Tuttle Capital Short Innovation ETF (SARK)

Overview

The Tuttle Capital Short Innovation ETF (SARK) is an actively managed ETF that seeks to achieve the inverse (-1x) of the daily performance of the ARK Innovation ETF (ARKK). It aims to profit from a decline in the value of ARKK by shorting the fund.

Reputation and Reliability

Tuttle Capital Management is a smaller, more specialized ETF issuer known for its leveraged and inverse products. They have a shorter track record compared to larger ETF providers.

Management Expertise

The management team has experience in developing and managing specialized ETFs, particularly those focused on tactical strategies.

Goal

To provide investment results that are approximately the inverse (-1x) of the daily performance of the ARK Innovation ETF (ARKK).

Investment Approach and Strategy

Strategy: The ETF employs a short selling strategy, using derivatives such as swap agreements, futures contracts and options to achieve its inverse objective. It does not directly short the underlying holdings of ARKK.

Composition The ETF's assets primarily consist of financial instruments designed to provide the inverse return of ARKK. The specific composition changes daily to maintain the -1x leverage.

Market Share: SARK's market share within the inverse innovation ETF segment is significant, though the segment itself is relatively niche.

Total Net Assets (AUM): 84830000

Key Competitors

• PSQ
• BITI

Competitive Landscape

SARK faces competition from other inverse ETFs and funds that offer similar exposure to innovation or technology sectors. Its primary advantage is its direct focus on shorting ARKK. Disadvantages include its reliance on the performance of ARKK, and the potential for tracking error and compounding effects due to its daily reset.

Historical Performance: Past performance data should be viewed with caution due to the leveraged and inverse nature of the fund.

Benchmark Comparison: The ETF's performance is benchmarked against the inverse of ARKK's daily performance. Deviations from this benchmark can occur due to fees, expenses, and the effects of compounding.

Expense Ratio: 0.95

Average Trading Volume

SARK exhibits moderate liquidity, usually trading several million shares daily.

Bid-Ask Spread

The bid-ask spread for SARK is typically narrow but can widen during periods of high volatility or low trading volume.

Market Environment Factors

SARK's performance is significantly affected by market sentiment towards innovation stocks, interest rates, and broader macroeconomic conditions. Declining markets or a shift away from high-growth technology generally favor SARK.

Growth Trajectory

SARK's growth is tied to the perceived overvaluation of ARKK's holdings and the broader innovation sector. Changes in ARKK's investment strategy or holdings could impact SARK's performance.

Competitive Edge

SARK's primary advantage is its direct and straightforward approach to shorting ARKK, providing a targeted way for investors to express a bearish view on innovation stocks. It offers a single-ticker solution for those seeking to hedge against or profit from a decline in the ARKK ETF. This focused strategy, coupled with active management, allows for tactical adjustments to maintain the desired inverse exposure. The ETFu2019s concentrated approach on ARKK differentiates it from broader market inverse ETFs. Tuttle Capital's early entry into this specific inverse strategy has afforded it a degree of brand recognition.

Volatility

SARK is a highly volatile ETF due to its leveraged and inverse nature. Daily resets can lead to compounding effects, resulting in returns that differ significantly from the inverse of ARKK's cumulative performance over longer periods.

Market Risk

SARK is exposed to the risks associated with short selling, including unlimited potential losses. It is also subject to the specific risks of the innovation sector, such as technological disruption and regulatory changes.

Ideal Investor Profile

SARK is suited for sophisticated investors with a high-risk tolerance who have a bearish outlook on ARKK and the innovation sector. It is generally used as a short-term hedging tool or for tactical trading purposes.

Market Risk

SARK is not suitable for long-term investors. It is best used by active traders who understand the risks associated with leveraged and inverse ETFs.

The Tuttle Capital Short Innovation ETF (SARK) is an actively managed ETF designed to deliver the inverse of the daily performance of the ARK Innovation ETF (ARKK). It utilizes a short selling strategy through financial derivatives. Due to its leveraged and inverse nature, it is a high-risk, high-reward instrument best suited for sophisticated traders with a bearish outlook on innovation stocks. Investors should carefully consider the risks associated with daily resets and compounding effects. SARK is not intended for long-term buy-and-hold strategies.

Data Sources:

• Tuttle Capital Management Website
• ETF.com
• Bloomberg
• Yahoo Finance

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions. Investment involves risk including the possible loss of principal.