Wednesday, December 6, 2023

Cathie Wood lands in Europe by buying the Rize ETF

Ark Invest is betting big on its expansion outside the US with the purchase of Rize ETF, a major provider of thematic exchange-traded funds. The London-based company has specialized products in circular economy, cybersecurity, digital education, emerging markets, and e-commerce and sustainability, among others, which fits well with the offering of the company founded by Cathie Wood, who became one of the guru managers four ago years with its Ark Disruptive Innovation ETF fund and achieved a return of almost 150%.

In a press release, Wood believes the European ETF market offers an opportunity for strong growth thanks to interest from younger investors accessing via digital platforms, while active management of exchange-traded funds is gaining market share with innovative solutions.

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And the truth is that ETFs have become one of the segments, alongside alternative assets, that major managers are focusing on at a time when traditional funds are under scrutiny for their low returns and high investment costs. The golden age of stock market growth for tech companies when interest rates were at zero.

Rize is one of the industry’s most storied companies, as its founders were responsible for building exchange-traded fund businesses ETF Securities and Legal & General. And with the acquisition by Ark, Wood’s company begins to be fully competitive in the European market.

Until now, European investors interested in the Ark Innovation strategy could do so through a Ucits-format fund distributed by the Japanese manager Nikko AM (distributed in Spain by Selinca), which owns a stake in Ark. But once the purchase of Rize is formalized, access to Wood’s firm’s products through Ucits-branded ETFs suggests greater asset growth, although the company already manages more than 2.6 billion euros (compared to the more than 22,000 million that the company had). ETF managed in the United States). Over the year it increases by 35%, but after three years it shows an annual decline of 19%.

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Nation World News Desk
Nation World News Desk
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