It appears that this week is a big week for space launches.
Ark Invest’s much-awaited space-exploration-themed ETF, ARKX, officially blasted off for trading on Tuesday.
It is the firm’s eighth ETF (exchange-traded fund) and its first debut in two years. The public caught wind of the news of the launch in January when Ark filed for the new ETF, sending space stocks like Virgin Galactic (SPCE) and Maxar Technologies (MAXR) soaring.
The goal of the space-oriented ETF is to capitalize on the booming space industry and will give investors access to a total of nearly 40 holdings. The fund will invest 80% of its assets in space exploration and innovation, defined as “leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth,” according to the fund’s website.
The woman behind it all is star stock picker and founder of Ark Investment Management, Cathie Wood. The face behind Ark’s other wildly successful ETFs has made a name for herself for finding disruptive tech stocks like Tesla and was named best stock picker by Bloomberg in 2020.
In an interview with EFT.com, Wood explains that although space travel might be top of mind when people think of investing in the industry, ARKX instead focuses on what she calls the two biggest growth opportunities—connectivity and hypersonic flight.
“A lot of people think about the opportunity as us flying to the moon. Within my lifetime, I hope that happens. And many people think about space tourism. But we think the first and most remunerative opportunities are going to be mobile connectivity and hypersonic flight in the next five years,” says Wood.
Some of ARKX’s notable holdings include geospatial, laser, and optical technologies company Trimble (TRMB), Japan manufacturing name Komatsu (6301.JT), and defense and aerospace companies like Kratos Defense & Security Solutions (KTOS) and L3Harris Technologies (LHX).
The ETF won’t just provide investment opportunities for strictly space companies, though. The fund also gives investors positions in tech giants Alphabet (GOOG), Netflix (NFLX), Amazon.com (AMZN), and Chinese e-commerce giant JD.com (JD), as well as Ark’s 3D printing ETF (PRNT).
It’s always exciting to hear about new innovative ETFs on the market (even Barstool Sport’s Dave Portnoy has just launched one), however, it seems ARKX’s debut has been off to a slightly shaky start. Shares fell approximately 1% on its first day of trading—closing at $20.30 a share.
That said, it’s only day two of the ETF’s launch, and time will tell if it really takes off.