(Bloomberg) -- The firm behind the anti-Ark ETF is launching a fund that doubles the performance of Cathie Wood’s flagship product -- just as her fund is seeing its worst-ever performance.
The AXS 2X Innovation exchange-traded fund (ticker TARK) uses derivatives to track double the performance of the $8.8 billion ARK Innovation ETF (ARKK). The launch comes weeks after AXS Investments LLC bought the $428 million Tuttle Capital Short Innovation ETF (SARK), which bets against the Ark fund.
ARKK has plunged about 49% so far in 2022, after last year’s 24% drop. The S&P 500 is down more than 13% this year while the Nasdaq 100 has plummeted 21%.
Wood’s hot hand during 2020’s technology-fueled stock rally earned her somewhat of a cult following as her relatively concentrated portfolio -- ARKK holds just 37 stocks -- of so-called disruptors soared nearly 150%. Companies such as Tesla (NASDAQ:TSLA) Inc. led the surge. The performance of the fund has deteriorated as the Federal Reserve tightens monetary policy and Treasury yields spike, dragging down richly valued, speculative technology shares.
While both TARK and SARK are directly tied to ARKK -- one of the highest-fliers of the pandemic era -- the ETFs shouldn’t be viewed as a comment on Wood, but as a way to wager on “beaten down” tech stocks from both sides of the trade, according to AXS chief executive officer Greg Bassuk.
“We definitely don’t see this as a Cathie Wood or an Ark ETF,” Bassuk said in an interview. “The combination of our TARK launch, combined with the acquisition of the SARK fund, we view it really as a toolkit for investors for disruptive technologies, having nothing to do with Ark or Cathie Wood per se.”
While still a small player in the $6.6 trillion ETF arena, AXS has made an aggressive entrance. That includes a takeover of Tuttle Capital’s six funds, as well as the $106 million AXS Change Finance ESG ETF (CHGX) and the $10 million AAF First Priority CLO Bond ETF (AAA).
In addition to acquiring funds, the firm also launched the $67 million AXS Astoria Inflation Sensitive ETF (PPI) in late December. AXS has also applied with the Securities and Exchange Commission for 18 single-stock products, as well as the AXS Short Bitcoin Strategy ETF and a Bitcoin futures fund.
TARK will launch on Monday alongside the AXS Short China Internet ETF (SWEB), which tracks the inverse performance of the $5.9 billion KraneShares CSI China Internet ETF (KWEB) that has dropped more than 21% so far this year. TARK and SWEB will charge management fees of 95 basis points and 75 basis points, respectively, Bassuk said.
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