Cathie Wood, founder, CEO and CIO of ARK Investment Management, has again hit back at critics of her firm’s flailing headline innovation product, describing them as misguided and too short-term.
Her focus was on the Tuttle Capital Short Innovation ETF (SARK), which launched as a contrarian play on the Ark Innovation ETF (ARKK) last November.
Since then, the SARK ETF has amassed an impressive $363m in assets under management (AUM), including $216m inflows and 39.2% returns since the start of this year, according to data from ETFLogic.
Responding in an interview with CNBC, Wood (pictured) said: " [Tuttle Capital] is shorting innovation and that seems to me, over time, that is not going to be a business if you ask me. But they are also not doing any research. They are simply shorting innovation.
“If they were doing research and could point us to reasons why what we [own] is not going to participate in the new world order, then we might have a conversation about it. But the idea of shorting innovation is, in America, ridiculous I think.”
Speaking to Insider, Tuttle CEO, Matthew Tuttle, countered: "SARK is a tool that investors can use to express a bearish view on the market, innovative companies, the current rising rate environment, or a [specific] portfolio manager if they wish. It is un-American to not have choices in the marketplace.”
This is neither the first time ARKK bears have made headlines, nor the first time Wood has responded to them.
At the end of Q2 last year, a 13F regulatory filing revealed Scion Asset Management, the hedge fund run by ‘Big Short’ investor Michael Burry, had taken out a $31m bet against Wood’s innovation ETF by way of put contracts against 235,000 shares of ARKK.
While Burry believed unsustainable valuations could lead to “the mother of all crashes” in digital assets and ‘meme’ stocks, Wood argued he did not understand the fundamentals driving the “explosive” growth in the innovation space.
In Q3, Scion disposed of its ARKK put positions among others but did not disclose the returns on their investment. Notably, ARKK fell 15% in Q3 2021.
Not long after, European investors were offered their first chance to gain exposure to Wood’s ARK ETF range, courtesy of nine one-to-one, short and leveraged trackers from Leverage Shares which launched in December.
Most notable among these products has been the Leverage Shares -3x ARK Innovation Securities ETP (ARKS), which has returned 134.1% so far this year, as at 22 February. ARKK fell 33% during the same period.