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Cathie Woods flagship ETF is about to wipe out all gains in 2021

(Bloomberg) – A 20% drop from the world’s highest has left Cathie Woods’ flagship stock exchange fund with the smallest gain for 2021. It looked increasingly in jeopardy on Thursday.

Ark Innovation ETF (ticker ARKK) fell 5.2% at. 10:18 in New York. If we assume that the decline lasts, it will easily be seen that the fund of 22.9 billion. Dollar erases all of its price advance for the year – the latest marker on the way down to what is still one of Wall Street’s hottest products.

ARKK is trapped in a sale across expensive parts of the market, especially the technology sector, as fears of inflation grow and bond yields rise. ARKK̵

7;s largest share, Tesla Inc., fell lower on Thursday after a sharp drop a day earlier. Among some of the fund’s other major investments, Square Inc. fell. by 7%, and Roku Inc. fell 4.9%.

“In a world of low growth, where interest rates are low, inflation expectations are low and GDP growth is low, these types of companies have performed well,” said Ross Mayfield, investment strategy analyst at Baird, about ARKK’s holdings. “When bond yields rise, when the economically sensitive areas of the market like energy and finance surpass, it’s the kind of companies that first in line take it on the chin.”

Even with the recent decline, ARKK’s results in the past year are still remarkable by almost all targets. The fund has risen more than 240% since its low March nearly 12 months ago, and assets have risen from $ 1.5 billion.

ARKK and ARKW (Ark Next Generation Internet ETF) of 7.8 billion. The dollar remains two of the most effective funds in America’s 5.8 billion ETF industry. $ According to data from Bloomberg Intelligence.

For the most part, investors have remained stable during ARKK’s sale with a total of $ 611 million to the fund in trading on Friday and Monday. That is offset by the $ 150 million drawn Tuesday, the most recent day for which data is available.

“After the impressive 2020 and continued gains in 2021, some digestion can be expected given ARKK’s focus on high-growth companies,” said Todd Rosenbluth, Head of ETF & Mutual Fund Research at CFRA Research. “It will be interesting to see if investors show relative patience when downtime occurs.”

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