SARK ETF - Inverse ARKK ETF To Bet Against Cathie Wood
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- Опубліковано 10 лют 2023
- The SARK ETF allows investors to directly bet against Cathie Wood by aiming to deliver the inverse return of her ARKK ETF. It has returned a whopping 95% in a little over a year. Let’s check it out.
// SUMMARY:
Cathie Wood is at the helm of ARK Invest, whose flagship fund ARKK - the ARK Innovation ETF - saw record inflows after it returned 153% in 2020. Savvy investors knew it was probably due for a turnaround, and in late 2021 Tuttle Capital Management brought that sentiment to market with the SARK ETF, which trades on the Nasdaq exchange and seeks to provide the daily inverse return of ARKK by using swap agreements on ARKK itself.
The SARK ETF was created by Matthew Tuttle of Tuttle Capital Management in late 2021, but AXS Investments acquired their ETF lineup in mid-2022, so the Tuttle Capital Short Innovation ETF is now called the AXS Short Innovation Daily ETF. Matthew Tuttle said the sale is more like a merger and that he would join AXS as a managing director.
Since ARKK took a nosedive in 2022, SARK has returned a massive 95% since its inception in November, 2021. ARKK and the S&P 500 are down 70% and 15% respectively over the same period.
And just as ARKK itself saw huge capital inflows when it was soaring, SARK has attracted over $300 million in assets in its short lifespan thus far, which would be impressive even for a long-only fund.
Specifically, Tuttle’s thesis is that the bullish stance on the “transformational industries” that ARKK targets is “stretched.” At the very least, Cathie Wood has her work cut out for her, and she may be fighting an uphill battle over both the short term and the long term. After all, stock picking tends to underperform the market over the long term, and all else equal, Value has greater expected returns than Growth, especially at current valuations.
But just as I’d never suggest owning a poorly diversified, tech-heavy growth fund full of unprofitable companies like ARKK, I also wouldn’t suggest that buy-and-hold investors own an inverse fund over the long term. At best, SARK is a short-term tool to bet against Cathie Wood’s selection of “innovative” stocks. At worst, it’s simply a meme to provide some laughs and entertainment while overpriced Growth stocks tank.
We also can’t deny that SARK’s impressive performance thus far is largely due to near-perfect timing. To add insult to injury, just like ARKK, SARK carries a relatively hefty fee of 0.75%.
Read the blog post here: www.optimizedportfolio.com/sa...
#arkinvest #arkk #cathiewood
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What do you think of the SARK (or ARKK) ETF?
I've held SARK for about a month I've seen some fluctuations in the stock price and am up just slightly after Friday's big up day. I see the expense ratio is quite high and that will degrade the stock price but I'm curious if this also suffers from decay like other inverse funds experience.
Thanks for watching!
@@OptimizedPortfolio What are you thoughts on the question?
What an insult 😂
Indeed. Thanks for watching!