Want To Bet Against 'Woke' Companies? There's An ETF For That
Benzinga Sep. 6, 2023, Business Insider
While Florida Gov. Ron DeSantis and his fellow Republicans are leading the political charge against “woke” companies, Tuttle Capital Management’s CEO Matthew Tuttle is leading the monetary charge.
And, you may be able to invest in this come Nov. 20.
What Happened: Tuttle Capital filed a Form485APOS with the SEC on Tuesday, aiming to introduce the Tuttle Capital Inverse Socially Conscious ETF and the Tuttle Capital Self Defense Index ETF.
The Inverse Socially Conscious ETF will trade under the “GWGB” (Go Woke, Go Broke) symbol, while the Self Defense Index ETF will trade under the “GUNZ” symbol.
“This is [the] same line of thinking we took with SJIM,” Tuttle told Benzinga, “We saw an issue, in this case the media touting Jim like he was a guru and we took the other side.” SJIM is the Inverse Cramer Tracker ETF.
Tuttle Capital's GWGB doesn’t follow a conventional benchmark index, instead, the ETF seeks to identify companies based on their political orientation. In a nutshell, it plans to invest in companies with conservative or politically neutral perspectives and take short positions in those deemed "woke.”
The term "woke" in this context refers to companies that Tuttle believes are perceived as antagonistic towards conservative values. He’s also launched a newsletter called “The Woke Street Journal.”
At the heart of GWGB's selection criteria is the adherence to beliefs such as American Exceptionalism, individual liberty and free enterprise. The converse side involves identifying companies that engage in "woke" policies, potentially alienating their conservative stakeholders.
But that's not where the distinctive character of GWGB ends. The fund also screens for companies with high ESG (Environmental, Social, Governance) scores, believing that a heavy focus on ESG could distract from a company's core financial fundamentals.
The overarching philosophy is that "woke" policies and a high ESG focus might compromise shareholder value, and by shorting these companies, the ETF aims to capitalize on their anticipated underperformance.
The GUNZ ETF has a more straightforward objective, focusing on the self-defense industry. It targets companies involved in manufacturing, servicing and distributing personal and law enforcement defense equipment and services. Working on a replication strategy, GUNZ seeks to mimic the performance of the AJN Self-Defense U.S. Equity Index.
“We believe that politically neutral companies should outperform those that try to promote policies that they can't get done at the ballot box," Tuttle said to Benzinga.
This isn't Tuttle's first foray into unconventional ETFs, as he previously bet for and against TV personality Jim Cramer's stock picks. "Love him or hate him, Jim Cramer is a polarizing figure," Tuttle commented then.
While the Long Jim (LJIM) ETF is winding down — the last day of trade is set for Sept. 11 — the aim was to offer investors an opportunity to express their views on Cramer's recommendations.
Drawing a parallel, just as the Cramer-focused ETFs stirred the pot, the new ETFs — particularly GWGB — are expected to ignite some debate among investors.
The question is whether companies with "woke" policies indeed jeopardize their shareholder value or whether this is just another investment trend waiting to be tested in real market conditions. Seems like Tuttle is going to find out.
Original article here
Tuttle Capital Launches "Get Woke Go Broke" ETF
BY TYLER DURDEN SATURDAY, SEP 09, 2023 - ZEROHEDGE
Tuttle Capital Management, the same genius minds that brought us the Anti-ARKK Innovation Fund ETF and the Short Jim Cramer ETF, are now launching a "Get Woke, Go Broke" ETF that'll trade under the ticker GWGB.
It's called the Tuttle Capital Inverse Socially Conscious ETF and it plans to launch this year.
"The Advisor seeks to achieve the Fund’s investment objective by investing in U.S. listed mid and large cap equity securities that the Advisor deems to meet its politically conservative or politically neutral criteria and by taking short positions in U.S. listed equity securities that the Advisor has deemed to be following 'woke' policies," a filing with the SEC said this week.
"The Advisor believes that companies with 'woke' policies negatively impact their shareholders’ value by alienating conservative investors, customers, and employees, which impacts the companies’ market value; as a result, in addition to the equity investments described above, the Advisor intends to short 10 to 20 of these companies to capture some of the value of that financial impact," it adds.
The filing says: "The politically conservative criteria utilized by the Advisor to select securities for the Fund include the Advisor’s qualitative opinion of a company’s adherence to conservative values and beliefs such as 'American Exceptionalism' (the belief that the United States is either distinctive, unique, or exemplary compared to other nations), individual liberty (the liberty of those persons who are free from external restraint in the exercise of those rights that are considered to be outside the province of a government to control) and free enterprise (a belief that businesses should be free to operate for profit in a competitive system without interference by government)."
It continues: "The politically neutral criteria utilized by the Advisor to select securities for the Fund are that, in the Advisor’s opinion, a company that has no political activity at all and focuses purely on profits and sales."
"The Advisor defines 'woke' policies as policies of a company that the Advisor believes are perceived as hostile to conservative values, based on such company having a negative reputation among politically conservative investors, having business activities that alienate politically conservative customers and employees, and disproportionately supporting liberal causes. Such policies could be financial, part of corporate governance, marketing, business strategy, or public activism," it adds.
Tuttle Capital is also responsible for the newly launched Inverse Cramer Tracker ETF (ticker SJIM) and the Long Cramer Tracker ETF (LJIM) that allow investors to bet against (or with) the Mad Money host.
Its founder, Matthew Tuttle, also was first to have the idea for an ETF betting against Cathie Wood's ARKK fund before it plunged leading into 2023.
Watching ARKK's run up, 53 year old Tuttle thought to himself at the time: “Holy crap, that’s a great idea.”
In the following weeks, he filed for The Tuttle Capital Short Innovation ETF, ticker SARK, which would seek to bet against Wood's fund using swaps contracts.
Tuttle admitted to Yahoo that he probably wouldn't have made the bet if ARKK had a low profile fund, before admitting that "the same fervent energy that lifted Wood to fame can be recaptured once markets change".
Original article here
Photo courtesy of Tuttle Capital Management
Tuttle Times the Market Perfectly
The creator of the "Short the ARKK" fund shares his views on the economy, the stock market and SPACs.
Lawrence Carrel | May 12, 2022
Matthew Tuttle has fantastic timing.
Last November, the CEO of Tuttle Capital Management launched the Tuttle Capital Short Innovation ETF (SARK). Year to date, the fund has returned close to 100%, as the broader markets seem to be stuck in a prolonged sell off.
The fund is better known as "Short the ARKK." It is literally shorting the ARK Innovation ETF (ARKK) on a daily basis through swap exposure directly on ARKK. Swap contracts are derivatives similar to forward contracts.
Why choose to put ARKK in the crosshairs? Tuttle recognized a fund that got far out over its skies. It's run by Cathie Wood, the ETF Industry's appointed “it” portfolio manager. In 2020, at the height of the pandemic, ARKK invested in small technology stocks meant to be part of the disruptive wave of innovation that promised outsized returns for early investors. The fund rocketed 157%, according to Morningstar.
In an industry with few superstars, Cathie Wood stood out. Posting one of the best annual returns on Wall Street is enough to get people talking about you, but this was also a rare female portfolio manager, one who gives away her team’s research for free and speaks with a certainty about the coming waves of disruptive technology that give her a guru-like status among some investors.
She has many fans in the industry, but also many skeptics. Tuttle realized there was an audience for a portfolio betting against her fund. At the end of 2021, when SARK launched, the trend started to turn against ARKK.
Year-to-date, the tech-filled Nasdaq is down 28% and the S&P 500 Index has lost 18%. Meanwhile, ARKK has plunged nearly 60%, as of May 11. Over the past five years, an investor in the S&P 500 (62%) would have had a higher return than an investor in ARKK (41%) by some 20 percentage points.
Tuttle's firm now has $600 million in assets under management, with SARK alone holding $400 million. In comparison, ARKK holds $9.2 billion, according to Morningstar.
I sat down with Tuttle at the recent Exchange conference in Miami Beach, Fla. We discussed SARK, his views on the economy, the stock market and his other funds.
WealthManagement.com: Why is SARK the ETF of the moment?
Matthew Tuttle: The Federal Reserve is raising interest rates and will be for a while. Interest rates are kryptonite to the types of companies that ARKK is investing in, speculative, unprofitable technology. We saw what was going on with the Fed. We knew they were going to raise rates and that the market was overdue for a correction. While it's bad for Apple, Amazon and Microsoft, it's really bad for Zoom and (virtual-health company) Teledock. (Editor’s note: On April 28, Teledoc’s Teledoc's stock plunged 47% on a bad earnings report. It's one of ARKK's top holdings.)
If you're worried about the market, and quite frankly you should be, this is a good way to hedge your portfolio, because the overall trend is down, and that's a not good sign. I believe this market sucks and I would rather be short the market and own SARK.
Growth and speculative stocks keep getting killed. Then last week, they took everything out and just crushed it. Utilities and consumer defensive stocks had been hanging in. Now, they are not.
WM: Your website says the ETF's structure doesn't fully address the opportunities and risks in today's market. So what are those opportunities and risk?
MT: A few weeks ago, there were still pockets. You could buy utilities, consumer defense, energy, commodities and gold. But right now, there's nowhere to go, all of that stuff is getting hammered. And the traditional ETF hedges aren't great. You've got inverse S&P 500 and the inverse NASDAQ. I think we're in a bear market and that it's going to get worse. In a bear market they will do well, but at the end of the day, you're still in the best of the best stocks. Whereas with SARK, you're in the speculative stuff. And if this market continues to sink, the speculative stuff is going to get hurt more than Apple and Microsoft. How many innovative companies from 1999 are no longer with us? It's a lot.
WM: Do you think we're entering a recession or is this all interest-rate related?
MT: I look at what the market is telling me. And the market is telling me it thinks we're going in a recession. So, I'm not going to argue with that. The market is being extremely clear on the fact that it's worried about the consumer because consumer-discretionary stocks are getting savaged. They're worried about anything home related, which is interest-rate related certainly, but it's also consumer-related. So, I think we are entering a recession because the market is telling me that.
WM: Let's jump to another speculative market. Three of your ETFs track the market for SPACs (special purpose acquisition companies). SPACs are pools of capital that list on a stock exchange with the purpose of merging with a private company in order to bring it public without an initial public offering. The Short De-SPAC ETF (SOGU) shorts another Tuttle fund, the De-SPAC ETF (DSPC), which is a pure-play index fund of post-merger SPACs, such as electric-vehicle company Lucid Group. SOGU is up 41.4% year to date, according to Morningstar.
MT: There was a bubble in the SPAC market. Investors were looking at SPACs the same way they looked at meme stocks. Anytime a SPAC announced a merger, it popped. It was crazy. I think the SPAC market sentiment is awful and for a good reason. On the pre-merger side there are too many SPACS looking for deals and not enough deals. So, you're going to see some SPACs liquidate which means, they give shareholders back their money. It's not a bad thing, but from a PR standpoint, it's not a good look.
Another reason is you're going to see a lot of them desperate to make a deal and they will make crappy deals. They will buy companies that are just awful and from a PR standpoint that's not a good look, either. Deals came public at $10 and now they trade for $2, like Lordstown Motors. Eventually, you'll be left with a few guys who got the best deals and will dominate the market.
Original article here
EDITORS NOTE: A lot of US stocks are trading at very high valuations, but mainly the large FANG type stocks. Some smaller companies are better value. You will need to do your homework on this market. If there is a recession in the market, it’s not there yet.