After years of outpacing market returns, the ETFs from Ark Funds have lagged the market and are seeing more bearish bets placed against them. Here’s the latest on the bets against Ark and its founder Cathie Wood.
What Happened: Sen. Tommy Tuberville is betting against the Ark Innovation ETF (NYSE:ARKK) with two bets in the range of $1,000 to $15,000 disclosed in filings on Mar. 11.
The options purchased were shared by CongressTrading and show that Tuberville is placing a short bet on Ark Innovation remaining below the $65 level. The options expire on Sept. 16, 2022.
Tuberville is a senator serving the state of Alabama and was previously the head football coach at the University of Cincinnati, Texas Tech University, Auburn University and the University of Mississippi.
The move by Tuberville was criticized by many on Twitter, as it represents a congressman openly betting against several high growth companies in the U.S.
Related Link: 10 Best Stock Traders In Congress In 2021
SARK Passes ARK: In November 2021, the Tuttle Capital Short Innovation ETF (NASDAQ:SARK) was launched by Tuttle Capital to offer short exposure to the Ark Innovation ETF.
“This distinctive exposure allows investors to potentially profit from a decline in a portfolio of companies involved in disruptive industries such as electric vehicles, next-gen internet, genomics and fintech,” the press release said.
Tuttle Capital CEO Matthew Tuttle told Benzinga the ETF is not a diss at Wood, but a move to allow a better way to short high growth stocks held by the ETF.
“Whether you believe that the current bull thesis for transformational industries is stretched or your are looking to provide protection to an existing portfolio of high-growth stocks, SARK is a potentially attractive opportunity worth exploring,” Tuttle said.
The Tuttle Capital Short Innovation ETF, which began trading at $30 in November, has now passed the price of the Ark Innovation ETF as the two ETFs head in opposite directions. While the Ark Fund still has more assets under management, the crossover in the stock price is symbolic, as it represents the best and worst of high-growth stocks.
The Tuttle Capital Short Innovation ETF has $330 million in assets under management, according to ETFDB. The fund passed the $100-million AUM mark in 24 trading days and was one of the top five most active of all actively managed ETFs launched in 2021.
Why It’s Important: The Ark Innovation ETF is down 59% over the last year and has fallen 46% year-to-date in 2022.
The top holdings in the Ark Innovation ETF are Tesla Inc (NASDAQ:TSLA), Teladoc Health Inc (NYSE:TDOC), Roku Inc (NASDAQ:ROKU), Zoom Video Communications (NASDAQ:ZM) and Coinbase Global Inc (NASDAQ:COIN).
With the Ark Funds portfolio seeing large declines in prices of the holdings, investors are choosing to put their money elsewhere or hedge their positions by going short the fund.
SARK Price Action: Tuttle Capital Short Innovation ETF shares were trading 5.9% higher to $60.63 Monday afternoon, trading above a previous 52-week high of $57.49.
