CNBC’s Jim Cramer on Thursday highlighted an exchange-traded fund that’s seeking to benefit from the weakness in formerly high-flying growth stocks that have struggled as the Federal Reserve adopts a more hawkish posture.
The “Mad Money” host said many of those out-of-favor stocks are found in Cathie Wood’s ARK Innovation ETF, which soared in 2020 but struggled last year and so far in 2022. The ETF — with Tesla, Teladoc and Zoom Video as its three largest positions — is down nearly 30% already year to date.
“If you think it’s headed further down, the cynical geniuses who prey on investors in the form of ETFs have come up with a way to bet against Cathie Wood herself. It’s called the Tuttle Capital Short Innovation ETF,” Cramer said. “Its symbol is SARK, and it literally shorts whatever Cathie goes long.”
The Tuttle Capital Short Innovation ETF, which listed on the Nasdaq on Nov. 9, is up 38.23% year to date. For comparison, the technology-focused Nasdaq Composite is down 14.65%.
Cramer said in his view, investors should continue to build a core portfolio that consists of profitable, high-quality companies that sell tangible goods and services to customers. It’s an investment mantra he’s been touting since late last year while stressing the need to avoid money-losing companies.
Investors who want to further position their portfolios to benefit from the downturn in growth stocks could turn to the SARK ETF, Cramer acknowledged.
“You can buy some SARK and hedge your position. If you’re worried this correction will continue, then stay the course in the stocks that are holding up and then use this thing to bet against the growth stocks that are in the center of the blast radius,” Cramer said.
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