Report: investors pulled $2.7B from Cathie Wood’s funds since June

Cathie Wood’s Ark Invest became a top pick for investors after the firm’s flagship ETF returned 150% last year. Consequently, the investment management company that took in $20 billion last year saw another $16 billion in investments through the first half of 2021.

Why investors are parting ways from Wood’s funds

The second half, however, is not being kind to Wood’s Ark Invest. In its recent report, Barron’s cited FactSet data that investors have withdrawn a net $2.7 billion from the firm’s six actively managed ETFs since June.

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Investors are parting ways because Wood’s funds have failed to replicate the stellar performance of 2020. The ETFs have sizable holdings in many stocks that could only justify their current “lofty valuations” if they saw enormous growth in the future. But with the rising risk of inflation and higher interest rates, the future of these companies hangs in the balance.  

Cathie Wood buys U.S. listed Chinese stocks again

The report comes only days after Wood bought 59,000 shares of JD.com and 235,000 shares of Tencent Holdings via her fintech ETF. That came as a surprise for investors since she had pared back all exposure to Chinese companies only a month ago. Just last week, Wood said on CNBC’s “TechCheck”:

“We have never said the Chinese names are uninvestable. What we have said is, because of the social re-engineering that’s taking place in China that the valuations associated with these companies are damaged, and we don’t think they’re going to go up anytime soon.”

According to Forbes, the U.S.-listed Chinese stocks lost another $150 billion in market value in the week of August 20^th. Wood’s flagship ARK Innovation ETF is now down more than 20% from its peak in February.