Cathie Wood: Macro Environment Will Dictate Launch Timing

Cathie Wood, founder, CEO and CIO at ARK Invest, has said the macro environment will dictate the timing around future ETF launches following the firm’s entry into Europe.

Wood revealed the firm was looking to acquire an ETF business in Europe since 2017 before it bought Rize ETF from AssetCo in September 2023.

“The number one question we received on our website was ‘do you have any offering in Europe?’,” Wood said. “We set out a long time ago to find a partner to take us into Europe.”

The acquisition led to the launch of three active thematic ETFs which listed across European exchanges on April 18.

The strategies include the firm’s flagship ARK Innovation UCITS ETF (ARKK) alongside the ARK Genomic Revolution UCITS ETF (ARKG) and the ARK Artificial Intelligence & Robotics UCITS ETF (ARKI) which all carry total expense ratios of 0.75%.

However, Rahul Bhushan, global head of index at ARK Invest, revealed the acquisition would not lead to a string of ETF launches over the next year.

ARK Invest Europe, formerly Rize ETF, which was co-founded by Bhushan, has always been cautious about launching too many ETFs.

Since entering the market in February 2020, the thematic ETF specialist has launched just seven strategies, before adding three active ETFs last week.

Global X vs ARK Invest in Europe

This is in direct contrast to rival Global X which launched its first European-listed ETF in December 2020, however, has a 42-strong range across multiple asset classes.

Global X currently has $1.2 billion in assets under management (AUM) across its European ETF range versus $553 million in AUM for ARK Invest Europe, as of April 19.

“We have never been about launching many products,” Bhushan said. “We have always put forward the highest conviction themes. If we dilute that with lesser conviction products, we are doing the suite a disservice, 10 ETFs is plenty.”

Wood added: “The macro environment will dictate some timing of launches. We do not want to be launching something that investors would not have any appetite to adopt.”