Cathie Wood’s Ark Invest Launches Three Actively Managed ETFs in Europe, Amid Decline in European ESG ETF Inflows and Flash Crashes on Deutsche Boerse

Cathie Wood’s Ark Invest is entering the European ETF market, launching three actively managed ETFs that will focus on innovation, genomics, and artificial intelligence. This move comes after Wood acquired Rize ETF from AssetCo last September and has now launched a European roadshow to engage professional investors. Despite concerns about its volatile track record and “FOMO-stock” reputation from retail investors, Wood said the launches are not just a result of increased interest from European investors but a “declaration of our long-term commitment to Europe.”

In Q1, European ESG ETF inflows dropped by 94% to €7.1bn from €13.8bn in the previous quarter, accounting for only 16% of the total €44.5bn inflows. This shift reflects a broader investor pivot towards US and global developed market exposures, despite general growth in European ETFs that saw assets reach a record $1.92trn. However, ESG funds are experiencing a relative decline as investors seem increasingly disillusioned with their prolonged underperformance, suggesting a potential crisis for ESG investing. Meanwhile, BlackRock’s world ETF listed on the Deutsche Boerse experienced a sudden 5% drop in price shortly after US jobs data was released earlier this month due to multiple stop orders triggered by flash crashes at 2:30 PM CET on 5 April. Despite an investigation conducted by Deutsche Boerse that revealed no signs of suspicious trading or rule violations, trading was halted after reaching a 5% volume limit based on the previous night’s closing value as a safeguard measure.