Cathie Wood’s ETF assets fall below $ 40 billion, but loyal fans stay | Financial market news


The founder of Ark Investment Management LLC now controls $ 39.7 billion in its funds traded on the U.S. stock exchange, down from more than $ 60 billion at most in February, according to data collected by Bloomberg.

With the recent fall in technology, the cash Cathie Wood manages on its ETF line has just fallen below $ 40 billion, but its loyal fan base is largely pending the trip.

The founder of Ark Investment Management LLC now controls $ 39.7 billion in its publicly traded funds in the United States, below the more than $ 60 billion high in February, according to data collected by Bloomberg. The firm is now the 11th largest issuer in the United States, compared to seventh place earlier this year.

Much of the loss is due to the fact that their holdings fell sharply, as speculative tech names with high valuations and massive rounds return to the ground. Its flagship ARK Innovation ETF (ARKK) has fallen by about 35% from its maximum. However, the mass exodus that some had predicted during a period of low performance has not yet materialized, with traders withdrawing only $ 76 million from the fund in April and $ 301 million through May. , compared to the $ 7.1 billion added in the first three months of the year.

“It seems investors still believe in Cathie Wood’s philosophy and think the withdrawal is possibly short-term,” said Mohit Bajaj, ETF director at WallachBeth Capital.

In fact, the firm’s ETFs have still earned $ 15.3 billion net so far in 2021. The eight-product line (six actively managed funds and two tracking indices) has only lost about $ 800 million net since the end of February.

Although retail activity has declined in a broad market, it seems that day traders are ready to keep up with Ark. Approximately $ 1.1 billion of the $ 28 billion added to the fund family since November can be attributed to retail investors, according to a Vanda Research report.

“In periods when Ark ETFs have seen large redemptions, retail investors have bought in the fall, further highlighting the institutional-retail divide,” wrote analysts Ben Onatibia and Giacomo Pierantoni.

Throughout the recession, Wood has repeatedly said that his strategies have not changed and that he is investing with a time horizon of five years. He even added his stakes in Twitter Inc., Roku Inc., Skillz Inc. and Peloton Interactive Inc. last week.

Some are now wondering how long the fall in funds will last, especially as buyers intervene. ARKK rose in early operations before falling 3.3% from 1 p.m. in New York.

The open interest in bullish call options in ARKK is the all-time high, and even similarly high activity in bearish sales contracts has historically happened before a rebound, wrote Chris Murphy of international group Susquehanna on a note.

“It’s been sold from a technical standpoint,” said Matt Maley, market strategist at Miller Tabak & Co. “Weak hands have already been sold, so we’re now in ‘wait and see’ mode. If Ark funds can bounce back strongly, the flag will be raised completely clear.”

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