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ARK Is Closing One Of Its ETFs

ARK's newest ETF is shuttering just 8 months after its launch.

Cathie Wood's ARK Investment Management just announced that it will be closing the ARK Transparency ETF (CTRU) on July 26th.

The fund just launched in December 2021, but never really got off the ground in the way that most of the other ARK ETFs did. At its peak, it has about $20 million in assets, but the bear market this year shrunk those assets down to about $12 million. Over the course of its brief life, CTRU was down 38% and never had a day where its since-inception return was positive.

ARK made the announcement on Tuesday.

ARK Transparency ETF (CTRU) is closing.

ARK Transparency ETF (CTRU) is closing.

CTRU was always a bit of a curious addition to the ARK lineup. While its objective of targeting and investing in the most transparent companies in the world is certainly in line with the transparency that ARK offers within its own funds, it didn't convey the disruptive innovation message that the other ARK ETFs. The idea of investing in transparent companies seems like a good surface level idea, but it proved to not be enough of a factor to motivate investors to put their money into it.

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CTRU becomes the 1st ETF in the ARK lineup to close its doors and an indication that Cathie Wood and her company are no longer the Wall Street darlings that they were as recently as a year ago. At its peak, the ARK suite of ETFs managed nearly $60 billion in total. Today, that number is down to $16 billion.

Investors have pulled a net $5.5 billion out of these funds over the past year, but most of the AUM decline has come as the result of poor performance. Four ARK ETFs, including the tentpole ARK Innovation ETF (ARKK), are down at least 68% from their all-time high.

Screen Shot 2022-07-19 at 4.00.51 PM

In another deviation from the ARK norm, CTRU was just the 2nd fund in its lineup to track an index (along with the ARK Israel Innovative Technology ETF (IZRL). FactSet had previously flagged the fund as having a high risk of closure based on a lack of assets and trading interest.

All is not lost for ARK however. The company has brought in nearly half a billion dollars of new investor money over just the past month, most of it coming into ARKK. The performance of the funds has suffered greatly, but investor interest in Cathie Wood's ETFs has not. Of the top 10 thematic ETF inflows over the past month, three come from ARK - the ARK Innovation ETF (ARKK), the ARK Genomic Revolution ETF (ARKG) and the ARK Fintech Innovation ETF (ARKF).

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