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Ark Invest's Cathie Wood is not concerned by the launch of Tuttle Capital’s Short Innovation ETF.
Wood stated to Bloomberg that she isn't concerned about Ark's underlying holdings being shorted.
"This is what makes markets, right?" Wood stated.
According to a Bloomberg interview, Cathie Wood is not worried about the launch of the Tuttle Capital Short Innovation ETF this week.
The ETF uses the ticker "SARK", which refers to "Short ARK," to track the declines in a portfolio that includes companies in disruptive industries like electric cars, next-gen web, genomics, and fintech.
This is what makes a market. Wood stated that he doesn't worry about anyone selling the Ark stocks or the new ETF.
Ark Invest's stock shorting has not been a winning trade. The ARK Disruptive Innovation ETF is down only 5% so far in 2021. Ark's flagship ETF, which was launched in late 2014, has been able to return 529% since its inception. This is more than the S&P 500's 162% return over the same period.
Ark's investment strategies have seen upside due to short-sellers who cover their losing positions by buying back stock. Ark Invest's largest holding, Tesla, has contributed a large portion of Ark Invest's returns over two years. Its short interest has fallen to less than 3% from 25% in 2019.
Wood is comfortable with investors who bet against her strategies.
Wood stated that if they are correct, they will have to cover their shortfalls. This will provide another source of demand to the stocks in future.
Wood welcomes Ark's skeptical approach to its disruptive growth investment strategy because it reduces the euphoria seen at the tops of the market, such as during the 2000 dot com bubble.
Wood stated, "I like skepticism and it makes me feel better when there is a good exchange and take."