Cathie Wood's ARK lands on European shores with Rize ETF acquisition (updated)
20/09/2023 20:26
(Adds AUM figures for US, euro ETFs)
By Bansari Mayur Kamdar
Sept 20 (Reuters) - Popular investor Cathie Wood is
entering the European market with the acquisition of Rize ETF,
but some investors are skeptical about the one-time pandemic
darling's foray into the region's nascent ETF market.
Wood's ARK Invest acquired Rize ETF, a provider of thematic
and sustainable investing, from British asset and wealth
management business AssetCo ASTO.L in a private deal for an
undisclosed amount on Tuesday, it said in a statement.
The Rize ETF brand will be phased out, as the platform
transitions into "ARK Invest Europe."
Thematic ETFs, which usually track high-growth and volatile
stocks, are seeing a recovery this year after sharp outflows
last year following their pandemic-era boom, investors said.
Shares of Ark's flagship fund, ARK Innovation ARKK.N ,
have gained 33% so far this year, after two straight years of
sharp losses.
"It will be interesting to see the demand for ARK products
in Europe, especially after a few years of poor performance,"
said Laith Khalaf, head of investment analysis at AJ Bell.
"ARK now has a foot in the European door, but it still has
work to do to persuade fund buyers they need exposure to their
specialist, high-octane fund range."
As of Aug. 31, 2023, Rize ETF managed $452 million across 11
UCITS ETFs distributed throughout Europe, according to its
statement.
ARK, meanwhile, manages nearly $25 billion in ETFs and other
products globally.
ARK Invest in a statement said the acquisition was driven by
dynamic shifts in the investment landscape and Europe's growing
appetite for active ETFs.
Overall, adoption of active ETFs in Europe has lagged U.S.
peers, according to Kamil Sudiyarov, product manager at VanEck
Europe.
European ETF assets have lagged those invested in U.S.
exchange-traded funds, according to data from Morningstar
Direct. As of the end of August, U.S.-domiciled ETFs had $7.48
trillion in assets, while Europe-based funds had a mere $1.65
trillion. The gap in assets invested in the actively managed ETF
category is even larger, with European funds having assets of
$36.14 billion compared to $441.29 billion in U.S. funds.
"Europe has a lot of catch-up to do," Sudiyarov said.
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(Reporting by Bansari Mayur Kamdar in Bengaluru; Additional
reporting by Suzanne McGee; Editing by Saumyadeb Chakrabarty and
Mark Porter)
((BansariMayur.Kamdar@thomsonreuters.com; Follow on X:
@BansariKamdar;))