Morning Wood: ARK Shuts Down Its “Transparency” ETF

Apparently no one cares about ESG when the entire market is crashing off its highs – a lesson that Cathie Wood and ARK may have just learned months after launching their “transparency” ETF near the recent market top. 

The hot streak certainly seems to be coming to an end for Wood, who has had no issues launching a series of ETFs over the last half-decade, including her flagship Innovation fund, a FinTech focused ETF and a genomics ETF.

The fund sought to track the Transparency Index, which includes the 100 most transparent global companies deemed by index provider Transparency Global, the Wall Street Journal noted. The fund was once called “ARK’s version of ESG” by Bloomberg ETF expert Eric Balchunas. 

ARK is liquidating $CTRU, which is their Transparency 100 ETF which never really got any traction. This is the first-ever closure for them. pic.twitter.com/w52VaNvft3

— Eric Balchunas (@EricBalchunas) July 19, 2022

The ETF had amassed $12 million in assets and had plunged 36% since its inception. Major holdings like Teladoc and Bill.com Holdings are both down about 50% this year, the report noted. 

“While ARK investigated alternative Index providers, it did not find a suitable solution and decided to close the Fund effective July 26, 2022, or as soon as practical thereafter,” an ARK company press release announcing the closure said. 

The Fund became effective not even nine months ago, on Wednesday, December 8th, 2021, the release notes. 

Can see when looking ARK’s family why $CTRU had to go. Every other one of their ETFs is above $100m (a small miracle considering past 12mo), even Israel tech. Big problem was timing- it launched into a nightmare mkt. Still tho there are >500 ETFs out there w less aum than $CTRU. pic.twitter.com/psELpQgOjz

— Eric Balchunas (@EricBalchunas) July 19, 2022

ARK currently has 8 other ETFs to “fall” back on and the company’s flagship innovation fund is down more than 50% this year. 

We’re surprised Wood didn’t blame Jerome Powell and the Fed directly in the company’s press release…