The founder of Ark Investment Management LLC now controls $ 39.7 billion in its U.S. exchange-traded funds, up from more than $ 60 billion at the peak in February, according to data compiled by Bloomberg. The company is now the 11th largest emitter in the United States, up from seventh earlier this year.
Much of the loss is due to the sharp drop in the value of its holdings, as the names of speculative technology with skyrocketing valuations and massive runs come back to earth. Its flagship ARK Innovation ETF (ARKK) has fallen around 35% from its peak. Yet the massive exodus that some had anticipated during a period of underperformance has yet to materialize, with traders only withdrawing $ 76 million from the fund in April and $ 301 million so far in May. versus $ 7.1 billion added in the first three months of. the year.
“It looks like investors still believe in Cathie Wood’s philosophy and think the pullback may be short-term,” said Mohit Bajaj, ETF director at WallachBeth Capital.
In fact, the company’s ETFs have taken in another $ 15.3 billion net so far in 2021. The eight-product line – six actively managed funds and two tracking indices – has only lost roughly $ 800 million. net dollars since the end of February.
As retail activity has declined in the vast market, it appears day traders are ready to stick with Ark. About $ 1.1 billion of the $ 28 billion added to the fund family since November can be traced to retail investors, according to a report from Vanda Research.
“In times when Ark ETFs saw large redemptions, retail investors actually bought the bottom, which further deepened the institutional-retail divide,” wrote analysts Ben Onatibia and Giacomo Pierantoni.
Throughout the recession, Wood has said repeatedly that her strategies have not changed and that she is investing over a five-year horizon. She even added to her 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 the downside buyers step in. ARKK rose early in the session before falling 3.3% at 1pm in New York.
Open interest in bullish calls on ARKK is at an all time high, and even equally high activity in bearish put contracts has historically preceded a rebound, Chris Murphy of the Susquehanna International Group wrote in a note.
“It got oversold on a technical basis,” said Matt Maley, chief market strategist at Miller Tabak & Co. “Weak hands have already sold out, so we’re now in ‘wait and see’ mode. If Ark’s funds can rebound strongly, the clear flag will be raised. ”