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Ark Investment Management chief executive Cathie Wood has stepped down as portfolio manager of the company’s two index funds, in the third shake-up of the firm’s portfolio management roster in as many months.
Will Scherer, until now a trading manager at the firm, has been appointed portfolio manager of the $192mn 3D Printing and $110mn Israel Innovative Technology exchange traded funds, the firm has disclosed. Wood remains Ark’s chief investment officer, as well as portfolio manager on the actively managed funds.
In June, Sam Korus and Nicholas Grous were appointed associate portfolio managers. Until then, Wood was the firm’s only PM. This month, Korus was reassigned as a research director, and Dan White, formerly a client portfolio specialist, was elevated to associate portfolio manager.
Ark has drawn criticism for potential key-person risk because of Wood’s centrality to the firm’s fund management operations.
This article was previously published by Ignites, a title owned by the FT Group.
Early last year, when Ark’s funds were undergoing rapid growth and robust returns, Morningstar warned that Wood had become “essential to the firm’s continued success” and that the firm lacked experienced portfolio management talent beyond her.
Since then, Ark’s returns have soured and fund flows slowed.
Altogether, Ark’s ETFs recorded net outflows of $5.2bn during the year ended August 31, according to Morningstar Direct. During that period, investors pulled $136mn from 3D Printing and $87mn from Israel Innovation Technology.
It is unclear whether the latest appointments will assuage analysts’ concerns over Ark’s portfolio management inexperience. Scherer has been with Ark since 2014, his company biography says, and worked directly with Wood. Before joining Ark, he was as an intern at TIAA.
*Ignites is a news service published by FT Specialist for professionals working in the asset management industry. It covers everything from new product launches to regulations and industry trends. Trials and subscriptions are available at ignites.com.
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Source: Financial Times