Cathie Wood’s Ark Investment Management faced a fresh round of pain on Friday, with all seven of its exchange-traded funds falling.
The flagship Ark Innovation ETF (ticker ARKK) slumped 3.7% at 10:30 a.m. in New York, poised to add to a three-day losing streak in which it has dropped more than 13%. Its top holding Tesla Inc. dropped 6.6%, while other large stakes Roku Inc. and Square Inc. fell 6.5% and 7.5%, respectively.
ARKK’s sister fund, the Ark Genomic Revolution ETF (ARKG), fell 2.7% as data showed it posting a record $251 million outflow on Wednesday—the largest exit on record.
Ark’s funds have been caught up in the broad tech selloff as rising bond yields make investors cautious about expensive parts of the stock market. The firm’s products had been on a red-hot run over the past year as Wood’s strategy of targeting disruptive innovation won a legion of fans, whose loyalty is now facing its first big test.
“It shows a shift in the willingness to take risk,” said Matt Maley, chief market strategist at Miller Tabak + Co. “With long-term rates making a higher-high this week, investors are re-thinking their risk tolerance.”
The $21.5 billion ARKK saw another $95 million exit on Wednesday, the latest day for which data is available. However, technical analysis suggests some of the funds including ARKK may have fallen too far, too fast. Its 14-day relative-strength index fell below 30 on Thursday, a level most analysts consider oversold.
Meanwhile, surging bets against ARKK have eased. Short interest in the ETF has edged lower to 4.7% of shares outstanding, down from a peak of 5% on Friday, according to IHS Markit data.
This article was provided by Bloomberg News.