"Wooden Sister" falls, "short ARCK" ETF is full! In more than two months, it soared by 50% to absorb more than $200 million in gold

At the beginning of the new year, with the high-valued technology stocks in the United States suffering a critical blow, Cathie Wood, the head of Ark Investment and known as the "goddess of female stocks", lost its aura, and its flagship fund ARK Innovation ETF (ARKK) has fallen 20% this year. An ETF focused on shorting ARKK surged 22 percent over the same period, up about 50 percent since its inception, sucking up $234 million.

In early November 2021, Asset Management Launch Capital Management launched Tuttle Capital Short Innovation ETF (SARK), an ETF dedicated to shorting ARKK funds. The young fund has returned about 50% since its inception, which is quite impressive.

Notably, about $200 million in the fund's assets came from inflows, demonstrating a strong willingness on investors to short Wood.

Wood is known for investing in disruptive innovative technology companies. Today, rising Treasury yields and expectations of tighter monetary policy are weighing on high-growth tech stocks, with many of Wood's favored stocks bearing the brunt. So far this year, ARKK has plummeted by about 20%.

SARK profited when ARKK fell, and the fund shorted ARKK through swap contracts, winning a large following in the environment of a plunge in technology stocks and achieving capital inflows for 10 consecutive trading days. Along with the fall in ARKK, SARK has risen 22% this year.

While reverse funds are not uncommon in the $6.9 trillion U.S. ETF industry, SARK differs in that it focuses on only one fund.

Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, said: "Any standalone ETF with more than $200 million in assets can be said to have been an unexpected success, let alone done so in the first three months of its existence. ”

James Seyffart, an ETF analyst at Bloomberg, said: "To be honest, I am not surprised by SARK's gold absorption, the trend is your friend, for ARK, the current trend is still negative. ”

Matthew Tuttle, CEO of Tuttle Capital Management, noted that SARK has recently seen inflows of money even on the days when ARKK was rising. In his view, this shows that investors are increasingly viewing the fund as a hedging tool or a bet on the macro environment, rather than just going short ARKK.