Cathie Wood's ARK Removes Limits Restricting Investing 30% of Total Fund Assets in a Single Stock, and Owning 20% of the Total Outstanding Shares of a Single Stock

Cathie Wood's ARK Investment is removing language in its prospectus that limits its active ETFs from putting 30%+ of total assets in a single company and investing in more than 20% of the total number of outstanding shares issued by a single company or fund.

According to the amendment:

The last two paragraphs of the “Additional Information about the Funds’ Investment Strategies and Risks – Additional Investment Strategies – All Funds” section of the Prospectus are hereby deleted.

Those two sentences read (being removed):

• Each Fund will not invest more than 30% of its total assets in securities issued by a single company, fund or of short-term financial products of such company.
• Each Fund will not invest in more than 20% of the total number of outstanding shares issued by a single company or fund.

The disclosure, first pointed out by Jeffrey Ptak @syouth1 on Twitter Friday, comes as ARK has been under fire for holding heavy concentrations in a number of stocks. It also follows the blow-up of Archegos Capital on Friday after bets-gone-wrong in its highly-leveraged and concentrated portfolio.

ARK's main fund, ARKK, currently has a 10.6% weighting in Tesla (NASDAQ: TSLA).

In addition to the amendments noted above, the fund also amended its prospectus to specify the risk of investing in SPACs, and remove limits on ADRs, warrants, preferreds.

You May Also Be Interested In

• Tesla (TSLA) To Cut 14% Of Workforce At Buffalo Plant: Warn Notice - Bloomberg
• Children's Place (PLCE) Announces $90 Million in New Unsecured Financing Provided by Majority Shareholder Mithaq Capital
• Tesla (TSLA) senior VP Drew Baglino to leave the company