Thematic ETFs Aim for Gains in Areas Like Crypto, K-Pop, and Psychedelics. Just Say No.

Electric vehicles, crypto, and genomics excite many investors with their potential for innovation and big returns. But betting against those sectors with an exchange-traded fund has been the winning strategy this year. Stocks like

Tesla

Coinbase Global, and

Crispr Therapeutics

are all down sharply, fueling gains for the

AXS Short Innovation Daily

ETF, up 61%.

AXS didn’t pick those stocks out of a hat. They’re held by

ARK Innovation

(ticker: ARKK), the big thematic tech ETF run by Cathie Wood. The AXS Short Innovation ETF (SARK) is a mirror image of ARK Innovation—shorting the very stocks that Wood favors. This year, ARKK’s 62% losses have been SARK’s gains.