Is there a silver lining or a chestnut in the fire?Investors began fishing for ark funds as technology stocks tumbled

2022-06-18 0 By

Financial Union (Shanghai, editor Niu Zhanlin) news, Wall Street “female stock god” Cathy Wood (Cathie Wood) believes that the ark Investment Company’s flagship fund ark Innovation ETF high-risk stocks are very cheap, the future is bound to rise.At the same time, a considerable number of investors began to fish for the bottom, waiting for them to find a silver lining or a chestnut in the fire?Just wait for time to find out.Traders shorting the ARK fund have made $999 million so far in 2022, more than the $941 million they made for all of last year, CNBC previously reported.The good news for Ark, however, is that there are signs that the army of bears is unwinding.Over the past week, investors have poured about $168m into the ARK Innovation ETF as its price has returned to mid-2020 levels, boosting net assets under management to $11.8bn, according to FactSet.But the Ark Innovation ETF is down 27% this month and has lost half its value in the past year as its tech holdings have tumbled.Larry Carroll, a financial adviser at Wealth Enhancement Group, says he has pulled more money out of the Ark fund than he initially put in because of its surge in the early days of the coronavirus, leaving him comfortable holding a large position and waiting for stocks to rebound from the downturn.”The real question is whether we should buy more and I have resisted that impulse mainly because I don’t think the Ark fund will do very well in this environment,” Carroll said.The future of venture capital funds such as Ark Innovation ETF may be seen as a microcosm of the financial market in 2022.From The Ark Fund and its components, to so-called Internet stars like GameStop and AMC Entertainment, to cryptocurrencies like Bitcoin, the most speculative assets have soared during the pandemic thanks to the huge amount of money that governments and central banks have unleashed on the market in response to the lockdown.Now, with the Fed preparing to start raising interest rates as soon as March, yields on these risky assets have started to slide, and the logic of investor behaviour has shifted and risk appetite has recalibrated.The ARK ETF was at the heart of the sell-off, with the S&P 500 down 7 per cent and the Nasdaq 12 per cent in just four weeks of 2022.The hardest hit were technology and biotechnology stocks, where companies earn little profit but command high valuations.Mr Wood’s Ark fund is betting on just such assets.Some of the ark Innovation ETF holdings, such as Spotify, Block, Zoom and Roku, are down more than 50% from recent highs.Mr Wood insists ark’s stake will rebound.”After nearly 11 months of corrections, tech innovators appear to have entered deep value territory and are now valued at a fraction of their peak,” she wrote in a blog post last month.In the past month, $1.4bn has flowed out of ark, topping the list of US ETF redemptions, according to FactSet.Net outflows over the past six months exceeded $8 billion, more than all other ETFs combined during the same period.From the second quarter of 2020 to the first quarter of 2021, about $16bn flowed into ark Innovation ETFs, bringing the fund’s assets under management to a peak of $28bn.But investors who bought from the first quarter of 2021 have been losing money until now, said Vincent Delard, head of global macro strategy at StoneX Group.Renato Leggi, a client portfolio manager at Ark, said that in the past week some investors had started buying into Mr Wood’s view of funds.Ark’s investment strategy is for the long term, she says.But Klaus Derendorf, a los Angeles-based business development executive, says he lost about 20% of his investment in the Ark Innovation ETF in less than a year and cut his losses in November.”I have to get back to real fundamentals,” he said.Disclaimer: This article is reproduced for the purpose of conveying more information.If the source is wrong or violated your legitimate rights and interests, please contact the author with proof of ownership, we will promptly correct, delete, thank you.Email address: newmedia@xxcb.cn