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Cathie Wood's Ark Investment Management is launching its first three active exchange-traded funds in Europe to attract investors from the new continent after poor performance and capital outflows in the United States.
The investor, known for highly concentrated and volatile portfolios that can result in huge gains and losses, plans to roll out its flagship strategy across multiple European exchanges starting Thursday, Ark said in a statement. He said that.
The move to Europe comes as Ark has lost share of the $8.9 trillion U.S. ETF market over the past 12 months. Investors withdrew about $2.7 billion over the same period, including more than $1.8 billion in outflows in the first three months of 2024, according to Morningstar data.
Mr. Wood, Ark's founder and CEO, has had years of interest from potential investors across the Atlantic as he seeks to make his mark on the $2 trillion European ETF market. He said he came.
“For the past 10 years, a significant portion of our website traffic, subscriber base, inbound requests and social media traffic has come from people in Europe. This reflects strong interest and demand for Ark’s investment strategy in the European market. ” Wood said in a statement. The launch was a “declaration of a long-term commitment” to the continent.
Her U.S. equivalents of the Ark Innovation ETF and Ark Genomic Revolution ETF, as well as a third strategy “tailored specifically to the European market” focused on artificial intelligence and robotics, were announced on Thursday. It will begin trading in Germany and will subsequently debut on UK exchanges. , the Netherlands, Switzerland and Italy, Ark said.
The new product follows Ark Investment's acquisition of Rize ETF, which was rebranded last year as Ark Invest Europe, betting on European demand for thematic ETFs like Woods.
Ark's flagship Innovation ETF soared more than 150% in 2020, and its performance level trounced virtually all other competitors and put the company on the map. The fund had about $2 billion in assets at the beginning of 2020, but net new flows reached about $8 billion in the second half of the year, ending 2020 with more than $17 billion in assets, according to Morningstar Direct. It is said that he finished with his assets.
The fund fell 23% and 67% in 2021 and 2022, respectively, but bounced back in 2023 with a 68% gain. Shares are down nearly 17% since Jan. 1, as top holding Tesla has fallen about 37% this year. .
Announcing the debut of Ark's European fund, Wood said the innovation fund strategy is “designed to benefit from the impending economic transformation that is likely to exceed the historical milestones of the first and second industrial revolutions.” “It has been done,” he claimed.
Morningstar strategist Robbie Greengold earlier this month noted the “compelling” nature of the themes in which the Innovation Fund invests (artificial intelligence, blockchain technology, genetic technology, energy storage, robotics), but questioned Ark's ability to find winners and losers in the field. .
“This fund rides rough waters primarily for early-stage companies,” Greengold wrote in Morningstar. “They often promise rapid sales growth, but the returns are meager and the future uncertain. The consequences range from extraordinary to terrifying. requires a talent for predictability, which Ark Investment Management lacks.”
Morningstar estimated earlier this year that Ark had wiped out about $14.3 billion in wealth over the past 10 years, more than any other fund family.
Despite Ark launching one of the first U.S. Bitcoin spot ETFs in January, capital outflows continue. The product accumulated total assets of about $2.7 billion in the first three months, thanks in part to a market price increase of about 37%. Bitcoin price this year.
