Investors now have a way to bet that Cathie Wood’s ARK will sink, at least on a day-to-day basis.
SARK aims to produce the daily inverse returns of ARKK, the $21.8 billion flagship fund of ARK Invest Management that generated a stunning 152.52% return in 2020 on the back of Wood’s fervent belief in disruptive technologies and a sizable holding of Tesla stock.
ARKK has had a less favorable 2021, returning a loss of 0.08% year-to-date. A little more than 16% of the ETF’s shares outstanding were sold short as of mid-October, according to Bloomberg data.
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Tuttle Capital CEO Matthew Tuttle told ETF.com that market demand exists against the popular fund.
“Certainly ARKK has trailed the market by a wide margin this year. When you throw in the performance of Tesla, it makes it even more head scratching,” he said.
“The recent Zillow move was also not a great look,” Tuttle added, referring to ARKK acquiring and later selling the stock after the company revealed plans to sell billions worth of homes it acquired through its automated Offers platform and lay off a quarter of its staff.
According to its daily trade reports, ARKK acquired approximately $24.6 million in Zillow stock on Nov. 2, or 288,813 shares, after the stock fell from the $106 level on Nov. 29. Since then, the fund dumped nearly 5.8 million shares through the end of last week when the stock was trading in the mid-$60 per share range.
Tuttle also argues that SARK can be a bet against “unprofitable tech” and as part of a long/short equity strategy alongside more profitable technology sectors.
The firm first filed for the ETF under the Short ARKK ETF name in late July, but later renamed it the Short Innovation ETF. Tuttle declined to say why the name was changed.