US Treasury Yields Surge Consecutively... 'Donnamu Unni' Halved

ARK ETF Focused on Growth Stocks Down 48% from Peak
Experts Predict Further Decline

[Asia Economy New York=Correspondent Baek Jong-min] As U.S. Treasury yields continue to surge, the fund managed by "Money Tree Sister" Cathie Wood (photo), who focuses on growth stocks, is losing face.

CNBC reported on the 6th (local time) that Cathie Wood's "ARK Innovation Exchange-Traded Fund (ETF)," which mainly invests in growth stocks, has fallen more than 48% from its all-time high in February 2021. The ARK Innovation ETF also dropped 9% this year amid the Nasdaq plunge. This phenomenon occurred as 36 out of 43 stocks in the fund fell more than 40% from their 52-week highs.

It was also reported that investment withdrawals from the ARK Innovation ETF reached $280 million just this week. John Brown, CEO of Reholtz Wealth Management, explained, "ARK's situation is worse than it was in March 2020 when the COVID-19 situation began."

While Wood insists on investing in growth stocks, hedge funds have countered with sell-offs. According to Goldman Sachs, hedge funds sold technology stocks on the largest scale in the past decade over four trading days from December 30 to January 5. Goldman Sachs reported that software and semiconductor stocks were the targets of these sales.

The surge in U.S. Treasury yields that triggered the sell-off in growth stocks continued on this day as well. The 10-year yield surged to 1.75%. The 10-year yield had fallen to 1.4% in November last year due to concerns over the Omicron variant but has been rising daily since the end of the year reflecting inflation concerns. Treasury yields are expected to rise to 2% as the U.S. Federal Reserve (Fed) hinted at a rate hike and quantitative tightening easing in March.

On this day, James Bullard, President of the St. Louis Fed, also said, "The Fed may raise rates starting in March to gain the upper hand in controlling inflation." He argued that quantitative tightening should begin soon after the rate hike. President Bullard is classified as the most hawkish member among the Federal Open Market Committee (FOMC) attendees this year.

This situation has led to analyses that Cathie Wood's decline is not over yet. Steven Weiss, partner at Short Hills Capital Partners, forecasted, "It cannot be said that ARK's stock price has hit bottom. Further declines are expected."

This content was produced with the assistance of AI translation services.