Cathie Wood says she's never worried about short bets against Ark's holdings and welcomes skepticism in response to ETF betting against her
- The launch of Tuttle Capital's Short Innovation ETF is of no concern to Ark Invest's Cathie Wood.
- Wood told Bloomberg she doesn't worry about anyone shorting Ark's underlying holdings.
- "This is what makes a market, right?" Wood said.
This week's launch of the Tuttle Capital Short Innovation ETF isn't keeping Cathie Wood up at night, according to an interview with Bloomberg.
The ETF, which sports the ticker "SARK" as a reference to "Short ARK," seeks to profit from a decline in a portfolio of companies involved in disruptive industries such as electric vehicles, next-gen internet, genomics and fintech.
"This is what makes a market, right? I never worry about anyone shorting the stocks underlying Ark or with this new ETF," Wood told Bloomberg at the Dynasty Financial Partners' 2021 Investment Forum.
Shorting stocks held by Ark Invest has barely been a winning trade in 2021, with the ARK Disruptive Innovation ETF down just 5% year-to-date. But since its late 2014 inception, Ark's flagship ETF has returned 529%, more than triple the S&P 500's return of 162% over the same time period.
Part of the upside in Ark's investment strategies has been driven by short-sellers covering there losing positions and buying the stock back. Tesla, which is Ark Invest's largest holding and has driven a bulk of the investment firm's returns over the past two years, has seen its short interest fall to less than 3% today from about 25% in 2019.
And that's why Wood is comfortable with investors betting against her strategies.
"If we are right they are going to have to cover their shorts and that will be another source of demand for the stocks in the future," Wood said.
Additionally, the skepticism towards Ark's disruptive growth investment strategy is welcomed by Wood because it limits the euphoria often seen at market tops like during the 2000 dot-com bubble.
"I like skepticism, and I feel much better when there's a good give and take," Wood said.