Building An ETF Giant Betting Against ARK

Building An ETF Giant Betting Against ARK

ETF issuer AXS is following up on SARK’s success with another fund tied to Cathie Wood’s ARK.

Senior ETF Analyst
Reviewed by: Sumit Roy
Edited by: Sumit Roy

The Tuttle Capital Short Innovation ETF (SARK) has been a huge success. Prices for the ETF have doubled over the past six months and the fund now has $430 million in assets. 

Those types of numbers are impressive for any ETF, let alone an inverse ETF. SARK is currently the tenth-largest U.S.-listed inverse ETF on the market, though it’s arguably the No. 1 most-talked-about fund in that category.  


Bold Bet & Perfect Timing  

SARK benefited from near-perfect timing; the fund launched on Nov. 9, 2021, right before growth stocks imploded, taking the ARK Innovation ETF (ARKK) down with them. 

But it wasn’t just a matter of timing. Tuttle Capital Management, the firm that was originally behind SARK, made a bold move by creating the ETF to begin with.  

An ETF that bet against ARKK—a fund that was beloved by an army of retail investors; was managed by the charismatic Cathie Wood; and was a huge winner during much of 2020 and 2021—was far from a sure thing.  

“Many investors with whom we speak, including financial advisors, are cautious on current valuations for unprofitable innovative companies,” Matthew Tuttle, CEO and CIO of Tuttle Capital Management, said on the day SARK launched.  

“Whether you believe that the current bull thesis for transformational industries is stretched, or you’re looking to provide protection to an existing portfolio of high growth stocks, SARK is a potentially attractive opportunity worth exploring,” he added. 

Tuttle’s hunch about the stretched valuations of growth stocks, and the demand for an ETF that would go up when they go down, was spot-on. 

As prices for ARKK began to roll over at the end of 2021, SARK quickly picked up $100 million in assets. Then, as ARKK’s collapse really accelerated in 2022, assets under management for SARK rocketed higher, first crossing $300 million in January and $400 million in April. 

Altogether, investors have poured about $300 million into the fund, while the other $130 million has come from price appreciation. 



AXS Takes Over  

SARK put Tuttle Capital Management on the map, helping the firm to make a mark in an ETF industry that is notoriously difficult to break in to and that is dominated by ETF giants like BlackRock, Vanguard and others.  

But just five months after launching SARK, Tuttle Capital announced that it was selling six of its ETFs to another ETF upstart, AXS Investments. SARK was one of those six funds. 

On the surface, it was a surprising move, as SARK had all the momentum in the world. But Tuttle said last month that he would join AXS as a managing director and that the sale was more like a merger—one that brought together his retail following and AXS’ connections to advisors and family offices.  

2x ARKK ETF Debuts  

With SARK in its lineup, AXS is keeping the momentum that Tuttle helped start. Just today, it launched two new ETFs—the AXS 2X Innovation ETF (TARK) and the AXS Short China Internet ETF (SWEB)—and the firm has plans to launch dozens more products, including leveraged and inverse ETFs tied to single stocks.  

TARK is a leveraged play on ARKK, while SWEB provides inverse exposure to the popular KraneShares CSI China Internet ETF (KWEB)

"Recent market conditions have created what we view as a very compelling entry point for high-conviction investors who believe in the value of innovation," Greg Bassuk, CEO of AXS Investments, said of the launch. 

It will be interesting to see whether TARK’s debut ends up being as timely as SARK’s debut half a year ago. Regardless of what happens, bringing TARK to market is a savvy move, and may enable AXS to capitalize on the buzz around Cathie Wood’s ARK funds no matter how they perform. 

If ARKK keeps dropping, SARK will benefit; if ARKK turns around, TARK reaps the rewards. 

Success Tied To ARK 

With its two ETFs, SARK and TARK, AXS has positioned itself nicely to capitalize on moves in ARKK, but lasting success is by no means guaranteed.  

Both inverse and leveraged ETFs have a tough time maintaining assets long term, largely due to performance drag from daily rebalancing (a quick example of this phenomenon is to think of a stock that drops 10% in a day; it has to rise more than 11% the next day to break even). 

Pull up a chart of any inverse ETF and you’ll usually see massive losses over multiyear time horizons. The best-performing inverse ETF over the past five years is down 0.67%, while most have done much worse. 

Leveraged ETFs are a bit different. Some of them benefit from the fact that stocks tend to go up over time, so as long as we’re in a bull market, you might see them maintain gains over multiyear periods.  

Perhaps the best thing that could happen to SARK is it becomes a go-to ETF for short-term traders or hedgers, a quick and easy way to bet against a basket of volatile growth stocks.  

In that scenario, it’d end up being something like the $3 billion ProShares UltraPro Short QQQ (SQQQ) or the $2.2 billion ProShares Short S&P500 ETF (SH), ETFs that have lost the majority of their value over the past decade, but which maintain at consistent level of assets thanks to steady inflows.  

On the other hand, the ideal scenario for TARK is to become like the ProShares UltraPro QQQ (TQQQ), a $14 billion fund that’s ridden the decade-plus bull market in tech stocks to massive gains.  

In both cases, lasting success may depend on interest in Cathie Wood’s ARK staying high. Tuttle shrewdly tied SARK to ARKK, benefiting from its halo.  

Today, ARKK is a de facto benchmark for disruptive tech stocks. But if interest in ARKK or Cathie Wood wanes for whatever reason, the halo around the firm could dim, dampening interest in derivative funds like SARK and TARK. 


Follow Sumit on Twitter @sumitroy2     

Sumit Roy is the senior ETF analyst for, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for, with a particular focus on stock and bond exchange-traded funds.

He is the host of’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays,’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.