Bloomberg

Cathie Wood fans buckle up as ETF net worth drops to $ 40 billion

(Bloomberg) – With Tech’s recent chub, the money Cathie Wood manages on her ETF roster has just fallen below $ 40 billion – but her loyal fan base is largely hanging on the drive. Ark Investment Management LLC’s founder now controls $ 39.7 billion in its US exchange-traded funds, up from more than $ 60 billion, a high in February, according to data compiled by Bloomberg. The company is now the eleventh largest emitter in the United States, compared to seventh place earlier this year. Much of the loss is due to the fact that the value of their holdings has plummeted as speculative tech names go back to earth with soaring valuations and massive runs. Their flagship ARK Innovation ETF (ARKK) has fallen about 35% from its high. However, the mass exodus that some expected at a time of underperformance has not yet occurred. Traders pulled just $ 76 million from the fund in April and $ 301 million so far in May, compared with $ 7.1 billion in the first three months of the year. “It appears that investors still believe in Cathie Wood’s philosophy and think the withdrawal may be short-term,” said Mohit Bajaj, director of ETFs at WallachBeth Capital. In fact, the company’s ETFs still raised $ 15.3 billion net.It’s eight products – six actively managed funds and two tracking indices – have lost roughly just $ 800 million net since late February. While retail activity in the broader market has declined, it appears to be day traders, according to a report by Vanda Research, retail investors account for around $ 1.1 billion of the $ 28 billion added to the fund family since November. “At a time when Ark ETFs have seen large redemptions, retail investors have actually bought the dip, which further underscores the gap between institutional and retail companies,” write analysts Ben Onatibia and Giacomo Pierantoni. During the downturn, Wood has repeatedly said that her strategies have not changed and that she has invested over a five year time horizon. It even increased its stakes in Twitter Inc., Roku Inc., Skillz Inc. and Peloton Interactive Inc. last week. Some are now wondering how long the decline in funds will last, especially if Dip buyers step in. ARKK rose early trade before falling 3.3% from 1:00 PM in New York. Open interest in bullish call options on ARKK is at an all-time high, and even similar high activity in bearish put contracts has historically come before a rebound, Chris Murphy at Susquehanna The International Group wrote in a note: “It was done on a technical basis oversold, “said Matt Maley, chief marketing strategist at Miller Tabak & Co.” The weak hands have already sold, so let’s wait and see. ” ‘Mode. If Ark funds can bounce strongly, the all-clear flag will be hoisted. (Updates with the latest trading activity, additional details in paragraph 10) For more articles like this, visit bloomberg.com business news source. © 2021 Bloomberg LP