The ARK Space ETF is not a large surprise. ARK invests in innovation and it has been getting a large number of its picks right. For instance, it bet heavily on Tesla, and that has quite certainly not disappointed. Tesla has been on a tear since the pandemic announcement in March and has been roaring even after a stock split.
What is the next frontier? The ARK Space ETF indicates that it is going to be space activities among other segments of growth.
Indeed, we are seeing more value with SpaceX, Maxar, and other firms like Virgin Galactic, among a few others, such as Momentus, that have recently joined the public markets.
The ARK Space ETF Objective
The Ark Fund will be actively managed, an ETF, that will allocate over 80% of funds to space companies in the United States and elsewhere. The overall theme will revolve around Space Exploration and innovation, according to recent filings with the Securities and Exchange Commission.
You should know that space exploration and space activities are defined as companies that are involved in the overall sector. That means that they could be critical players or supporting players in the space movement. Of course, it is essential to realize that the firm will focus on entities that will rely on disruptive innovation to make significant progress.
This significant progress will have transform the industry landscape and be valuable overall. The firm will use similar practices to identify and choose companies that fall into its specific criteria. They hope to spot these trends early on and earn significant upside from these early sightings.
ARK notes within its ARK Space ETF filing that it will categorize firms into several segments. These segments include:
- Orbital Aerospace Companies
- Suborbital Aerospace Companies
- Enabling Technologies Companies
- Aerospace Beneficiary Companies
The first category is about those firms that are involved in the orbital sector from satellites to launch systems. Suborbital firms are those that deal with drones, air taxis and other vehicles that hover in the suborbital realm.
Enabling technology firms are those that contribute technologies like artificial intelligence, robotics, and even storage for the aerospace industry.
Finally, the last category that the ARK Space ETF will invest in is companies that will have more efficiency and gains due to space exploration and innovation. This last category involves firms that may range from Uber to other firms that rely on satellites and space infrastructure for significant decision-making activities.
Key Details and Competition for the ARK Space ETF
The ARK Space ETF will be known as ARKX. It will be under active management, a similar approach to other funds. Finally, it will also come with fee. The fee will cost around 0.75% on an annual basis.
The firm will choose companies that seem to offer the best returns and that it has significant conviction on for the near term. It will seek to learn about economics, costs, growth factors, and market siz, in addition to general price levels while looking at general fundamental and other data for companies. It does account for ESG.
But remember that ESG would be, a sort of, icing on top, it wouldn’t exclude companies from being a part of the portfolio if it meets other critical criteria factors. This is an approach that many investors favor as it looks at fundamentals and optimizes for strategic growth and capital appreciation while integrating ESG as a part of the process.
The ETF will contend with Procure Space ETF (NYSE Arca: UFO) and SPDR Kensho Final Frontiers ETF (ROKT).
That is the key details on the ARK Space ETF, stay tuned for further details on space news and other factors relating to the Ark Space ETF as it occurs.