There's Now An Anti-ARKK ETF

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by Tyler Durden
Sunday, Aug 01, 2021 - 09:55 AM

There's now a convenient way to bet against everyone's favorite fund manager, ARK Invest's Cathie Wood. 

That's due to the new "SARK" Short ARKK ETF which proposes to track the inverse performance Wood's $23 billion ARKK Innovation ETF, according to Bloomberg. The ETF will track the inverse performance through swaps contracts and charge the same fee as the ARKK fund, which is 0.75%. 

Matt Tuttle, chief executive officer at Tuttle Capital Management LLC, will manage the fund. 

While Bloomberg refers to the ETF as a "bold bet against one of 2020’s most successful managers," we can't help but be reminded of the old adage that past performance is not indicative of future results. 

And that appears to already be the case for 2021, where the ETF is down by 3.6% so far this year. 

Tuttle told Bloomberg: “In sum, as ARKK already represents a long exposure to a basket of unprofitable tech stocks, we thought that investors should have access to the short side as well. Keep in mind there are a lot of non institutional investors, that cannot short stocks or ETFs or they may have trouble finding a borrow to put on the short."

The ETF could be right on time, too. As Bloomberg notes, short interest in ARKK is currently at 4.6% of shares outstanding and hit a record interest of 5.3% in March. 

Meanwhile, Wood's "active management" has recently included scooping up almost 1.3 million shares of Robinhood.