Cathie Wood Is Aggressively Selling Chinese Stocks Like JD, Pinduoduo But Still Keeping An 'Open Mind'

Cathie Wood-led Ark Invest has in the recent past been cutting exposure in the Chinese tech stocks as Beijing’s crackdown on the sector intensifies but the popular money manager is not shutting the door on them yet.

What Happened: Wood on Tuesday said she is keeping an "open mind" on Chinese stocks as she believes there are still some very interesting companies in the innovation space, Bloomberg reported, citing the popular asset manager. 

The New York-based Ark Invest has been significantly cutting her stake in companies such as JD.Com Inc JD, Pinduoduo Inc PDD — two stocks that the investment management firm was betting heavily on just months ago. Wood’s firm has also trimmed stakes in Tencent Holdings TCEHY and Alibaba Group Holding BABA. 

“Well, I would say in any of the areas that we’re looking at right now, the multiple structure, the valuation structure of those companies is down and probably not going to come back very quickly, may even go down more,” Wood told investors during a webinar. 

“I’m sure we’re going to find some very interesting companies in the innovation space, and so we’re going to keep an open mind there.”

See Also: Hot Chinese Stocks Are Falling On US-China Relations, Regulatory Concerns And Research Firm Says Institutions Are Buying The Dip

Why It Matters: Ark Invest’s largest fund, the Ark Innovation ETF ARKK, lowered its exposure in Chinese companies to less that 0.18% in August of its $23 billion in assets from 8% in February, Bloomberg noted.

U.S. listed Chinese stocks such as Alibaba, Tencent, JD.com, and Nio Inc NIO have over the last several days plunged as Chinese authorities increased scrutiny on tech companies over monopolistic practices and data security.

Experts believe the regulatory environment will remain tight this year but the recent sell-off provides a good entry point for long-term investors.