Ark Investment Management, under the leadership of CEO Cathie Wood, is venturing into the European market with the launch of three active exchange-traded funds (ETFs) amidst challenges and outflows in the US market. Despite facing criticism for past performance, the firm aims to attract European investors with a new strategy focusing on artificial intelligence, robotics, and more.
Ark Investment Management, led by CEO Cathie Wood, is introducing its first three active exchange-traded funds (ETFs) in Europe following a period of poor performance and significant outflows in the US market. This move comes as Ark has lost market share in the $8.9 trillion US ETF market over the past year, with investors pulling approximately $2.7 billion, including more than $1.8 billion in the first three months of 2024.
Wood, known for managing highly concentrated and volatile portfolios, stated that there has been a long-standing interest from European investors. The new ETFs, which include counterparts to the US Ark Innovation and Ark Genomic Revolution ETFs and a new strategy focusing on artificial intelligence and robotics, will start trading in Germany on Thursday, followed by launches in the UK, Netherlands, Switzerland, and Italy.
This European expansion follows Ark’s acquisition of Rize ETF, now rebranded as Ark Invest Europe. Ark’s flagship Innovation ETF saw a dramatic rise of over 150% in 2020 but subsequently dropped 23% in 2021 and 67% in 2022 before posting a 68% gain in 2023. Despite these fluctuations, the fund is down nearly 17% since the beginning of 2024, largely due to a significant decline in Tesla’s stock price.
Morningstar strategist Robby Greengold has expressed skepticism about Ark’s ability to consistently identify successful investment opportunities within the themes it targets, such as artificial intelligence, blockchain technology, genetic technology, energy storage, and robotics. The firm has faced criticism for its performance, with Morningstar estimating that Ark has eliminated about $14.3 billion in wealth over the past decade.
Despite the challenges, Ark has launched one of the first spot bitcoin ETFs in the US, which has accumulated around $2.7 billion in assets within its first three months, partly due to a significant rise in bitcoin’s price this year.
