Cathie Wood’s Ark Invest has launched three actively managed ETFs spanning innovation, genomics, and artificial intelligence in Europe. Despite the launch, questions have been raised about whether Wood’s success will be replicated in this market. After acquiring Rize ETF from AssetCo last September, ARK is holding a European roadshow to engage professional investors. However, concerns about its volatile track record and ‘FOMO-stock’ reputation from retail investors remain.
In Q1 2021, European ESG ETF inflows dropped by 94% to €7.1bn compared to €13.8bn in the previous quarter. This decline reflects a broader investor pivot towards US and global developed market exposures. Despite the overall growth in European ETFs – which saw assets reach a record $1.92trn – ESG funds are experiencing a relative decline as investors seem increasingly disillusioned with their prolonged underperformance. This could potentially signal a crisis for ESG investing.