Cathie Wood’s ARK loses patience with Chinese equities

Text size

ARK Investment Management is renowned for investing in companies whose profits are years, if not decades away. But even the growth-oriented investor has seen his patience tested by China’s regulatory crackdown.

At a monthly investment seminar, ARK CEO Cathie Wood discussed a “valuation reset” in China’s tech sector, according to Bloomberg News. “From a valuation standpoint these stocks have gone down and again from a valuation standpoint they will likely stay down,” she said.

Tuesday the

ETF Innovation ARK

sold for $ 25 million

Tencent

to reduce its stake in the Chinese Internet company to 0.1% of the portfolio. The weighting of China in this fund is now less than 1%, up from 8% in February, and the weight of China in the

ARK Next Generation Internet ETF

is the lowest since at least 2014, according to Bloomberg.

Lily: Fund manager Ryan Jacob takes over ARK funds from Cathie Wood with new ETF

Wood is not the only foreign investor to be impatient with China. According to the Bank of America survey, global fund managers left the emerging markets led by China in July for most of all asset classes.

China has taken a series of measures against domestic tech companies, including

Ali Baba

and

DiDi Global,

in areas such as competition, data privacy and financial services.

Even in a year when the

ARK Innovation ETF

struggled with performance, with a fund down about 2% it still attracts $ 6.95 billion in inflows, according to FactSet, which is the eighth highest of all exchange-traded funds.