Cathie Wood Says Bill Hwang Provided Seed Funding For Ark ETFs

Cathie Wood, the founder, CEO and CIO of Ark Invest, held discussions with Bill Hwang of Archegos Capital about U.S. stocks and, in particular, the media sector back in 2013. 

What Happened: In an interview with CNBC, Cathie Wood said hedge fund veteran Hwang provided seed capital for Ark's first four exchange-traded funds. 

"He did provide the seed for our first four ETFs, and we were very grateful to him. It was at a time where market makers were sick of seeding new strategies," she said in the interview. 

Why It Matters: Hwang ran Archegos Capital Management, the family office that imploded in March and caused massive losses at a few big banks when Archegos couldn't meet margin calls. 

Wood said she had sent Hwang a note "wishing him well" after the Archegos collapse. Wood said she had no idea if Hwang had remained a shareholder in Ark ETFs.

Hwang was very successful with his family office until he began to overutilize leverage, or borrowed money, to chase higher returns in the market. The problem with this strategy comes when investments start to lose money, and the banks lending the investor money begin to get nervous and initiate margin calls.

Also, during the interview, Wood spoke about Ark ETFs and said, "The ETF ecosystem is a beautiful thing for portfolio managers."

Ark now manages a range of ETFs, including some that have been a runaway success during the pandemic boom market. They include the flagship Ark Innovation ETF ARKKArk Next Generation Internet ETF ARKWARK Genomic Revolution ETF ARKG and the Ark Fintech Innovation ETF ARKF.

Ark Invest's fund flows went from $10 billion to $80 billion in just under a year, she said, adding that the acceleration in fund flows was "parabolic."

Posted In: Archegos CapitalBill HwangCathie WoodNewsSector ETFsETFs

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.