Go back to all blogs
Cathie Wood's Ark is no longer among the top ten ETF issuers

According to Bloomberg Intelligence, Cathie Wood's Ark ETFs have lost their luster due to inflation fears, with the firm now ranked as the 11th largest issuer by assets.

Ark Investment Management is slipping after rocketing to the top of the US exchange-traded fund leaderboard.

According to Bloomberg Intelligence data, Cathie Wood's business is currently the 11th largest issuer by assets, with $42.4 billion in ETFs.

Earlier this year, the money manager broke into the top ten, bolstered by a flood of inflows as investors flocked to Wood's unique concept. However, competition is heating up precisely as Ark's flagship $21 billion ARK Innovation ETF loses its luster (ticker ARKK).

WisdomTree has gained ground as the firm's assets have decreased marginally. Meanwhile, Dimensional Fund Advisors, a relative newcomer to the sector, is closing up on Ark, with less than $3 billion separating the two issuers following the quant giant's latest mutual fund conversions.

ARKK, on the other hand, has dropped over 5% this year after jumping nearly 150 percent in 2020, as the possibility of inflation and increasing rates dims the appeal of Wood's long-term tech investments.

"No one is fleeing the building, but the market hasn't been as supportive of core funds as it was in 2020," said Dave Nadig, chief investment officer at analytics firm ETF Trends. "Add in significant asset growth in 'big cheap beta,' as well as major developments like DFA switching funds, and the top of the leader board will be in motion for a while."

In 2020, Wood and Ark's ETFs outperformed the market because of large allocations to electric vehicle producer Tesla Inc. and other innovative firms. When Treasury yields rose sharply this year, many growth-oriented stocks were pushed out of the market.

While interest rates have fallen in recent months, many of Ark's past high-flyers have failed to recover due to inflationary fears.

To be sure, Ark funds have received $12.6 billion in new money so far this year. According to Bloomberg Intelligence's Eric Balchunas, it's far too early to pronounce the company dead.

A year ago, Wood's whole ETF portfolio was worth roughly $15 billion. Assuming there isn't a significant departure, he believes "Ark mania" might resurface if speculative technology stocks become popular again.

"While Ark craze may have subsided, Ark is still alive and strong with a market capitalization of more than $40 billion, which is an incredible amount for an active indie issuer," said ETF analyst Balchunas. "If they can persevere through these difficult periods, it bodes well for when they return to 'shiny object' mode."