One of the most prominent female CIOs on Wall Street is Cathie Wood, who is ARK ETFs Chief Investment Officer and leads the development of ARK’s philosophy and investment approach. ARK focuses primarily on disruptive innovation and offers investment solutions to investors seeking long-term growth in the public markets. ARK ETFs made over 100%+ gains in 2020. However, in 2021, the ETF has ranked as one of the worst-performing funds. Since May of this year, the ETF has been recovering slowly from trenches. One of the most recent moves made by Cathy Woods was a dump on Chinese Stocks.
The move was made because of the Chinese government increasingly cracking down on private companies. The latest regulatory crackdown in China targeted tutoring and education companies on Friday, with companies like TAL Education, Gaotu Techedu, and others dropping over 50%. The move was one in good spirits though and helpful for students as the government banned tutoring on holidays and weekends to lessen the burden of work on students. Bigger companies like Alibaba and Tencent suffered earlier this year as they both got hit with anti-monopoly measures and fines from the government. All in all, there has been an investor exodus when it comes to Chinese stocks and the ARK ETFs are the latest to join the trend. Furthermore, some speculate this could help US stocks as investors would theoretically rotate out of mega cap Chinese tech stocks and into their US equivalents such as Amazon, Apple, Microsoft, and Google. What do you think about ARK dumping their Chinese equities, and was this a strategic move?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.