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Could ARK Pose a Systemic Risk to the Market? A Look at How ETFs Work Can Help Us Find Out

Could ARK Pose a Systemic Risk to the Market? A Look at How ETFs Work Can Help Us Find Out

FromExcess Returns


Could ARK Pose a Systemic Risk to the Market? A Look at How ETFs Work Can Help Us Find Out

FromExcess Returns

ratings:
Length:
22 minutes
Released:
May 30, 2021
Format:
Podcast episode

Description

The growth of ARK investments has been one of the biggest stories of the past decade in the ETF space. its flagship fund, the ARK Innovation ETF has seen its asset explode over the past year or so. In January of 2020 the fund had about $1.8B in assets and at the peak earlier this year the fund was at $27B. 
But many in the investing community have worried that the firm's rapid growth and concentrated approach to investing could have a significant downside if investor sentiment turns against the stocks it owns and investors begin redeeming their shares in the fund. Some worry this could result in a cascading effect that could have major implications not only for ARK shareholders, but also for the market as a whole. 
In this episode we take a behind the scenes look at the ETF structure and how the way ETFs work could both contribute to and mitigate the possibility of this type of event. 
We hope you enjoy the discussion. 
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Released:
May 30, 2021
Format:
Podcast episode

Titles in the series (100)

Excess Returns is an investing podcast hosted by Jack Forehand and Justin Carbonneau, partners at Validea. Justin and Jack discuss a wide range of investing topics, including factor investing, value investing, momentum investing and behavioral finance, with the goal of helping those who watch and listen become better long term investors, all in twenty minutes or less per episode.