All Of ARK’s ETFs Saw Outflows On Friday Except Its “Flagship” Innovation Fund

All Of ARK’s ETFs Saw Outflows On Friday Except Its “Flagship” Innovation Fund

Even though the NASDAQ eventually steadied on Friday, with the broader market rallying from a morning drubbing, it was yet another day of pain for Cathie Wood and her ARK ETFs. 

Curiously, all but one fund, that is. 

As astute observer @TeslaCharts noted on Twitter over the weekend, ARK’s ETFs saw millions in outflows. ARKW and ARKQ, for example, saw $96.5 million and $197.1 million in outflows:

He also noted that ARKF and ARKG saw $94.6 million and $183 million in outflows, respectively. 

But finally, the company’s “flagship” ETF – and the one we have been highlighting over the last 2 weeks for potential vulnerabilities, wound up seeing inflows of $46.8 million, despite the fact that it was down as much as 10.3% on the day.

We had noted last week that ARKK had looked shaky into Friday’s cash open. It had plunged the day before and is well off its 2021 highs. 

And as ARK’s trade updates last week seemed to disclose, Wood’s strategy doesn’t appear to be changing. As we have been pointing out, that strategy appears to be selling large, liquid big cap names and rotating the cash into smaller, speculative, small cap names. 

This can obviously become a negative feedback loop if the “strategy” continues and ARKK continues to plunge. 

Recall, last week, well known FinTwit personality @Keubiko penned an article called “Raiders of the Lost ARKK”, which laid out exactly how ARK’s flagship ETF could find itself in hot water, quickly and without much notice as a result of compounding liquidity issues. 

“It will be important to watch the daily flows in and out of this ETF, as outflows are currently modest relative to fund size, but could pick up pace if growth stocks continue to sell off,” Keubiko writes. “It appears that, like Janus, the ARK phenomenon is yet another example of the same mistake that investors have been making for decades: plowing into investments and funds AFTER they have had an epic run.”

Tyler Durden
Sun, 03/07/2021 – 12:30

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Author: Tyler Durden

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