Close Close
ThinkAdvisor

Portfolio > Asset Managers

Cathie Wood’s Ark to Launch Space Exploration ETF Tuesday

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • The actively managed ETF will list on the Cboe and has a 0.75% expense ratio.
  • Its top 10 holdings account for about 50% of assets; its second largest holding is Ark's 3D Printing ETF (PRNT).
  • Most of Ark's funds are underperforming the S&P 500 this year after a stellar 2020.

Ark Investment Management, the asset manager led by Cathie Wood whose ETFs specialize in disruptive technologies and more than doubled in price last year, is launching the ARK Space Exploration & Innovation ETF (ARKX) Tuesday on the Cboe.

The space-themed ARKX is an actively-managed ETF that under normal circumstances will invest at least 80% of its assets in domestic and foreign companies involved in products and/or services related to space exploration.

They include:

  • companies that launch, make, service or operate platforms in orbital space (like satellites and launch vehicles) and in suborbital space (including drones and air taxis)
  •  firms that develop technologies such as artificial intelligence, robotics and 3D printing that  are used by companies engaged in space exploration
  • companies that benefit from aerospace activities, such as agriculture, internet access, global positioning system (GPS), construction, imaging, drones, air taxis and electric aviation vehicles.

ARKX’s Top Holdings

The ETF, expected since Ark’s January SEC filing, holds about 40 stocks and has an expense ratio of 0.75%, as do most actively managed Ark ETFs. Its top 10 holdings account for about 50% of its assets, and its second largest holding, according to Ark, Is the firm’s own 3D Printing ETF (PRNT) which had a weighting of just over 6% as of Friday. Its heaviest exposure is in Trimble (TRMB), a company that provides advanced location-based software solutions that integrate its expertise in GPS, laser and technologies with wireless communications, application software and other services.

Dave Nadig, director of research and chief investment officer of ETF Trends and ETF Database, said, the new Ark ETF “makes a ton of sense, and is similar to how Ark approached financials.  They waited until they believed there were enough public plays to launch a dedicated fund, then they launched ARKF. It’s a completely predictable … and telegraphed … strategy for them.”

ARKF is the firm’s fintech innovation ETF.

Year to date, four of Ark Investment Management’s five actively traded ETFs have underperformed the S&P 500 and the Nasdaq. (Its ARKQ Autonomous Technology & Robotics ETF is the exception.)

That doesn’t bother Nadig, however. He  notes that Ark is “genuinely working in five-year blocks. It’s mathematically certain that their high-beta approach will have strong periods of out- and underperformance. Their median fund is still up 146% over the trailing 12 months and up 42% over five years, annualized.”

(Photo: NASA)