Cathie Wood pares holdings of Chinese tech stocks as she expects valuations to remain depressed amid crackdown

China’s weighting in Wood’s flagship Ark Innovation ETF has plunged to less than 1 per cent from 8 per cent in February

The paring of Chinese tech holdings by one of the world’s biggest thematic fund providers underscores how the sector is losing its allure amid Beijing’s crackdown

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China’s tech shares have been beaten down by Beijing’s intensifying crackdown on internet companies. Photo: Reuters

Published: 11:21am, 14 Jul 2021Updated: 10:43pm, 14 Jul 2021

Cathie Wood’s Ark Investment Management has been selling Chinese tech stocks, with holdings in one of the firm’s funds falling to the lowest on record as Beijing’s crackdown on the sector intensifies.

China’s weighting in Wood’s flagship Ark Innovation ETF has plunged to less than 1 per cent from 8 per cent as recently as February, while that of the Ark New Generation Internet ETF has fallen to 5.4 per cent, the lowest compared to month-end figures since Bloomberg began compiling the data in October 2014.

The China weighting in Ark’s fintech ETF has remained steady at around 18 per cent.

“I do think there’s a valuation reset,” Wood, Ark’s founder and chief executive officer, said in response to questions on the outlook for larger Chinese tech firms during a monthly webinar with investors on Tuesday.

“From a valuation point of view, these stocks have come down and again from a valuation point of view, probably will remain down.”