5 Hedge Funds Betting Against Cathie Wood’s ARK Innovation ETF

1. Laurion Capital Management

Laurion Capital Management is a New York-based hedge fund led by Benjamin Smith with a portfolio value of more than $18 billion. Latest data reveals that the fund owned PUT options against 1.3 million shares of ARK Innovation ETF (NYSE: ARKK) at the end of June 2021 worth $171 million, representing 0.95% of the portfolio. It is ranked first on our list of 10 hedge funds that are betting against Cathie Wood’s ARK Innovation ETF.

A top holding of Laurion Capital Management is JD.com, Inc. (NASDAQ: JD), a retail infrastructure provider based in China. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management LLC  is a leading shareholder in JD.com, Inc. (NASDAQ: JD) with 51.5 million shares worth more than $4.1 billion. 

In its Q1 2021 investor letter, Arisaig Partners, an asset management firm, highlighted a few stocks and JD.com, Inc. (NASDAQ: JD) was one of them. Here is what the fund said:

“Our largest holding as a firm, JD.com, we expect to grow earnings at an annualised rate of 30% over the next five years, implying it will trade on an EV / EBITDA of 7.5x at the end of this period. Is this a growth stock or a value stock? Does anyone care? Do these labels really matter?

For the Asia Fund, with a higher pre-existing allocation to our core FMCG holdings coming into the year, we took advantage of capital market volatility to further concentrate on our highest conviction names. JD.com has been the main destination for our limited reallocations as evidence continues to emerge supporting our thesis that the company has a strong right-to-win in the large and highly fragmented USD1.8th Chinese grocery market. We have also been encouraged by the fact that after years of persistence, the company is beginning to engage with us on ESG issues (we have specifically discussed data protection, climate change and the circular economy). ESG is now being considered at the board level, and specific sustainability reporting should follow in the coming months. Having long displayed a healthy obsession with customer service, we interpret these latest conversations as a sign that JD is beginning to develop a more sophisticated understanding of its impact on all stakeholders.”

You can also take a peek at 10 Reddit’s WallStreetBets Meme Stocks Hedge Funds are Piling Into and 10 Biggest Hedge Fund Casualties of Reddit WallStreetBets’ Short Squeezes.

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