Famed investor Cathie Wood is throwing in the towel on Chinese stocks.
The head of Ark Investment Management sold shares in technology giant Tencent Holdings and property site KE Holdings every day last week, according to data on the firm’s trading activity.
The sales came as Beijing’s crackdown on private businesses continues to send the share prices of Chinese stocks sharply lower.
Chinese regulators are taking steps to tighten their grip on the world’s second biggest economy, in a move aimed at reducing financial risk and strengthening the authority of President Xi Jinping’s Communist Party.
Most recently, the Chinese government imposed new rules that prevent companies involved in private education from making profits, raising capital or going public.
As the clampdown has intensified, so has Wood’s flight from Chinese stocks. Her largest fund, the ARK Innovation ETF, now has only 0.32% of its $23 billion U.S. in assets invested in Chinese companies, compared to 8% in February of this year.
Beijing’s latest move sent shares of Chinese technology and education companies spiraling lower, with the NASDAQ Golden Dragon China Index on track for its biggest two-day drop since 2008. Losses since February in Chinese stocks now exceed $1 trillion U.S.
Wood’s maneuvering has helped her main fund, ARKK, rebound more than 20% from its year-to-date low in May after a rough spring that led investors to pull cash from the fund for two consecutive months.
