While the State of Wisconsin Investment Board bought shares of BlackRock’s spot bitcoin ETF last quarter, it also trimmed shares of two ETFs from Cathie Wood’s ARK Investment Management and cut its entire position in a third, a regulatory filing showed.
ARK Next Generation Internet ETF, a name that had appeared consistently in SWIB’s 13-F holdings since its report for the quarter ended June 30, 2022, was absent from SWIB’s 13-F for the quarter ended March 31, filed with the Securities and Exchange Commission on May 14.
Madison-based SWIB previously held 77,180 shares of the ARK Next Generation Internet ETF, according to the pension fund's 13F for the quarter ended Dec. 31, which listed the value of those shares at about $5.9 million.
SWIB’s most recent filing also reflected fewer shares of both the ARK Innovation ETF and the ARK Genomic Revolution ETF than its report for the quarter ended Dec. 31. SWIB manages $155.1 billion in assets, including the $132.4 billion Wisconsin Retirement System.
SWIB’s report for the quarter ended March 31 also showed that it held 2.45 million shares — valued at $99.2 million — of BlackRock’s iShares Bitcoin Trust, one of 10 spot bitcoin ETFs that began trading Jan. 11 after the SEC approved 11 applications a day earlier.
“SWIB does not comment on specific investment decisions,” a SWIB spokesperson said.
SWIB held 193,500 shares valued at $9.7 million of the ARK Innovation ETF, SWIB’s 13F for the quarter ended March 31 showed. That was down from the 704,100 shares valued at $36.9 million shown in its 13F for the quarter ended Dec. 31.
Similarly, SWIB held 744,200 shares valued at $21.4 million of the ARK Genomic Revolution ETF, SWIB’s 13F for the quarter ended March 31 showed. That was down from slightly more than a million shares valued at $34.4 million as reflected in its report for the quarter ended Dec. 31.
The ARK Innovation ETF, which returned nearly 68% in 2023, is down more than 14% this year through May 16, according to Morningstar data. The ARK Genomic Revolution ETF is down more than 19% this year through that date, after returning more than 16% in 2023.
The ARK Next Generation Internet ETF is up more than 1% this year through May 16 after returning 97% in 2023, Morningstar data showed. In 2022, the ETF was down more than 67%.
FOMO sleeve
“It’s like a FOMO sleeve of the portfolio,” said Bryan Armour, director of passive strategies research for North America at Morningstar Research Services, a Morningstar subsidiary, regarding the shares of the iShares Bitcoin Trust and ARK ETFs in Wisconsin's filing. FOMO is an acronym for "fear of missing out."
“I think of it as a funny money sleeve of the portfolio, but the weights are so small that performance won’t make or break the pension fund’s performance,” he said.
While Armour doesn’t see why pension funds would ever need to hold bitcoin, “a responsible-sized investment isn’t completely irrational either,” Armour said.
ARK did not respond to a request for comment. Wood, who is ARK’s CEO and CIO, founded the firm in 2014 “to focus solely on disruptive innovation,” according to her biography on the firm’s website.
