Cathie Wood's ARKK ETF Sees Highest Quarterly Outflow On Record

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by Tyler Durden
Friday, Oct 01, 2021 - 09:30 AM

Thursday's market rout may have cemented Cathie Wood's "flagship" innovation fund seeing its highest quarterly outflow to date. 

$1.97 billion had been pulled from the "visionary" manager's ETF through the end of late September, analysis provided by Bloomberg noted on Friday morning.

Outflow data lags by a day, so the number may vary slightly when September 30's flows are calculated and logged. 

This will mark a second quarter in a row of outflows, the writeup noted. 

If the fund sees anything less than $125 million in inflows in its last day of the quarter, it will make September the fund's worst month for outflows since it began in 2014. 

Recall, we noted back in August that skeptics were starting to circle the waters around Wood's ARKK fund.  In fact, The Big Short's Michael Burry has placed a big bet against Wood, which we detailed in this recent article.

But it isn't just Burry that is lining up to publicly offer his skepticism about Wood's capital management style, we noted in August. Others have followed suit in criticizing Wood, leading many to wonder if the borrowed time her "strategy" has been on is finally up.

Semper Augustus Investments Group LLC’s Chief Investment Officer Chris Bloomstran took to Twitter to announce his skepticism of ARK by putting together a scathing takedown of Wood during the summer months.

In noting the insane valuations of many of Wood's stocks, Bloomstran dryly wrote: “What I concluded is you and your team must be counting on growth. Lots of it."

The report notes that Laurion Capital Management LP, GoldenTree Asset Management LLC and Cormorant Asset Management LLC also hold short positions in Wood's ARKK "Innovation ETF". Short interest for the ETF in general is up to 4.6%, near its record high of 5.3% which it hit in March of this year.

Ark became everyday news last year after Wood's fund - the likely beneficiary of organized gamma squeezes by Bill Hwang, in certain names, and SoftBank, for the entire NASDAQ - brought in billions of dollar of new inflows.

We noted that Wood has been a seller of Tesla recently, likely for portfolio balance purposes. She also famously predicted that commodity prices would plunge during the spring, stating that oil would have a ceiling at $70 per barrel. If these predictions are any indication of her ability to prognosticate, it could wind up being an interesting fourth quarter for the manager. 

We all know what happened to Bill Hwang - is it finally time for Wood to pay the piper, too?