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July 14, 2021, 6:00 a.m. EDT

Ark’s Cathie Wood seems to have thrown in the towel on China

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By Steve Goldstein

Ark Investment Management CEO Cathie Wood is seemingly throwing in the towel on Chinese internet stocks. In monthly remarks, Wood discussed a “valuation reset,” according to Bloomberg News.

Ark has put its money where its mouth is. On Tuesday, the Ark Innovation ETF /zigman2/quotes/204808965/composite ARKK +2.47% sold $25 million worth of Tencent /zigman2/quotes/204605823/delayed HK:700 +2.39% stock, continuing a selling spree in the stock that has brought its holding in the Chinese internet company down to 0.1% of the portfolio. On Bloomberg’s calculations, the weighting of China in that fund is now less than 1% from 8% in February, and the weighting of China in the Ark Next Generation Internet ETF /zigman2/quotes/201846852/composite ARKW +1.02% is the lowest since at least 2014.

Tencent did get a rare bit of good news after its proposed takeover of search engine developer Sogou was approved by China’s antitrust regulator. But China has taken a range of measures against local tech companies including tech conglomerate Alibaba /zigman2/quotes/201948298/composite BABA +2.43% and ride-hailing service DiDi Global /zigman2/quotes/227703899/composite DIDI +1.59% , in areas including competition, data privacy and financial services.

As a result, Chinese stocks have been one of the worst performers globally this year. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.19% and the Hang Seng /zigman2/quotes/210598030/delayed HK:HSI +1.03% are each up 2% in 2021, compared to the 16% rise for the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.91% and the 12% gain for the MSCI All-Country World index. /zigman2/quotes/210598083/delayed XX:892400 -0.71%

/zigman2/quotes/204808965/composite
US : U.S.: NYSE Arca
$ 121.50
+2.93 +2.47%
Volume: 7.75M
Sept. 17, 2021 4:00p
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/zigman2/quotes/204605823/delayed
HK : Hong Kong
$ 461.80
+10.80 +2.39%
Volume: 23.98M
Sept. 17, 2021 4:08p
P/E Ratio
20.30
Dividend Yield
0.35%
Market Cap
$4399.69 billion
Rev. per Employee
$10.55M
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/zigman2/quotes/201846852/composite
US : U.S.: NYSE Arca
$ 150.50
+1.52 +1.02%
Volume: 455,118
Sept. 17, 2021 4:00p
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/zigman2/quotes/201948298/composite
US : U.S.: NYSE
$ 160.05
+3.79 +2.43%
Volume: 25.54M
Sept. 17, 2021 4:01p
P/E Ratio
19.78
Dividend Yield
N/A
Market Cap
$431.79 billion
Rev. per Employee
$420,723
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/zigman2/quotes/227703899/composite
US : U.S.: NYSE
$ 8.30
+0.13 +1.59%
Volume: 16.47M
Sept. 17, 2021 4:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$40.03 billion
Rev. per Employee
N/A
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/zigman2/quotes/210598127/delayed
CN : China: Shanghai
3,613.97
+6.87 +0.19%
Volume: 51.69B
Sept. 17, 2021 3:01p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
24,920.76
+252.91 +1.03%
Volume: 3.10M
Sept. 17, 2021 4:08p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,432.99
-40.76 -0.91%
Volume: 3.79B
Sept. 17, 2021 5:25p
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/zigman2/quotes/210598083/delayed
XX : MSCI Global
729.99
-5.22 -0.71%
Volume: 0.00
Sept. 17, 2021 5:10p
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