Investors fled Cathie Wood’s flagship fund in the 3rd quarter faster than any other on record

0
cathie wood
  • Investors poured out of Cathie Wood’s flagship innovation ETF at the fastest quarterly pace on record, according to a new Bloomberg report.
  • The ARK Innovation ETF, also called ARKK, saw $1.97 billion in outflows in the third quarter, marking the steepest-ever move out of the fund since its 2014 launch.
  • The turbulent quarter for ARKK adds to a tough year for the popular tech-focused ETF.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Investors poured out of Cathie Wood’s flagship innovation ETF at the fastest quarterly pace on record, according to a new Bloomberg report.

The ARK Innovation ETF, also called ARKK, saw $1.97 billion in outflows in the third quarter, marking the steepest-ever move out of the fund since its 2014 launch. Investors began to balk at ARKK in July, a trend that gained momentum throughout August and September.

Data for the last trading day of the quarter was not yet available, so that outflow number could still move around a bit, according to Bloomberg.

The turbulent quarter for ARKK adds to a tough year for the popular tech-focused ETF. After exploding nearly 150% in 2020, the fund is down more than 11% so far in 2021 and is being hit by regular outflows.

Worse, short bets against ARKK are mounting. In August, “Big Short” investor Michael Burry unveiled that he bought $31 million worth of put options that would profit from ARKK falling. Burry’s bet came just weeks after data showing that short interest in ARKK had hit an all-time high of $2.7 billion.

ARKK’s weak third quarter came during a mixed month for stock markets as concerns about supply chains, inflation, and overly optimistic valuations piled up. The broader S&P rose only 2.5% during the quarter, dragged down by a gloomier September that saw a nearly 5% drop.