(Bloomberg) — The loyalty of Cathie Wood’s legion of fans may be finally waning, as the new year bloodbath in speculative technology stocks hands the star money manager a miserable start to 2022.
Investors pulled $352 million from Wood’s flagship ARK Innovation ETF (ticker ARKK) on Wednesday, according to the latest data, the biggest outflow since March. The withdrawals come as ARKK languishes at the lowest in about 18 months, having dropped more than 15% since the start of the year.
While the flow is small compared to ARK Investment Management assets overall — its nine ETFs still boast about $25 billion — it marks a potential turning point for an investor base that until now has barely wavered in its support for Wood and the firm she founded in 2014. ARKK’s outflow was its third-biggest on record; the last time the fund lost over $300 million it was trading 44% higher.
Market conditions have been turning ever-more hostile to the disruptive tech companies beloved by Wood. Rampant inflation has spurred a hawkish turn by the Federal Reserve, spelling the end to pandemic-era stimulus and the ultra-low yields that helped pump up equity valuations. Investors are pulling back from speculative bets and growth firms whose profit potential lies in the future — exactly the kind of stocks favored by ARK.
Her eight other U.S.-listed exchange-traded funds lost almost $50 million combined Wednesday. The settlement schedule for the products mean that flow data arrives with a one-day lag.
ARKK was edging higher in early trading as of 5:06 a.m. in New York.
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