(Bloomberg) -- One strategy has helped a company stand out in the $6.4 trillion US exchange-traded fund market -- piggybacking off of Cathie Wood. 

That’s the tactic helping to bolster up AXS Investments, the ETF issuer behind funds that bet both for and against Wood’s $9.4 billion ARK Innovation ETF (ticker ARKK). Since its launch in May, trading volume has steadily increased in the AXS 2X Innovation ETF (TARK), which doubles the performance of Wood’s flagship fund. Meanwhile, its Tuttle Capital Short Innovation ETF (SARK), which bets against ARKK, has ballooned in size to $395 million in nine months.

“It’s really the first time I’ve seen a firm be able to ride the wave of another ETF issuer,” Athanasios Psarofagis, ETF analyst at Bloomberg Intelligence, said. “In a way they help each other: AXS needs ARK, but ARK now benefits from more attention, and more trading building around their products.” 

The Federal Reserve’s rapid interest-rate hikes have dented highly-valued technology companies that make up most of ARKK’s holdings. As a result, ARKK has fallen over 50% year to date. But its decline hasn’t stopped investors from pouring $1.8 billion into the fund in 2022 -- underscoring the cult following Wood has maintained ever since her nearly 150% run in 2020. 

Wood’s popularity has sparked a global ecosystem of funds attempting to mimic ARK, with Bloomberg Intelligence tracking 24 exchange-traded products globally that are tied to the performance of an ARK strategy. 

Out of all of the ARK-focused funds, SARK, which tracks the inverse performance of ARKK using swaps contracts to achieve the opposite return of Wood’s fund for a single day, has gained the most. The fund’s price jumped about 53% this year. AXS, which also recently launched the first US single-stock ETFs, announced the purchase of the fund from Tuttle Capital Management in April. 

Meanwhile, AXS’s newer $36 million fund, TARK, which uses derivatives to track double the performance of ARKK, is fresh off its highest trading volume week since inception, clocking in more than $10 million. Its month-to-date volume surpassed the entire month of June.

Read more: Anti-Ark ETF Parent Adds Double-Leveraged Fund Mimicking Wood’s

AXS Chief Executive Officer Greg Bassuk credits the success of both ETFs to the fact that they were the first funds to allow ETF traders access to leveraged and inverse bets to the disruptive innovation theme.

“For traders who are bullish on the disruptive technology space, this became the only way to get leverage exposure,” he said. “We don’t see it as necessarily folks who are either fans of Wood or not fans of Wood.”

Stocks dropped Tuesday as earnings optimism waned and traders questioned the likelihood that the Fed’s monetary tightening will be able to keep the economy out of a deep recession. While the trading action has paused ARKK’s recent rally, the ETF is still up over 9% in July and its double-leveraged copycat TARK is up about 15%. 

SARK’s founder Matthew Tuttle said that the ETF is not about betting against Wood, but about making a bet against the high-flying technology stocks that he believed were ripe for a correction. 

“We definitely had a view on the market,” he said. “We wouldn’t have launched this if we didn’t think this has the potential to make investors a lot of money.” 

But Tuttle also admitted that “there’s always an element of luck in everything.”

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