Ark Investment Management boss Cathie Wood said her lead fund has slashed its exposure to China as the government clamps down on big tech companies in particular.
Beijing's new quest for “common prosperity” was making the People's Republic a “quite different” place to invest, she told the Mizuho Securities investor conference.
This week, gaming companies, including giants Tencent Holdings Limited and NetEase, were told by regulators to stop focusing on profits in online gaming and also to find further ways to restrict children from playing video games and streaming video.
“We have not eliminated our positions but we have reduced our positioning in China dramatically and we have swapped some of our holders, which became losers, into companies that we know are courting the government with ‘common prosperity’,” said Wood, in comments first reported on the FT.
Current holdings for Ark's flagship ARK Innovation ETF include JD Logistics and ecommerce platform Pinduoduo.
She said the latter seemed to be “basically investing for free to help the government,” she said, one of a number of companies looking to “currying the government’s favour”.
Wood said she believes Beijing will “reconsider some of these regulations with time and we won’t give up on China because they are so focused on innovation and they are so inherently entrepreneurial”.