Billions in SpaceX IPO Arb Trades Rattle ETFs Including ARKK (1)

A series of unusual multibillion-dollar flows has rippled through the exchange-traded fund market in the past week, suggesting some major investors used a contentious method to get exposure to the initial public offering of SpaceX. At least one fund manager placed temporary restrictions on its product in a bid to curb the practice.

The biggest flows were in Cathie Wood’s flagship strategy. The $6.9 billion ARK Innovation ETF (ticker ARKK) posted a record $4.6 billion inflow late last week before recording its largest-ever outflow of $6.2 billion in the following session, data compiled by Bloomberg show. That activity ...