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- A proposed ETF from Tuttle Capital Management seeks to gain from Ark Invest's pain.
- The proposed Short ARKK ETF would enter swap contracts to bet against the flagship fund from Cathie Wood, according to its prospectus.
- Ark's Disruptive Innovation ETF fell more than 8% in July and is down about 3% year-to-date.
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A proposed ETF would allow investors to bet against Ark Invest's flagship Disruptive Innovation ETF, according to a prospectus filed with the SEC by Tuttle Capital Management.
The Short ARKK ETF would enter swap contracts to bet against Cathie Wood's highly successful ARKK ETF, which has stumbled in recent months amid a sell-off in fast growing tech stocks like Teladoc and Tesla.
Ark's Disruptive Innovation ETF fell more than 8% in July, representing its worst month since the COVID-19 pandemic sell-off last March. The ARK ETF, which has about $23 billion in assets under management, is down 4% year-to-date.
While inverse ETFs targeting specific sectors and markets are common, the inverse ETF proposed by Tuttle Capital Management stands out due to its singular focus on a single asset manager. According to data from IHS Markit, many are already betting against Cathie Wood's Ark Invest, with more than $1 billion of ARKK sold short.
The Short ARKK ETF would make it easier for investors to bet against the ARK ETF, as investors would not have to directly locate shares of the ETF to sell short. Matt Tuttle, CEO of Tuttle Capital Management, told Bloomberg that the creation of the ETF is about providing a tool investors want, and said that he admires ARK Invest and Cathie Wood.
If approved, the Short ARKK ETF will charge the same annual operating fee as the ARK Disruptive Innovation ETF, at 0.75%, and trade under the ticker symbol "SARK."
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