Flow magnets: China and Cathie Wood's poster child  

The trend ‘Digital Infrastructure and Connectivity’ appealed to investors last week propelled by a cash influx into Cathie Wood’s poster child ETF, which netted USD$458 million. Meanwhile, ‘Emerging Markets Awakening’ lured USD$ 407 million of investors’ capital over hopes of a phased Shanghai reopening. 

Investments in Digital Infrastructure were amongst the highest 

‘Digital Infrastructure and Connectivity’ was the trend of choice for investors last week. It attracted USD$458 million of new capital driven by a big cash influx into the ARK Innovation ETF (ARKK). In fact, ARKK pulled in the most assets among the 896 Thematic ETFs in the space, registering USD$534 million in net inflows, and continuing three straight weeks of inflows. Daily inflows were relatively small for the USD$8.9 billion ETF, but net inflows for the year reached USD$1.9 billion. And that’s for an investment that has plunged as much as 61% this year. The Digital Infrastructure and Connectivity trend benefitted from Wood’s investors staying on her side despite her strategy incurring heavy losses since the beginning of the year.

‘Digital Infrastructure and Connectivity’ and ‘Cryptocurrency’ were the only two themes following the ‘Digital Infrastructure and Connectivity’ trend that managed to attract investors. ‘Digital Infrastructure and Connectivity’ was the theme that dominated flows into the trend pulling in USD$540 million in net inflows last week. ‘Cryptocurrency,’ the second theme to lure in investors, netted USD$120 million of inflows. 

Conversely, none of the other themes capturing this trend’s investment opportunity saw any cash influx. In fact, ‘Cybersecurity,’ ‘FinTech,’ ‘eCommerce,’ and ‘Next Generation Internet’ lost assets in the magnitude of USD$20 million, USD$22 million, USD$26 million, and USD$132 million, respectively.  

ETFs in play:

• Cryptocurrency ETFs
• Cybersecurity ETFs
• Digital Infrastructure and Security ETFs
• eCommerce ETFs
• FinTech ETFs
• Next Generation Internet ETFs

Investors pump money into Chinese Equity ETFs 

The CSI 300, a major Chinese equity gauge, jumped 2% last week after tanking 20% since the beginning of the year. Investors flocked to Chinese Equity ETFs amid hopes of a Chinese stock market rebound. It became clear that Shanghai’s lockdown was waning with community covid cases approaching zero. ‘Emerging Markets Awakening’ came in second in terms of the highest weekly inflows. The trend secured USD$407 million in net inflows, most of which came from investments in the ‘China Digitalization’ theme, which netted USD$366 million. Themes such as ‘China Disruptive Technology,’ ‘Emerging Market Future Mobility,’ and ‘Consumer Growth’ managed to attract USD$56 million, USD$7 million, and USD$0.6 million, respectively. Others capturing the ‘Emerging Markets Awakening’ investment opportunity failed to attract investors, with net outflows totaling USD$24 million last week. 

ETFs in play:

• China Consumer Growth ETFs
• China Digitalization ETFs
• China Disruptive Technology ETFs
• China Life Sciences ETFs
• China New Economy
• Emerging Markets Awakening
• Emerging Markets Consumer Growth
• Emerging Markets Digitalization
• Emerging Markets Disruptive Technology
• Emerging Markets Future Mobility
• Emerging Markets Infrastructure
• Sustainable Development Projects

Data for this article is as of May 13th, 2022.

Disclaimer: This article is limited to the dissemination of general information pertaining to investment strategies and financial planning and does not constitute an offer to issue or sell, or a solicitation of an offer to subscribe, buy, or acquire an interest in, any securities, financial instruments or other services, nor does it constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment.