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ARK fund sees largest monthly outflow in a year

Yahoo Finance's Alexandra Semenova discusses the latest flows for Cathie Wood's ARKK Innovation Fund.

Video Transcript

SEANA SMITH: The wipeout in tech and other high flyers has investors looking for the exit in Cathie Wood's flagship fund. Alexandra Semenova is here with a closer look. And what are we seeing just in terms of outflows?

ALEXANDRA SEMENOVA: Well, Seana, it appears that investors are losing faith in Cathie Wood's strategy. Her flagship ARK Innovation Fund posted its biggest outflow size in August in about a year, with investors pulling about $803 million. This comes, of course, during a very challenging time for Wood and her Ark exchange traded funds. It did see a temporary jump during that summer rally that we saw, but is continuing its slide as this tech route continues.

And on top of that, Wood has made some eyebrow raising trades. Earlier this summer, she sold Coinbase at a record low just before the stock rose up temporarily. Also making some investments in questionable companies, buying up companies like Ginkgo Bioworks, which is down 70% year to date.

And this shift in investor sentiment is a big deal for Ark because up until recently, she's been able to maintain her investors and even attract new inflows, despite all the underperformance that she's experienced. Investors really believe in the conviction that she has in her strategy. So even during times of downturn for Ark, she's been able to keep those investors with her. And this is a turn in the tide for Ark. They're really starting to question whether she can sustain this investment strategy.

SEANA SMITH: Yeah, it certainly has been a very tough time. Her fund there off just over 60% since the start of the year. All right, Alexandra, thanks so much for that.