The manager betting against Ark Invest defends his ETF after Cathie Wood slams it as 'ridiculous': 'It is un-American to not have choices in the marketplace'

• Ark Invest's Cathie Wood said the ETF that bets against her funds is "ridiculous" in an interview on Thursday.
• The creator of the Short Innovation ETF disagrees with Wood's assessment and said the ETF is just a tool for investors to express their views.
• "It is un-american to not have choices in the marketplace," Matthew Tuttle of Tuttle Capital told Insider.

In a wide-ranging interview with CNBC on Thursday, Ark Invest's Cathie Wood responded to the criticism she has received amid a year-long bear market in her investment funds.

Specifically, Wood responded to the launch of the Short Innovation ETF, an ETF created by Tuttle Capital Management that seeks to produce the inverse daily returns of Ark Invest's flagship Disruptive Innovation ETF.

Since its launch late last year, the SARK ETF has soared 55% while the ARKK ETF has declined by 42% over the same time period.

"They're [Tuttle Capital] shorting innovation and that seems to me, over time, that's not going to be a business if you ask me. But they're also not doing any research. They're simply shorting innovation. If they were doing research and could point us to reasons why what we [own] is not going to participate in the new world order, then we might have a conversation about it. But the idea of shorting innovation is, in America, ridiculous I think," Wood said.

But Tuttle Capital Management's CEO Matthew Tuttle sees no problem with offering an ETF that bets against Ark Invest's innovation strategy, telling Insider that it's just "a tool" for investors.

"SARK is a tool that investors can use to express a bearish view on the market, innovative companies, the current rising rate environment, or a [specific] portfolio manager if they wish. It is un-american to not have choices in the marketplace," Tuttle told Insider on Thursday.

Ironically, Cathie Wood made comments similar to Tuttle's when the SARK ETF was launched late last year, telling Bloomberg in an interview: "This is what makes a market, right? I never worry about anyone shorting the stocks underlying Ark or with this new ETF."

For now at least, the launch of the Short Innovation ETF has been great business for Tuttle Capital Management, as it's the most popular ETF of the six it offers.

The SARK ETF, which launched with about $5 million in assets in early November, now has $299 million in assets under management as of Wednesday's close. That's about six times larger than its next biggest ETF, the SPAC and New Issues ETF. With an annual expense ratio of 0.75%, the SARK ETF is on track to generate more than $2 million in annual revenue for Tuttle Capital.