Cathie Wooden’s ARK Make investments plans the area exploration ETF ‘ARKX’ to faucet into the rising business
Ark Invest, which operates the largest actively managed exchange-traded fund, plans to add a “Space Exploration ETF” under the ticker ARKX, according to a securities filing filed Wednesday.
While the constituents of the ETF have not yet been disclosed, shares in space companies Virgin Galactic and Maxar Technologies each rose more than 8% after the close of trading.
Ark Invest had an extremely successful 2020: the flagship fund ARK Innovation achieved a return of more than 170% last year and the assets under management rose to USD 17 billion. The fund’s largest holding is the electric car maker Tesla, which accounts for more than 10% of its weighting.
Ark founder and CEO Cathie Wood told CNBC last month that investors “should step on the right side of change and stay on the right side of change as it has reached flight speed” after the coronavirus. Wood, a longtime Tesla bull, has set a target price of $ 7,000 per share that the company should hit by the end of 2024.
The Space Exploration ETF would focus on companies that “carry, enable, or benefit from technology-enabled products and / or services offered beyond the surface,” the file says.
The space industry grew steadily in 2020 despite delays due to the COVID-19 pandemic, and investments rebounded after a brief hiatus. Investors’ interest in space companies has continued to grow despite only a few listed companies.
In the coming year, however, more space companies are planning to enter the public markets. Both traditional IPOs and SPAC deals are expected in 2021.
Ark divided the industry into four categories: orbital aerospace, suborbital aerospace, assistive technologies, and aerospace beneficiaries.
“Space exploration is possible because of the convergence of a number of topics, and a space exploration company may not have any revenue now and there is no guarantee that that company will generate revenue from innovative technologies in the future,” said Ark.
Ark also outlined the four categories of companies that will be represented in the Space Exploration ETF:
“Orbital Aerospace Companies are companies that launch, manufacture, maintain, or operate platforms in orbital space, including satellites and launch vehicles. Suborbital Aerospace Companies are companies that launch, manufacture, maintain, or operate platforms in suborbital space, including drones, air taxis and electric aircraft . Enabling Technologies Firms are companies that develop the technologies necessary to run the aerospace industry with value added, including artificial intelligence, robotics, 3D printing, materials and energy storage. Aerospace beneficiaries are companies created by Aerospace can benefit from activities such as farming, internet access, global positioning system (GPS), construction and imaging. “
– CNBC’s Maggie Fitzgerald contributed to this report.
Subscribe to CNBC PRO for exclusive insights and analysis as well as live business day programs from around the world.