By Hanna Ziady, CNN Business
Cathie Wood, the CEO of Ark Invest, is reportedly slashing her exposure to China, and switching to stocks that are in Beijing’s good books.
The Wall Street superstar revealed Thursday that her fund has significantly reduced its exposure to China amid sweeping regulatory changes that have made the investment environment riskier, according to a Financial Times report.
“We have not eliminated our positions but we have reduced our positioning in China dramatically and we have swapped some of our holders, which became losers, into companies that we know are courting the government with ‘common prosperity’,” Wood was quoted as saying.
Wood told investors at a Mizuho Securities conference on Thursday that her strategy shift was prompted by a series of regulatory changes imposed over the course of a weekend in July by the Chinese government on the country’s online education industry, the FT said.
Authorities are now focusing on social issues and social engineering at the expense of capital markets, she added. CNN Business has reached out to Ark Invest and the conference organizers for comment.
Wood’s flagship Ark Innovation exchange-traded fund (ETF) surged nearly 150% in 2020 and helped turn her into one of Wall Street’s hottest investors. Although it has underperformed this year, the fund still comfortably outstrips annualized returns delivered by the S&P 500 over the past five years.
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