments while taking advantage of market opportunities with no accreditation required.

"ARK Invest focuses exclusively on technologically enabled disruptive innovation, not only in our research and investment strategies, but also our products and services," Wood said in a statement. "By launching the ARK Venture Fund, we seek to augment venture capital, offering all investors access to what we believe are the most innovative companies throughout their private and public market life cycles."

According to ARK officials, the actively managed Ark Venture Fund intends to invest 70% in early- and late-stage private companies and 30% in public technology stocks. There will also be selective investments into other venture capital funds.

The actively managed vehicle charges a management fee of 2.75%, with a total expense ratio estimated at 4.22%.

Bloomberg reported that the ARK Venture Fund has been in the works since February when an initial filing revealed plans for a closed-ended "interval" product that would take Wood's flagship strategy into less-liquid assets. Interval funds are structured to give investors less control over how and when they can pull out their money. Up to 5% of the net asset value of the venture fund can be redeemed by investors every quarter.

Max Friedrich, a research analyst with ARK, said in an interview that a key aspect of the fund will be its time horizons. Unlike many venture-capital funds, it won't be forced to sell a position after an IPO.

"We can hold on to our private companies once they're public, and we can benefit from the value creation throughout the full life cycle of a private company," Friedrich said. "With the early feedback that we're getting from private companies, we hear that's a compelling value proposition to be a true long-term partner."

He added that ARK is excited to be moving into "social distribution" with Titan. The low minimum investment means any individual investor can potentially invest "without encountering qualification or accreditation thresholds." ARK also has plans to expand beyond Titan to offer the venture fund on advisor platforms, but the timeline for that remains murky.

Scroll down to get caught up on other recent fintech news you might have missed in our Wealthtech Weekly recap. And check out last week's recap here.

Why more millennials are saying 'no thanks' to cryptocurrency in 2022

“The logical step once the bitcoin futures market exists is to reevaluate whether it’s suitable to refile the ETF” listing request, said Gabor Gurbacs, director of digital- asset strategy at VanEck.

Long considered the asset's most loyal backers, a new survey from Bankrate.com suggests that millennial investors are cooling on the idea of cryptocurrency.

The survey, released Wednesday, finds that the number of Americans who are "very comfortable" or "somewhat comfortable" with cryptocurrencies in 2022 dropped by more than 39% when compared to 2021. The drop is sharper among millennials where comfort levels dropped nearly 42%, according to Bankrate.

Attitudes toward and the value of crypto are moving in lockstep. Compared to the all-time highs reached in 2021, Bankrate reports that sentiment around Bitcoin and Ethereum have fallen more than 72% and 73%, respectively.

In 2021, about 35% of Americans said they had some level of comfort investing in digital currencies compared to about 21% this year. Older generations were less comfortable than last year and less comfortable than younger investors.

According to Bankrate, cryptocurrency has fallen steeply as the Federal Reserve raised interest rates to combat rising inflation. Additionally, investors worry that further government regulation, including a central bank digital currency, could derail the cryptocurrency market.

"It is a lot easier to be enthusiastic and believe in something when you see the value going up continually," Greg McBride, Bankrate's chief financial analyst, said in a statement. "But the real test of belief comes when the chips are down, and a lot of investors have realized they now feel differently about investing in cryptocurrency."

Here are some other notable stats from the Bankrate survey:

Millennials said they were "very comfortable" or "somewhat comfortable" with crypto at more than 49% in 2021. That number fell to almost 29% in 2022.
Generation X showed comfort levels of 21% this year, down from almost 37% last year.
Baby boomers, the least enthused about crypto, had comfort levels of about 21 percent last year. That tanked to just 11% in 2022.

Bankrate also suggests that millennials and Gen-Z investors are more interested in cryptocurrency because of the lack of quality financial information on social media. A 2021 CreditCards.com survey found that social media platforms or influencers were the second most popular resource for Gen Z individuals seeking financial advice.

But American adults acknowledged that social media was not a good source, stating that social media was the least trustworthy of their sources of financial advice. Just 21% said social media was trustworthy.

Meanwhile, financial advisors were viewed as the most trustworthy source of financial information with 70% of respondents saying they trusted advisors.

New Betterment partnership brings crypto portfolios to customers

Speaking of cryptocurrency, the nation's biggest independent robo-advisor will soon begin offering crypto investing portfolios to its customers.

On Thursday, Betterment announced a partnership with New York-based cryptocurrency exchange and custodian Gemini that will give the robo's more than 730,000 customers access to tailored crypto investment plans based on their risk profiles and interests.

Customers will get their first crack at Betterment's "expert-built" crypto portfolios through their accounts. Betterment for Advisors' partners will also have the ability to offer crypto to their clients.

"Betterment is built on the principles of trust, ease-of-use and diversification, and we wanted to work with a partner who not only understood our unique needs, but had the infrastructure in place to power our crypto solution in a way that aligned with our values." Jesse Proudman, Betterment's vice president of crypto investing, said in a statement.

Proudman formerly worked as CEO of Makara, a crypto investing firm acquired by Betterment in March that used Gemini's custody services for thousands of customers.

"We are thrilled to continue expanding our institutional partnerships through our integration with Betterment as we continue to provide responsible access to crypto," Marshall Beard, Gemini's chief strategy officer, said in a statement. "Through our suite of institutional offerings, we provide crypto infrastructure solutions to a growing number of leading asset managers and financial institutions on a global scale."

GeoWealth rolls out suite of upgrades to better support RIAs

GeoWealth, the Chicago-based TAMP with $18 billion in platform assets, has announced a trio of platform upgrades focused on giving RIAs more personalization and choice in their investment management programs.

For advisors in need of guidance and concierge-level support in building custom unified managed accounts solutions, GeoWealth has a new internal investment consulting division. Sparked in part by the recent hire of former J.P. Morgan exec Jen Wing as head of asset management, GeoWealth has been quietly working on a customizable service model for advisors who desire outsourced portfolio and UMA construction while retaining their individual brands.

GeoWealth also announced the release of its integrated manager portal module on the platform. The manager portal will allow third-party managers, as well as advisors managing client portfolios, to communicate portfolio updates to the GeoWealth trading team. Additionally, the portal allows asset managers to load their collateral directly to the GeoWealth model center, giving advisors easy access.

Finally, GeoWealth is expanding its model marketplace, increasing its vetted manager menu by more than 200%.

"Our mission is clear. To empower advisors by offering the technology, infrastructure and back-office resources they can leverage and customize to meet any client's needs," Colin Falls, GeoWealth president, said in a statement. "We are laser focused on building the most RIA-friendly TAMP in the market, and these new developments are indicative of our commitment to offering advisors additional customization and investment flexibility."