Matthew Tuttle Timed His Anti-ARKK ETF Perfectly And Has $350 Million In Inflows To Show For It
Over the last couple of weeks, we have written extensively about the plunge in Cathie Wood’s flagship “Innovation” ARKK fund.
But it’s the man who is making money while ARKK flounders that we haven’t covered at length. That man is Matthew Tuttle, who first had the idea to start an ETF betting against Wood’s flagship fund when he saw the idea on Twitter last year, according to a new article from Yahoo.
The 53 year old thought to himself at the time: “Holy crap, that’s a great idea.”
In the following weeks, he filed for The Tuttle Capital Short Innovation ETF, ticker SARK, which would seek to bet against Wood’s fund using swaps contracts.
Since its inception, the fund is up almost 60% while ARKK has fallen more than 40%. In other words, Tuttle’s timing was incredible.
His fund has seen inflows of $298 million while a net $92 million has been pulled from ARKK over the same time period, Yahoo reported.
SARK’s total AUM is now almost $350 million, Tuttle said. At the same time, short interest in ARKK has grown nearly to record heights, approaching 10%.
Tuttle admitted to Yahoo that he probably wouldn’t have made the bet if ARKK had a low profile fund, before admitting that “the same fervent energy that lifted Wood to fame can be recaptured once markets change”.
He considers his ETF to be a better hedge for the market than just shorting the indexes because it is comprised of high valuation, low profitability names. Tuttle said: “I’m not negative on Cathie Wood. This is just a better hedge. If you’re negative on the market, what would you rather be short: Zoom, Teladoc and DocuSign, or Apple, Microsoft and Google?”
Tuttle sees a rotation from growth to value as a catalyst that he thinks will continue to make his ETF appealing.
“People are focusing on companies that are profitable today,” he said, describing how the Fed’s posturing to raise rates has changed the outlook for markets. “We’re going back to ‘earnings matter’.”