It is not being the year of Cathie Wood. The technology investment guru is going through disastrous months due to the poor performance of her investment funds, and this week she announced the first closure of one of her exchange-traded funds (ETFs), the one linked to the transparency of companies.
The ARK Transparency ETF will close the blind on July 26, without the cause being attributed to Wood’s firm. The company Transparency Global has announced that it will stop calculating the corporate transparency index on which the operations of the ARK Invest index fund were based, so the investment company has looked for possible substitutes but has finally decided to terminate this ETF.
Until the 26th, shareholders can trade their shares as normal, but from that date until the 29th, which will be the final closing, shareholders may have problems placing their shares. By that 29th, those who have not sold their shares will receive cash from the fund in proportion.
The ARK Transparency ETF, and so far this year it has lost 36.4%, a percentage similar to what has fallen since its inception. The exchange-traded fund emulated the now-defunct index, which focused on the 100 most transparent companies on the US stock market while avoiding those related to fossil fuels, tobacco and alcohol. “The most transparent companies must develop high customer satisfaction, low financial crime, low environmental violations and offer long-term growth potential for their investors,” the company explained.
Its top holdings to date were Teladoc, Bill.com, Netflix, Shopify, Spotify, Splink and Docusign. No firm exceeded 1.2% of the total fund, and among the big names that exceeded the weight of 1% were Nvidia, AMD, Amazon, Apple, Adobe or Starbucks. By geographical area, its exposure was mainly to North America, with almost 80%, followed by Western Europe with 12%.
The closure of the transparency fund is just one more bad news to add to the poor performance of ARK Invest’s bets in this 2022. None of its nine exchange-traded funds has left less than 28% so far this year, and its ship flagship ARK Innovation loses 57.7% since January 1. The setbacks in the last 12 months reach 70%, although five of them have been trading in positive since they were created, although the maximum revaluation is 15%. The data is tremendously poor if one takes into account that, for example, ARK Innovation grew by 152% in 2020.
Despite his poor performance, the company’s nine ETFs have raked in another $167 million so far this year, so it seems Wood’s guru aura isn’t fading, at least among some investors, who are still waiting for another miracle like the one the manager achieved in the first year of the pandemic. Currently, they manage more than 14,000 million dollars in assets between all their exchange-traded funds.
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